Saks Fifth Avenue in Manhattan. Photo: Shutterstock

The second of a pair of class action lawsuits over data breaches earlier this year that compromised financial information of Saks & Co. customers has made its way from the Central District of California to federal court in Manhattan.

News of the security breach impacting Saks and other retail brands owned by Hudson’s Bay Co. became public in April. According to the complaint, a well-known international hacking group was able to steal and release the information for over 5 million debit and credit cards. The breach, according to reports, affected the point-of-sale systems at a number of Saks-brand stores, and lasted from around the beginning of July 2017 through March 2018.

In the suit, Saks is accused of failing to secure and safeguard customers’ credit and debit card information collected from its Saks OFF 5TH “premium outlet” stores, while also failing to alert customers in an appropriate amount of time to the data breach. The hack wasn’t the only damage done to customers. The complaint notes that in March, Hudson’s Bay exposed tens of thousands of Saks customers’ personal information online, inadvertently.

Rudolph v. Saks & Co. was initially filed in California federal court in June. By August, communications between Saks’ legal team, led by Morgan, Lewis & Bockius partner Joseph Duffy, and the plaintiff’s counsel, Faruqi & Faruqi partner Benjamin Heikali, were discussing a possible venue change.

Saks and its attorneys wanted the case moved to the Southern District of New York, where Saks is headquartered, as is the team responsible for investigating and responding to the data breach. The plaintiff was resistant to the idea, according to a letter filed by Morgan Lewis associate Nicolette Young with U.S. District Judge John Walter of the Central District of California. Saks OFF 5TH stores were numerous in California, with nearly two dozen around the state, while the company’s point-of-sale system isn’t located in New York. Moreover, the plaintiff noted that other similar cases had been voluntarily dismissed in Manhattan federal court.

A late September hearing was scheduled on the matter, with both parties filing motions on the transfer, but on Sept. 12 the parties filed a joint stipulation that the plaintiff was withdrawing her motion opposed to the venue change. The parties agreed to have the matter moved to the Southern District of New York. Walter approved the transfer the following day.

The case has now been assigned to U.S. District Judge Kevin Castel of the Southern District of New York, but another case also recently joined the docket in Manhattan, Mekerdijian v. Saks Fifth Avenue, which was transferred in August. Both cases appear related to the Tafet v. Hudson’s Bay case, previously before Judge Katherine Forrest, that was voluntarily dismissed in August.

Sak’s counsel Duffy did not respond to a request for comment. The counsel for the plaintiff in the most recently transferred case, Heikali, also did not respond to a request.


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