http://www.eweek.com/article2/0,1895,2192056,00.asp 

By Evan Schuman
October 4, 2007 

A U.S. District Court judge says the idea puts too much of the burden on 
the consumers.

When U.S. District Court Judge William G. Young told lawyers Sept. 27 
that he had serious concerns about the proposed TJX settlement, he also 
took issue with the part that would allow for consumers to turn the 
vouchers into cash by selling them.

In a courtroom exchange, TJX attorney Harvey J. Wolkoff argued that 
there is an easy way for a consumer to turn the vouchers into cash.

"These vouchers are fully transferable, so that someone can take a $30 
voucher and sell it on eBayI've never done it myselfand get $25," 
Wolkoff said.

Replied Young: "Too hard for me, Mr. Wolkoff. Too hard for me. These are 
consumers. People know how to cash checks. Saying, 'Go to eBay and 
negotiate it' won't cut it."

As was already reported, the judge told the lawyers that he wanted to 
know about the true costs of the vouchers to TJX. But Young elaborated 
on his explanation.

"I assume that this voucher has a value, a genuine value. That is, if 
you come and you give your $30 voucher to TJX, they'll take $30 off 
something they have on sale and if it's on sale, you can get another $30 
off and you walk out with it," the judge said. "But that's not a $30 
cost to TJX because they're selling things at a profit, as is their 
perfect right."

Regardless of the cost, Young was clear that he wasn't happy with the 
vouchers. "I'm very troubled by the vouchers, even if they are legal. I 
really don't like the vouchers the way they stand now," he said. "One 
imagines that there are a number of people out there who have been 
discommoded and, however TJX would wish it, they're not too happy with 
TJX."

To make sure that he had the plaintiff attorneys' attention, Young 
hinted that he wanted to tie the true value of the vouchers to legal 
fees he was prepared to approve. The current settlement has set aside 
about $6.5 million for the fees for plaintiff attorneys.

"I will approve a [lawyers' fee] settlement that is commensurate and 
does not exceed an appropriate proportion of the actual money that is 
either transferred to consumers, actually transferred to consumers, or 
the value of the cost of insurance, insurance which is transferred to 
consumers," Young said. "But I'm not just awarding this and not knowing 
what consumers in terms of actual money have gotten out of this."

Assuming that Young's position will be similar to other jurists 
overseeing similar matters, retailers might want to take notice of this 
comment. He wants every customer whose data was breached to be 
individually contacted about the settlement.

"While I'm perfectly fine with having ads in consumer magazines and the 
like, I had thought that TJX knows exactly which cards have been 
compromised and has information as to the consumer whose name is on that 
card," Young said. "I want those consumers, every single one of them, I 
want them to be mailed the notices having to do with the settlement."

Another detail that emerged from the hearing was that Young concluded 
that he doesn't have the authority to approve any deal of this kind in 
total because some of the consumers suing TJX are based in Canada. "The 
way you have resolved this is to seek a really greater than a nationwide 
class, though what I decide could only bind a nationwide class. The 
courts of Canada will have to decide whatever they decide," he said.

Young did have an optimistic comment. He interpreted the lack of 
monetary consumer damages as an indication that the U.S. retail card 
system is working well.

"When I look at this settlement agreement -- and I have reviewed it 
carefully -- one of the institutional things that I'm struck with is how 
well the credit card system works in the United States. That is to say 
from the consumer's point of view, I'm not in any way diminishing the 
discomfort and inconvenience and uncertainty that has been visited, 
apparently, on lots of consumers, but no one has lost big money here 
because the banks pick up the actual damages. And that's interesting and 
I think informative."


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