HOUSTON (9/15/09)--Preliminary hearings are underway in the class action suit brought by financial institutions against Heartland Payment Systems, the payments processor that suffered the largest data breach in history last year. More than 30 financial institutions--including several credit unions--from 22 states are involved in the lawsuit, which is different than the class action lawsuit brought by consumers against the Princeton, N.J.-based processor. The breach compromised roughly 130 million credit and debit cards. In June, a Multidistrict Litigation (MDL) panel decided the suits would be heard in Houston (News NowJune 15). Richard Coffman, a Beaumont, Texas-based attorney representing the Pennsylvania State Employees CU (PSECU), Harrisburg, Pa., and Lone Summit Bank, told Bank Info Security (Sept. 9) that a case management conference in August was a "very good one" for the financial institutions. Judge Lee H. Rosenthal of Houston's Southern District Court of Texas held a preliminary case management hearing Aug. 24 and named three co-lead counsel: Mike Cadell of Houston; Joe Sauder of Haverford, Pa.; and Coffman. Also at issue in the hearing was discovery--what Heartland will be required to produce now and what can be deferred to next spring after its anticipated motion to dismiss is argued. Heartland has filed a motion for a stay on all discovery until the court rules on the motion to dismiss. The financial institutions are required to file their amended consolidated complaint by Sept. 23, with Heartland required to file its motion to dismiss by Oct. 23. Briefing on that motion is expected by mid-December. If the case is argued in early January, Coffman said a ruling could be issued shortly after that, BankInfoSecurity reported. Coffman estimated that the number of financial institutions impacted by the data breach is much higher than the 670 institutions listed on BankInfoSecurity's website. He said the list reflects about 20% of institutions that had to replace compromised credit and debit cards and absorb unauthorized charges on their cardholders' accounts. That would bring the total number of institutions affected to 3,350. A third set of cases, involving securities issues, was filed in New Jersey and likely will be consolidated into one court later this fall. The MDL panel will decide those cases in October. Heartland hopes to consolidate them and hear them in Houston as well, Coffman told the publication.