Category Archives: Lawsuit

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Despite Recent High-Profile Dismissals, Wendy’s Shareholders Try Again with Cybersecurity-Related Derivative Lawsuit

The resilient plaintiff’s bar is not backing down from their quest to hold directors and officers personally liable for corporate misconduct that leads to cybersecurity breaches. Taking guidance from the failures which resulted in a string of dismissals of high-profile cybersecurity-related shareholder derivative lawsuits, a shareholder of the fast food-chain The Wendy’s Company is taking another shot to impose liability on corporate leadership for failing to take precautions against cyber-attacks. To be clear, these derivative cases are trying to hold the directors and officers liable…

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Plaintiffs’ Monitoring Activity to Mitigate Increased Risk of Identity Theft Sufficient for Article III Standing in the Sixth Circuit

The Sixth Circuit, in a 2-1 majority decision, has reinstated a class action lawsuit against Nationwide Mutual Insurance Company, finding that the plaintiffs’ alleged “imminent, immediate and continuing increased risk” of identify fraud after hackers accessed personal data on Nationwide’s servers constituted a “cognizable injury” under Article III. The court’s unpublished decision cited a range of alleged damages from the plaintiffs’ complaint including the time and expense of monitoring their own credit, as well as a study “purporting to show that in 2011 recipients of…

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lawsuit

Something to Keep an Eye On: Insurers and Insureds to Duke it Out in Data Breach Coverage Suit

A new Indiana coverage litigation regarding a CGL policy (and umbrella policy) may provide more guidance about how courts will approach data breach coverage under traditional insurance products. In National Fire Insurance Company of Hartford v. Medical Informatics Engineering, Inc. et al. (N.D. Ind., No. 16-cv-152), two CNA companies initiated a declaratory judgment action seeking a ruling they do not have the duty to defend or indemnify Medical Informatics Engineering, Inc. or NoMoreClipboard, LLC (collectively Medical Informatics) in relation to lawsuits filed against Medical Informatics. …

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Recent Class Action Settlements By Target & Adobe

Adobe’s impending settlement in a class action comes just a month after Target settled claims for $10 million.  Although confirmatory discovery is ongoing according to Law360, Adobe and the named class members are expected to present their settlement proposal to District Judge Lucy Koh by the end of May.  Last year, both Adobe and Target lost motions to dismiss that challenged the plaintiffs’ Article III standing based on the U.S. Supreme Court’s 2012 decision in Clapper v. Amnesty International USA.  This may have been…

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Target to Change Security Policies and Pay $10 Million to Settle Data Breach Lawsuit

U.S. District Court Judge Paul Magnuson has indicated that he will grant preliminary approval of a 97-page settlement agreement between Target and class-action plaintiffs.  Under the settlement, Target will pay $10 million to compensate injured customers, with court documents suggesting as much as $10,000 for a victim. In total, 42 million shoppers had their credit or debit information stolen, and 61 million had personal data stolen from November 27 through December 18, 2013. The settlement also requires Target to change its security policies within 10…

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Hackers Charged with Stealing 1 Billion E-mail Addresses

The U.S. Department of Justice has unsealed indictments against three hackers for having broken into eight email service providers (ESPs), stealing 1 billion email addresses and names, and receiving $2,000,000 for the sale of products to those email addresses through a “spam” sales scheme. According to the indictments filed with the U.S. District Court for the Northern District of Georgia, Canadian David-Manuel Santos Da Silva and Viet Quoc Nguyen and Giang Hoang Vu from Vietnam used an email phishing scheme beginning in 2009 to gain…

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Third Circuit Reviews FTC’s Authority To Enforce An “Unreasonable Failure” To Protect Against A Cyber Attack

Today, the Third Circuit heard oral argument in a case that may have a profound impact on the Federal Trade Commission’s enforcement authority over corporate cybersecurity.  The question presented to the Court of Appeals is whether the FTC can pursue an enforcement action against a company under Section 5 of the FTC Act if the FTC believes that a cyber-hack occurred due to the company’s “unreasonable failure” to protect consumer data. The FTC alleges that Wyndham Worldwide did not “employ reasonable and appropriate measures to…

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Cyber-Attack Class Actions Are On The Rise

After a barrage of media coverage over the release of The Interview, Sony Pictures now finds itself in federal court defending against seven class action lawsuits filed less than a month after the North Korean government hacked its computer system.  Sony became aware of this “unprecedented” attack, in which it reportedly lost over 100 terabytes of data, on the morning of November 24th.  The first class action complaint, Corona v. Sony Pictures Entm’t, Inc., was filed on December 15, 2014 —…

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Can Companies Pre-Emptively Avoid Class Action Suits from Massive Data Breaches? (A Blog Series)

There’s a constant flow of news about massive data breaches nowadays.  So much so that the question for companies with large amounts of personal data storage is no longer “if” it can happen but “when” it will happen.  In this series, we’re going to discuss one method that larger companies are using to significantly reduce the risk exposure to massive data breaches: click-wrap terms of use that require users to waive participation in class actions and instead only pursue claims by way of arbitration or…

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Lawsuits Follow College’s Untimely Notifications – Can’t Blame the Dog…

Last year, the Maricopa County Community College District suffered a data breach in April, but waited until November before advising former students and employees that their academic and/or personal data may have been compromised.  Approximately 2.4 million people were impacted by this breach, or roughly the population of Pittsburgh, Pennsylvania.  Among the data that may have been breached were social security numbers, dates of birth, and bank account numbers. Recently, a current student of Phoenix College sued the College District in Maricopa County Court, making…

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