Report: Data Breaches Will Be the Next Trend in Class Action Litigation
The next wave of class action lawsuits will be the result of massive data breaches, according to the eighth annual Carlton Fields Class Action Survey, which is based on interviews with general counsel or senior legal officers at 395 Fortune 1000 companies in the U.S.
April 16, 2019 at 05:44 PM
3 minute read
The next wave of class action lawsuits will be the result of massive data breaches, according to the eighth annual Carlton Fields Class Action Survey released Tuesday.
The survey is based on interviews with general counsel or senior legal officers at 395 Fortune 1000 companies in the U.S.
In 2017, 28.9 percent of corporate counsel said the next wave of class action suits would come from data privacy and security. That number nearly doubled in 2018 with 54 percent of respondents believing that the next wave of class action suits will come from data privacy and security issues.
The report also said in-house lawyers are more concerned with the California Consumer Privacy Act, or CCPA, which takes effect in 2020, than they are of the European Union's General Data Protection Regulation, or GDPR.
Kavon Adli, the founder of The Internet Law Group in Beverly Hills, California, said, however, companies should be as, if not more, concerned with the GDPR.
“I think the risk of a class action is more limited in the case of the CCPA,” Adli said.
He explained the data security is a limited area of the CCPA that provides for a right of action. Whereas the GDPR provides for a private right of action for all of its provisions.
“The CCPA is still sort of in flux. There have been some legislative processes and there may still be more before it goes into effect,” Adli said. “At the current time it is far more limited than the GDPR.”
Julianna McCabe, the director of the National Class Action Survey and a shareholder at Carlton Fields, said the state laws like the CCPA and Illinois' Biometric Information Privacy Act make it easier to file class action suits.
“When the legislators in those states pass laws that allow consumers to bring private rights of action regarding these data issues companies are rightly concerned,” McCabe said. “California in particular is a place where class actions are filed more than in any other state in the nation. California is an issue; Illinois is an issue, and other states are starting to copy those laws that are probably going to get passed in the next three to five years.”
Edward McAndrew, a partner at DLA Piper in Washington, D.C., said the CCPA has a provision that entitles California residents to some level of damages. He also said residents do not need to prove a direct injury because of the data breach, just that the company violated the CCPA.
“Early on we saw a lot of cases being dismissed on standing grounds. With these statutory causes of action it's going to be much more difficult to get cases dismissed at a preliminary stage,” McAndrew said. “Those cases haven't been going into a full scale discovery period.”
Because of this, he explained there will be extensive and expensive discovery that companies will be subjected to.
“Those are going to six and seven figure expenses for these companies,” McAndrew explained.
According to the report, companies spent $2.46 billion defending class actions in 2018. That spending is the highest companies have paid in defending class actions suits since 2008. Most companies, according to the report, are facing class action lawsuits only in the United States.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllHow Dana Rao Built a 'Yes' Culture at Adobe and Why He Walked Away
FTC Sues Cash-Advance Fintech Dave, Says It Deceives the 'Financially Vulnerable'
Discover Hires Interim Legal Chief as $35B Sale to Capital One Faces New Hurdles
Trending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Election 2024: Nationwide Judicial Races and Ballot Measures to Watch
- 3Guarantees Are Back, Whether Law Firms Want to Talk About Them or Not
- 4How I Made Practice Group Chair: 'If You Love What You Do and Put the Time and Effort Into It, You Will Excel,' Says Lisa Saul of Forde & O'Meara
- 5Abbott, Mead Johnson Win Defense Verdict Over Preemie Infant Formula
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250