Atlanta Federal Judge Opens Familiar Playbook in Sorting Equifax Data Breach Claims
U.S. District Chief Judge Thomas Thrash Jr. has set up separate litigation tracks for 334 consumer suits and 62 suits by financial institutions against Equifax. Thrash also will preside over separate securities fraud claims against the Atlanta-based credit bureau.
January 16, 2018 at 02:34 PM
5 minute read
The chief federal judge of Georgia's Northern District has begun corraling hundreds of lawsuits filed against Equifax over a massive data breach last year into two separate tracks for consumer and business claims.
In his first steps managing the Equifax matter, U.S. District Chief Judge Thomas Thrash Jr. took a page from the multidistrict litigation against Atlanta-based Home Depot, over which he presided. The Home Depot case stemmed from a similar but less far-reaching data breach that also exposed customers' financial and personal information to the dark web.
Thrash informed dozens of lawyers who spilled out of his courtroom and into the hall last week that he intended to separately bundle 334 suits that, to date, have been filed on behalf of consumers whose personal and financial data the Atlanta-based credit bureau had stockpiled and then left vulnerable to hackers.
Thrash said he will establish a separate track for an additional 62 suits filed against Equifax by financial institutions across the country.
But the judge rejected suggestions from class action litigators with Philadelphia firm Spector Roseman & Kodroff to create a third, separate, track for 16 Equifax contractors and other small businesses that also have sued the Atlanta-based credit bureau, saying he was “not persuaded” that there would be any prejudice in packaging their claims with the consumer suits.
The judge also decided not to include in the MDL two separate securities fraud claims now pending against Equifax that also stem from the data breach. But he said he will preside over those cases in coordination with the MDL.
Thrash similarly had bifurcated the Home Depot cases into tracks for financial institutions and for customers whose information was compromised.
Lawsuits against Equifax began hitting the courts within 24 hours of the credit bureau's announcement last September that it had been the victim of a massive hack that potentially had compromised personal and financial data it had amassed on 145.5 million consumers. The first suit was filed by former Georgia Gov. Roy Barnes, who previously had partnered with Brian Spector of Morgan & Morgan in Tampa on behalf of an estimated 50 million Home Depot consumers in a 2014 data breach MDL. That case settled in 2016 for $27 million.
In the Equifax litigation, 64 law firms already have indicated they would like to be part of a leadership committee of lawyers who would spearhead the litigation.The judge said he would appoint lead counsel and liaison counsel, all of whom would have to be local, as well as a steering committee for each of the two tracks. But, he warned, “You're not going to find me very receptive to a steering committee that is so large in an effort to accommodate everybody that wants to have a leadership position.”
“That,” he continued, “is unworkable.”
Thrash also said leadership applications will be publicly available. “They are not confidential,” he said. “Everybody is going to know what everybody else has to say.”
Applications, he said, are limited to 25 pages—double-spaced and in 14-point type with “no fudging with single-spaced footnotes or bullet points.”
Thrash then asked King & Spalding partner David Balser, who with Phyllis Sumner is leading Equifax's defense team, whether he had suggestions “as to the qualities that I ought to be looking for in terms of appointing plaintiffs' leadership.”
“I think I'm going to resist the temptation, your honor,” Balser replied.
“Probably a good idea, Mr. Balser,”' Thrash said.
Michael Smith, a member of the King & Spalding team defending the credit bureau against separate securities fraud claims, argued against including those claims in the MDL. “It looks like a lot of fun,” he said of the MDL, “but I think we would like to be off to the side.”
But James Harrod, a partner at New York's Bernstein Litowitz Berger & Grossmann, countered that the fraud cases should be included in the MDL.
“One of the allegations that we are going to make … is what did Equifax do to protect the consumer data that was the subject of the data breach,” he said. “There's no reason why a separate judge should proceed along a parallel track.”
Thrash did not fold the securities cases into the MDL. But, he said, “I think one judge ought to be handling both the MDL cases and the two securities cases.”
The securities cases, he said, “won't be technically part of the MDL, but it's going to be coordinated with the MDL.”
“So,” he added, “You're going to be with us, Mr. Smith.”
Thrash also put lawyers on notice that the leadership will be required to keep time records. There will be no more mass meetings of lawyers, he said, and no fee padding. “There will be no time logged for people just monitoring the status of conferences by phone. I'll expect there to be clear understandings between plaintiffs' leadership and everybody else that's working on the case about no padding of time and no unnecessary time being racked up just trying to enhance positions when the time comes, if it comes, for fees to be an issue,” he said.
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