On the Docket - Data Breach
Mar 27, 2019

LEAD STORY

The U.S. Supreme Court declined to hear an appeal by a national online retailer, letting a lawsuit proceed over a 2012 hack that exposed the personal information of 24 million customers.  The online shoe and clothing retailer argued unsuccessfully that the customers couldn’t sue without proof that they were harmed in a breach.  The lawsuit is seeking class action status.

 

HOW’D WE GET HERE?

In January 2012, hackers broke into the retailer’s computer system and gained access to servers containing identifying information for 24 million customers, including names, contact details and partial credit card numbers.  A federal judge in Nevada ruled that only victims who claimed financial loss could sue.  However, in March 2018, the Ninth Circuit Court of Appeals reversed that decision finding that customers can sue if they can show a substantial risk of harm and that it is impending.

 

IMPLICATIONS

In the above case, only two dozen people out of the 24 million people have claimed their data might have been misused because of the data breach.  This case has major implications across the business world, where companies are seeking and storing more data about customers than ever.  Significant data breaches are becoming a common occurrence, and this case can help determine how much liability corporations will have if customer data is exposed, regardless of how it is used.

 

ON THE COURT (NO, NOT YOUR BRACKET)

In other Supreme Court news, a constitutional amendment was introduced Monday, which would preserve the court at nine justices.  Some Democratic presidential candidates have expressed an openness to expanding the number of Supreme Court seats.  The number of justices is not fixed in place by the Constitution and has been set at nine by Congress for 150 years.  The 2020 election is still 20 months away.

 

Opioid Lawsuits

OKLAHOMA

Purdue Pharma has agreed to pay $270 million to settle a historic lawsuit by the Oklahoma attorney general, who accused four major pharmacy companies of deceptively marketing opioids and fueling a drug epidemic that left thousands dead in the state.  Nearly $200 million of the settlement will go towards establishing the National Center for Addiction Studies and Treatment at Oklahoma State University’s health center in Tulsa.  Local governments will get $12.5 million.  On Monday, the Oklahoma Supreme Court rejected the drugmakers’ appeal to delay the trial, which is scheduled to begin May 28.  This is the first state set for trial.  

 

STATUS UPDATE

Nearly every state has filed lawsuits against drugmakers, distributors and retailers.  A consolidated federal case that includes more than 1,500 counties, hospitals, tribes, and others is set to be argued in late October in Cleveland.  Purdue’s Oklahoma agreement is the first settlement to come out of the barrage of lawsuits.  We’ll keep watch as the wave of opioid litigation continues.

 

Making Our Way Around the Country

COLORADO

The Colorado Court of Appeals ruled that employers seeking to discontinue maintenance medical benefits once an employee has reached maximum medical improvement (MMI) after a claim has otherwise closed does not need to first seek to reopen the claim.  In the case, the claimant argued that because her claim was closed, the employer could only modify her maintenance medical benefits by first seeking to reopen the claim.  The Appeals Court disagreed since future maintenance medical benefits are not yet awarded, those benefits remain open even if a claim is closed.

 

ASBESTOS

The U.S. Supreme Court ruled that manufacturers are liable for asbestos-containing materials they did not make, distribute or install, but were needed for their equipment to function properly.  A maritime tort case, Justice Brett Kavanaugh wrote the majority opinion that a product manufacturer has a duty to warn when their products may require incorporation of a part is likely to be dangerous and the manufacturer has no reason to believe the product’s users will realize that danger.

 

APRIL FOOL’S DAY

Yup, April 1st is just around the corner.  Most business interruption policies call for closing this day of the year because of the number of claims that result from damage by office pranks – JUST KIDDING.  While most pranks and jokes are harmless, don’t pull these workplace pranks that went too far.  Continued luck on your brackets – mine are still barely surviving.

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