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District Court approves settlement in data breach suit

Privacy/Cyber Risk & Data Security Courts Data Breach California CCPA FTC Act Class Action

Privacy, Cyber Risk & Data Security

On February 22, the U.S. District Court for the Central District of California granted final approval of a class settlement and ordered a final judgment between a plaintiff class and a provider of outpatient imaging (defendant) resolving allegations that the defendant was responsible for failing to establish adequate security measures to protect their customers’ and employees’ data. According to the preliminarily approval order, a third party gained unauthorized access to the defendant’s server which stored the plaintiffs’ sensitive personal identifying information. The order noted that the security incident put the plaintiffs “at a high risk of identity theft and other cybercrimes.” The plaintiffs alleged in the complaint that the defendants violated California's Unfair Competition Law, the California Consumer Privacy Act, and the FTC Act, among other things, by failing “to adequately ensure the privacy, confidentiality, and security of employee data entrusted to it and Defendant’s failure to have adequate data security measures in place.” Under the terms of the order, the defendants are required to establish a $2.6 million settlement fund to provide monetary settlement benefits to class members within forty-five days of a preliminary approval order directing class notice. The plaintiff class will be separated into two separate tiers: a nationwide class consisting of individuals residing in the U.S. who were or may have been impacted in the data breach, and a California subclass, consisting of individuals who resided in California on July 18, 2020, who were or may have been impacted in the data breach. The order also granted $650,000 in class counsel fees and approximately $50,000 in costs and expenses. Each lead plaintiff received $1,500 as part of the settlement.