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Financial Services Law Insights and Observations

District Court preliminarily approves $4.75 million data breach settlement

Courts Data Breach Privacy/Cyber Risk & Data Security Settlement State Issues California Texas

Courts

On March 3, the U.S. District Court for the Western District of Texas preliminarily approved a $4.75 million class action settlement resolving claims between a pharmacy benefits manager and consumers in six different proposed class actions filed in Texas and California. The court also conditionally certified a nationwide settlement class and a California settlement subclass. According to the memorandum in support of the plaintiffs’ motion for preliminary approval of the settlement, plaintiffs claimed the company acted negligently by failing to implement reasonable safeguards for protecting customers’ personally identifiable information and preventing a 2021 data breach, which exposed their sensitive, protected health information. The plaintiffs also alleged that the company breached California privacy and consumer protection laws. If the settlement is granted final approval, the company will be required to create a $4.75 million settlement, and “develop, implement, and maintain a comprehensive information security program that is reasonably designed to protect the security, integrity and confidentiality” of customers’ personal data. The company may also be responsible for a portion of attorneys’ fees, costs, and service awards.