DataBreaches.Net

Menu
  • About
  • Breach Notification Laws
  • Privacy Policy
  • Transparency Report
Menu

Law Firm Sued for Alleged Lax Data Security Avoids Class Action

Posted on March 9, 2017 by Dissent

Derek Borchardt and Michael F. Buchanan have an update on litigation previously noted on this site. At its heart, a lawsuit claimed a Chicago law firm, Johnson & Bell, had inadequate data security. There was no allegation of any actual breach – the suit was over inadequate data security.

Back in December of last year, we reported that for the first time, a U.S. law firm – Johnson & Bell, a mid-sized Chicago firm – was publicly named in a class action data security lawsuit.  Last month, the firm obtained a significant victory in the case.

To briefly recap, two of Johnson & Bell’s former clients claimed in their complaint that the firm had lax data security practices that put confidential client information at risk of exposure.  (Note that the plaintiffs did not claim that any actual breach had occurred, an omission which presents a significant question of standing under Article III, an issue this blog has recently covered.)

The retainer agreement between the firm and its former clients included an arbitration clause, which stated in pertinent part: “In the unlikely event of any dispute under this agreement, including a dispute regarding the amount of fees or the quality of our services, such dispute shall be determined through binding arbitration.”  Based on that clause, Johnson & Bell filed a motion to require the plaintiffs to arbitrate their dispute on an individual, rather than class, basis.  The firm argued that because the arbitration clause did not explicitly state that arbitration may be on a class basis, the only permissible arbitration was on an individual basis.  The court agreed.

Read more on Patterson Belknap Data Security Law Blog.

I asked Jay Edelson of Edelson, PC, lawyers for the plaintiffs, his perspective on the decision and its potential impact on other similar cases they had planned to file. He replied:

We filed suit (under seal) seeking, first, injunctive relief to fix the alleged security vulnerabilities. Once we were satisfied of the relevant fixes, we then moved to unseal the case and dismissed it. The dismissal did not mean that we aren’t pursuing it, but rather was in recognition of the fact that there is an arbitration clause. Johnson & Bell asked the Court to rule that we could arbitrate on an individual basis only (i.e. not on behalf of a class).

The Court agreed with them and we are going to appeal that decision. However, regardless of whether this can be brought as a class action, we will still pursue the suit. The question will be whether the class members are required to bring many individual arbitrations or can do it all at once.

In terms of other similar lawsuits, because this is a procedural issue (as opposed to one on the merits), it doesn’t have much impact unless a defendant has a similar arbitration clause as Johnson & Bell’s. Even if they do, our guess is that because individual arbitrations are so expensive, it is unlikely that other defendants will choose to potentially face hundreds if not thousands of arbitrations instead of fighting one single (albeit larger) case.

So stay tuned, I guess. I expect that there will still be issues raised of standing if there’s been no actual breach, but we’ll have to wait and see.


Related:

  • CrowdStrike catches insider feeding information to ScatteredLapsus$Hunters
  • Threat actors have reportedly launched yet another campaign involving an application connected to Salesforce
  • Report released on PowerSchool cyber attack
  • Sue The Hackers – Google Sues Over Phishing as a Service
  • Five major changes to the regulation of cybersecurity in the UK under the Cyber Security and Resilience Bill
  • From bad to worse: Doctor Alliance hacked again by same threat actor (2)
Category: Commentaries and AnalysesOf Note

Post navigation

← Dutch detectives unravel 3.6 million encrypted emails sent by criminals
NV: Personal info found in files dumped on sidewalk →

Now more than ever

"Stand with Ukraine:" above raised hands. The illustration is in blue and yellow, the colors of Ukraine's flag.

Search

Browse by Categories

Recent Posts

  • Google and Apple roll out emergency security updates after zero-day attacks
  • Doxers Posing as Cops Are Tricking Big Tech Firms Into Sharing People’s Private Data
  • Virginia Urology Silent on Possible Data Breach as Purported Patient Data Begins to Leak
  • Village of Golf Manor considering paying ransom amid cyberattack (1)
  • Teen who allegedly stole millions of personal data records arrested in Spain
  • Akira ransomware: FBI tallies 250 million in payouts
  • IE: HSE confirms second ransomware attack but ‘no evidence’ patient data was stolen
  • Examining impact of federal relief program after major healthcare cyberattack — Research Brief
  • Justice Department Announces Actions to Combat Two Russian State-Sponsored Hacking Groups
  • Should entities be required to disclose the name of a vendor if the breach was at the vendor’s?

No, You Can’t Buy a Post or an Interview

This site does not accept sponsored posts or link-back arrangements. Inquiries about either are ignored.

And despite what some trolls may try to claim: DataBreaches has never accepted even one dime to interview or report on anyone. Nor will DataBreaches ever pay anyone for data or to interview them.

Want to Get Our RSS Feed?

Grab it here:

https://databreaches.net/feed/

RSS Recent Posts on PogoWasRight.org

  • CBP Agents Held This U.S. Citizen for Hours Until He Agreed To Let Them Search His Electronic Devices
  • U.S. Plans to Scrutinize Foreign Tourists’ Social Media History
  • ANNOUNCEMENT: EFF Launches Age Verification Hub as Resource Against Misguided Laws
  • FTC Denies Petition from SpyFone App CEO to Vacate 2021 Order
  • Privacy concerns raised as Grok AI found to be a stalker’s best friend

Have a News Tip?

Email: Tips[at]DataBreaches.net

Signal: +1 516-776-7756

Contact Me

Email: info[at]databreaches.net
Security Issue: security[at]databreaches.net
Mastodon: Infosec.Exchange/@PogoWasRight
Signal: Dissent.73
DMCA Concern: dmca[at]databreaches.net
© 2009 – 2025 DataBreaches.net and DataBreaches LLC. All rights reserved.