Matt Reynolds reports on a lawsuit that involves allegations of stolen client files from a law firm. A lawyer is suing his former law firm, alleging that they terminated him when he discovered and blew the whistle on their use of confidential files from another law firm. Those files had allegedly been copied and brought to the law firm by an employee of that firm who had joined the second firm.
Normally, that type of report would just be posted on my companion blog, DataBreaches.net, but as I read his reporting on the case, I blinked. Here’s the part of the report that really caught my attention:
Maher claims the information included Waters, Krause & Paul databases, client files, settlement documents and confidential patient information, including medical records and Social Security numbers.
Maher claims that the data on the firm’s network and servers was made available to more than 370 employees, so that “a janitor, law clerk, secretary or any other personnel in the office could access this data, take this data for their own personal use and/or steal a copy of the data for themselves and then sell their services to yet another law firm who stood to gain from the misuse of the Waters, Krause & Paul clients.”
Read more on Courthouse News.
Of course, this is just one side of the story and the defendants did not provide a statement to Courthouse News, so I don’t know what they will say about all this in response. But if it is true that confidential medical information about the law firm’s clients wound up on another server for another law firm without client consent, that would be pretty upsetting.
Update: The Wall Street Journal also covers this lawsuit and has some comments from the parties:
A spokeswoman for Weitz & Luxenberg called the allegations in the suit “completely false and filed by a disgruntled former employee who was terminated from the firm.”
Peter Krause, a founding partner of Waters & Kraus, said, “We take very seriously our obligation to protect our clients’ confidences and will take whatever steps necessary to make sure their confidential information is protected.”
Well, that second statement doesn’t exactly rise to a confirmation that their data was stolen, does it? What are they doing to get discovery of W&L’s hard drive to examine it for evidence of their databases? Did the plaintiff actually download/preserve a copy?
Update 2: I have located a copy of the complaint. Reading it, it appears Maher alleges that 178 confidential client files from WKP were uploaded to W&L’s server and that the files allegedly contained:
I’m a bit confused by Paragraphs 62 and 63 of the complaint, as Maher asserts that the law firm was covered by HIPAA and HITECH. I know that lawyers and law firms can be covered if they are business associates or employees of a covered entity, but I thought that a law firm representing private clients (as in a medical malpractice suit) where the clients provide or authorize the law firm to obtain their records are not “covered entities” under HIPAA. I’ll have to find some lawyers to ask, unless any readers are lawyers who can jump in and clarify.
Even if I am correct, if the data theft/removal and exposure allegations are true, this is a data breach under California law, which means that (1) WKP has a duty to notify the 178 clients of the breach (although it’s not clear to me when the clock starts on this if they haven’t yet confirmed the allegations), and (2) California can investigate this breach. That, of course, is apart from any bar association ethics investigations or other state charges related to unlawyerly conduct.