Business LawData Security & Privacy

Class Action Lawsuit Filed Against LinkedIn Over Loss of User Passwords

A lawsuit was filed in San Jose, CA, on June 15, 2012, seeking class action status against LinkedIn, Corp., stemming from the recent data breach of user passwords that ended up on a Russian Internet forum.  The lawsuit filed by a Chicago-based attorney, Ms. Katie Szpyrka, accuses LinkedIn of deceiving its customers and for failing to implement adequate industry security standards for database security.  The boutique law firm Ms. Szpyrka works for, Edelson McGuire, has long litigated data breach cases, and has recently won victories against Internet-based companies.  The Plaintiff has demanded damages in the amount of $5 million.  LinkedIn promptly responded to the lawsuit by stating the lawsuit is without merit, and that no harm was caused as a result of the data breach. 

Regardless of whether the latest class action lawsuit against LinkedIn has merit, organization’s need to create a ‘tone at the top’ paradigm shift regarding how mission-critical data is secured, or risk defending lawsuits, both with and without merit.

In other data breach class action news, last week, a federal court in Nevada consolidated nine class action lawsuits filed against Amazon.com’s subsidiary, Zappos.com, for a data breach that occurred back in January 2012.  These high-profile lawsuits are just a small example of how class action attorney’s are beginning to see the financial benefit of filing litigation claims in a court of law. 

As a result of the rising tide of data breach class action litigation, organization’s would be prudent to adopt a paradigm shift in how they secure mission-critical data.  Many industries have witnessed this same cycle of consumer protection (i.e. auto industry) – companies will create a product that causes harm on consumers; get a way with it for a while; plaintiff’s bar begins to win a few cases in court; industries try to “go it alone” without government intervention; they fail; large class action lawsuit changes the business standards/practices; and government creates/enforces laws to deal with consumer (i.e. voter) complaints.

As sure as the Sun will rise tomorrow, the cycle towards Internet regulation is in full motion.  The only question is – which Internet-based company will become the next W.R. Grace?

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