Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES NEWS: Sony faces class action after North Korea’s alleged data breach, (Jan 7, 2015)

By Greg Hammond, J.D.

Former Sony Pictures Entertainment, Inc. employee Lawon Exum has filed a class action suit in the federal district court in San Diego against Sony for failing to develop, maintain, and implement Internet security measures on its corporate network. Exum alleges, in part, violations of California’s Unfair Competition Law (Exum v. Sony Pictures Entertainment, Inc., January 6, 2015).

According to the complaint, Sony suffered a massive data breach of its corporate network in November 2014, in which hackers gained access to sensitive and confidential data, including full names, home addresses, email addresses, password files, private key files, social security numbers, dates of birth, bank account information, passport and other personal identification information, retirement plan information, health insurance, and medical information. Exum asserts that this was not the first cyber-attack that Sony has experienced, as 77 million PlayStation accounts were hacked in 2011, and over 1 million Sony customer passwords, phone numbers, email addresses, home addresses, and birth dates were obtained in a separate data breach that same year. “Sony failed to improve its corporate network security in the three years since” these hacks, Exum alleged.

Consequently, Exum claims that Sony violated California’s Unfair Competition Law, which prohibits acts of “unfair competition” such as unlawful, unfair, or fraudulent business acts or practices. The complaint asserts that Sony Pictures’ conduct was unlawful and unfair, because it violated the Confidentiality of Medical Information Act, the Health Insurance Portability and Accountability Act of 1996, and it was actionable negligence. The class members allegedly suffered damages from the purchase of credit and identity theft monitoring services; the canceling of credit cards and bank accounts, and fees associated therewith; and time invested in protecting themselves from identity theft and other fraud as a result of Sony’s alleged breaches.

Exum seeks to represent a nationwide class of “all residents of the United States who had their personal information compromised as a result of the data breach of Sony Pictures’ corporate network,” or in the alternative, a California class of “all residents of California who had their personal information compromised as a result of the data breach of Sony Pictures’ corporate network.” He is seeking actual, general, special, incidental, statutory, and consequential damages; pre-judgment and post-judgment interest; injunctive and/or declaratory relief; and attorney fees and costs.

The case is No. 8:15-cv-00016.

Attorneys: John P. Fiske (Gomez Trial Attorneys) and Katrina Carroll (Lite Depalma Greenberg, LLC) for Lawon Exum.

Companies: Sony Pictures Entertainment, Inc.

News: StateUnfairTradePractices Privacy CaliforniaNews