The Departmental Appeals Board of the Department of Health and Human Services (“Board”) has granted summary judgment against the University of Texas MD Anderson Cancer Center (“Center”) and upheld the imposition of $4.3 million dollars in penalties against the Center for violations of HIPAA’s privacy and security rules.  In this case, the personal medical data of more than 33,000 individuals was exposed through the theft of a laptop and the loss of unencrypted thumb drives.  None of these devices was encrypted, and the laptop was not password protected. Continue Reading Appeals Board Upholds $4.3 Million in HIPAA Penalties Against Hospital

The fallout from the Yahoo data breaches continues to illustrate how cyberattacks thrust companies into the competing roles of crime victim, regulatory enforcement target and civil litigant.

Yahoo, which is now known as Altaba, recently became the first public company to be fined ($35 million) by the Securities and Exchange Commission for filing statements that failed to disclose known data breaches. This is on top of the $80 million federal securities class action settlement that Yahoo reached in March 2018—the first of its kind based on a cyberattack. Shareholder derivative actions remain pending in state courts, and consumer data breach class actions have survived initial motions to dismiss and remain consolidated in California for pre-trial proceedings. At the other end of the spectrum, a federal judge has balked at the U.S. Department of Justice’s (DOJ) request that a hacker-for-hire indicted in the Yahoo attacks be sentenced to eight years in prison for a digital crime spree that dates back to 2010. Continue Reading The Hacked & the Hacker-for-Hire: Lessons from the Yahoo Data Breaches (So Far)

The Office of Civil Rights (OCR) of the Department of Health and Human Services (HHS) has announced its first settlement of a HIPAA breach in 2018. The settlement arose from five separate breaches by five different entities owned by Fresenius Medical Care, a large provider of kidney dialysis and other medical services. The breaches involved stolen computers, a stolen USB drive, and a missing hard drive, all occurring within a five-month span in 2012. Continue Reading OCR Announces HIPAA Settlement For Data Security Breaches

Consumers are not the only ones suing retailers for payment card data breaches. The U.S. District Court for the Western District of Washington recently denied, in large part, a motion to dismiss a data breach class action brought by Veridian Credit Union, on behalf of itself and other financial institutions, against Eddie Bauer, LLC. The class action relates to a January 2016 payment card data breach that allegedly impacted “every Eddie Bauer store in the United States and Canada.”

The court dismissed Veridian’s negligence per se claim, but allowed Veridian’s negligence and state statutory claims to proceed. The court’s analysis of choice of law and negligence issues is worth a read. Continue Reading Federal Court Allows Credit Union Data Breach Class Action to Proceed Against Eddie Bauer