Ashley Madison Dating Site Operators Agree To $11.2 Million Settlement Of Missouri Federal Multidistrict Litigation Stemming From Data Security Breach
On July 15, 2015, a data security breach affected AshleyMadison.com, an online dating website designed to facilitate intimate relationships for individuals married or in a committed relationship. The breach resulted in the electronic theft of personally identifiable and financial information of 37,000,000 users. Some of the information was subsequently released on the internet. Users alleged that the breach included account information of users who had paid a fee to purge their information from the database and revealed that AshleyMadison.com used mechanisms to mimic female users to induce others to make purchases.
Various cases were filed in federal court arising from the data security breach. On Dec. 9, 2015, the Judicial Panel on Multidistrict Litigation transferred five related actions to the U.S. District Court for the Eastern District of Missouri for coordinated pretrial proceedings. The litigation was assigned to Judge John A. Ross. On June 24, 2016, a first amended consolidated class action complaint was filed against Avid Life Media, Inc., Avid Dating Life, Inc., and the former chief executive officer of Avid Life Media, Noel Biderman, alleging violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.S. § 1962, and the federal Stored Communications Act, 18 U.S.C.S. § 2702; negligence and negligence per se; breach of implied contract – data breach; breach of contract – paid delete; unjust enrichment; negligent misrepresentation; and violations of various state consumer fraud and protection acts, the California Customer Records Act, and various state data breach notification statutes.
Retired U.S. District Court Judge Layn Phillips made a mediator recommendation that formed the basis of a settlement in principle dated April 21, 2017. Ruby Corp., previously named Avid Life Media, Inc., and Ruby Life Inc., previously named Avid Dating Life Inc., agreed to pay $11,200,000 to create a settlement fund. Class counsel agreed to request no more than one third of the fund for attorneys' fees along with reasonable costs and expenses and no more than $5,000 for each class representative for service awards. A joint motion for preliminary approval of the settlement was filed on July 14, 2017.
Plaintiffs are represented by interim co-lead counsel John J. Driscoll, Christopher J. Quinn and Gregory G. Pals of The Driscoll Law Firm and W. Lewis Garrison Jr., Christopher B. Hood, Taylor C. Bartlett and James F. McDonough III of Heninger Garrison Davis LLC. Plaintiffs’ interim liaison counsel includes Douglas P. Dowd, William T. Dowd and Alex R. Lamaghi of Dowd & Dowd PC. Plaintiffs’ interim executive committee includes John Arthur Eaves Jr. of John Arthur Eaves, Attorneys at Law, Gary F. Lynch and Jamisen A. Etzel of Carlson Lynch Sweet & Kilpela LLP, Thomas A. Zimmerman Jr. of Zimmerman Law Offices PC, Julian A. Hammond, Ari Cherniak and Polina Pecherskaya Hammondlaw PC and Katrina Carroll and Kyle Alan Shamberg of Lite DePalma Greenberg.
Defendant Noel Biderman is represented by William S. Ohlemeyer, Christopher M. Green and Ian M. Dumain of Boies Schiller Flexner LLP.
Avid Dating Life Inc. and Avid Life Media Inc. are represented by Robert A. Atkins and Yahonnes Cleary of Paul Weiss Rifkind Wharton & Garrison LLP and Richard P. Cassetta and Helen Looney of Bryan Cave LLP.
Lexis Advance Subscribers may view the complete summary here: In Re: Ashley Madison Customer Data Security Breach Litigation; 2017 Jury Verdicts LEXIS 2022.
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