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After Sony Data Breach, Lawsuits Flood The Courts

In the past year especially, there seem to be a spate of lawsuits following every privacy or security snafu that makes a few headlines. Consider Apple (NSDQ: AAPL), which was slammed with lawsuits after its most recent privacy headline, the revelation that iPhones maintain a file that includes location data. A new analysis by Reuters (NYSE: TRI) shows just how prevalent these lawsuits have become, but also suggests it will be tough for this eager new crop of internet lawyers to actually turn their accusations into big wins.

In the wake of Sony’s admission that information for millions of accounts was stolen, Reuters has tallied no less than 25 federal lawsuits. That number shows a very active bar of plaintiffs’ lawyers who believe that they’ll be able to turn companies’ privacy snafus and data breaches into serious cash payouts.

The Reuters data meshes with anecdotes I’ve been hearing from sources in the corporate defense bar, many of whom are saying they’re defending against more privacy lawsuits than ever before.

It isn’t clear that the strategy will necessarily be a success for plaintiffs, either in the courtroom or for the firms’ bottom line–but it sure isn’t going to stop anyone from trying. So for now, significant litigation fees are going to be par for the course for companies with headline-grabbing data breaches.

The reason it might not be a great business for plaintiffs is that the payouts just aren’t that big in privacy lawsuits, compared to the “classic securities fraud cases” that sometimes yield nine-figure settlements, said Jay Edelson of the Edelson McGuire law firm. Still, Edelson McGuire, which specializes is privacy-related technology cases, has grown from five to 20 lawyers in the past three years, Edelson told Reuters.

According to Edelson, attorneys’ fees in breach cases have historically topped out at $7 million to $8 million. Reuters notes that a 2002 internet advertising case involving Doubleclick paid $1.8 million in legal fees as part of the settlement.

One Response to “After Sony Data Breach, Lawsuits Flood The Courts”

  1. I purchased an iPhone 3GS that malfunctioned nearly two
    years ago. Since then I have been requesting safety information from Apple that
    I believe should be in the public domain and would answer questions regarding
    the safe usage of the iPhone.

     

    I have not hired an attorney to represent me in this matter.
    I have not requested any monetary damages other than what Apple may deem
    appropriate. To date Apple has refused to answer my questions. I have filed
    many complaints with government agencies and congressional representatives to
    no avail.

     

    If Apple is claiming its device is harmless, and or not
    capable of causing physical damage, I would like to know why my private medical
    records were requested, why the iPhone has a unique heat shutoff feature, and
    why Apple has not answered my questions?

     

    I would also like to know why Apple has not responded to my
    complaint on the Consumer Protection Agencies, SaferProducts.gov site. The
    report can be found by entering “iphone” in their search for “Reports and Recalls”,
    or by going to http://saferproducts.gov/ViewIncident/1173237.  These reports are checked for accuracy and
    manufacturers can respond to the government before it is publicly posted.

     

    I believe my privacy has been violated and I was extorted
    into giving Apple my personal medical records, under the guise that if I
    provide my records, they would release information pertinent to an accurate
    medical diagnosis. Almost two years after the incident, I am still experiencing
    unusual sensations and sensitivity to sunlight where a malfunctioning
    superheating iPhone touched my face.

     

    My identity, medical records and private information were
    accidentally made publicly accessible by the saferproducts.gov site, until they
    were notified of the problem.

     

    One should be asking the question, is Apple conducting
    unauthorized medical experiments on its users?