Game Changer; Florida Court Rules On Settlement for Data Loss

Published On May 1, 2014 | By Tom Huskerson | Legally Speaking

avmed-individual

In a precedent setting case a Florida Court has approved a settlement against Avmed  for a data loss.The decision was handed down by the U.S. Court of Appeals for the 11th District of Florida.

AvMed, a health insurer, had two laptop c0mputers stolen in 2009 that contained the names and personal health information of as many as 1.2 million of its customers. But only 460,000 will receive payments. The information was not encrypted. None of the consumer/plaintiffs suffered identity theft or any other direct losses. However they blamed AvMed for breach of contract and fiduciary duty, negligence and unjust enrichment. 

Courts do not normally side with the consumer in data breach cases. Most rulings have been decided on the fact that, although information was lost, no direct harm came to the consumer. At least none that could be proven and the court would not rule on future damages.  This was the first case where the plaintiffs won without evidence of actual loss.  The U.S. District Court for the Southern District of Florida originally dismissed the case.  The case was appealed and the plaintiffs won that appeal. AvMed’s second attempt at a dismissal failed forcing the $3 million settlement. Other requirement of the settlement are;

  • Mandatory security awareness and training programs for all company employees;
  • Mandatory training on appropriate laptop use and security for all company employees whose employment responsibilities include accessing information stored on company laptop computers;
  • Upgrading of all company laptop computers with additional security mechanisms, including GPS tracking technology;
  • New password protocols and full disk encryption technology on all company desktops and laptops so that electronic data stored on such devices would be encrypted at rest;
  • Physical security upgrades at company facilities and offices to further safeguard workstations from theft;
  • Review and revision of written policies and procedures to enhance information security.

This ruling is a clear precedent for future data breach cases. The decision sends the message that customers’ expect companies to protect their information and invest in data security.

Breaking It Down!

How many black people have lost data? Do you shop at Target?  How about Sally Beauty Supply? Then you have. Here is where the game changes people. If you get a letter in the mail saying someone you do business with has suffered a data breach and your information was compromised; you have a case. Get a lawyer! This decision means that precedent has been set and believe me a lot of companies will take notice. In the past they would offer you credit monitoring. Let me tell you, credit monitoring is nothing! Now a court has agreed with the consumer that data breaches have become intolerable. The key to this decision, and why it is so important, is no evidence of loss was present. In the past you had to prove some damage. This settlement has changed that.

The Florida Court of appeals has changed the legal landscape and the lawyers will be all over the next major data breach. Or any data breach. Companies that suffer data breaches will begin bleed cash and they know it. OK, $3 million isn’t much but no no company wants to be next to face a court after this decision. The courts have to consider the legal precedent set here. You, as a consumer, need to get in on the next class action lawsuit that involves a data breach. It’s money that these corporations understand and if they have to pay you when they lose data then maybe things will change. Go get ’em!

 

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About The Author

Tom Huskerson Bio Born in Richmond Virginia Tom Huskerson is a military veteran who settled in California after his discharge. He attended Santa Barbara City College where he began his writing career as a campus reporter. He worked as an intern news reporter for the Santa Barbara News-Press writing feature stories before moving on to San Francisco. At San Francisco State University Tom studied broadcast communications and began to focus on the Internet. He completed his graduate thesis on Internet advertising. Tom was the first student to ever focus on the Internet as a graduate student at San Francisco State University. After graduation he went to work for Zona Research in California’s Silicone Valley. As a research associate Tom supported senior analyst writing on the latest developments in the Internet industry. During the dot com boom Tom worked for several web businesses as a market researcher and analyst. As a writer and researcher Tom has authored various technical works including a training program for Charles Schwab security. Other projects included professional presentations on workplace violence and hiring security contractors. Tom has returned to focus on writing both fiction and non-fiction works and blogging for a travel website. He has published two books of short stories and completed two novels. Tom is the owner of Scribe of Life Literature and EbonyCandle. Most recently Tom has launched the blog African American Cyber Report. The blog is the result of his desire to inform the African American community of the dangers and benefits of the cyber age. In his blog Tom reports on information security, new and analysis, scams and hoaxes, legal happenings and various topics that arise from the age of information. Tom believes that technology is a necessary tool for black people and they should know what is happening. Tom writes believing that techno speak is for the professional and that valuable information can be communicated using plain language. As a result he has embraced the motto, Less Tech, More Knowledge.

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