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Data breach lawsuit may continue

Data breaches have become frightening. These incidents have imposed costs, loss of confidentiality and serious inconvenience to email users. In one case, a California federal court judge ruled that victims of data breaches may continue their civil litigation.

Yahoo was accused of failing to timely address three data breaches in 2013 and 2016. The breaches were blamed for increasing email users' exposure to identity theft and spending money on protection services, such as credit freezes and monitoring. These breaches were revealed after Verizon agreed to buy Yahoo's Internet business last June. This led to a lower purchase price of $4.5 billion.

Plaintiffs ultimately filed a lawsuit against Verizon, as purchaser of Yahoo's Internet service. They alleged that personal information was compromised in these data breaches.

Last October, they amended their complaint to include Yahoo's disclosure that the breach impacted 3 billion users. This tripled earlier estimates.

A federal judge in San Jose denied Verizon's motions to dismiss breach of contract, negligence and other claims earlier this month. Previously, she denied Yahoo's request to dismiss some claims of unfair competition, but dismissed some of the other charges in the complaint.

The judge cited the amended complaint as demonstrating that security played an important role in the plaintiffs' decision to choose Yahoo as their Internet email provider and they would have made other choices if they were notified of these problems. Because of their allegations that Yahoo knew that it had flawed security and did not address this problem, the plaintiffs can also try to prove that its term of service were unconscionable.

Federal prosecutors filed criminal charges against two Russian intelligence agents and two hackers for one of the Yahoo breaches in March 2017. One of the accused hackers, a Kazakhstan-born Canadian, pled guilty to charges of identity theft and conspiracy. The other accused are avoiding prosecution by staying in Russia.

Victims of identity theft or cases where a company did not meet contract terms, abide with legal requirements or make appropriate disclosures should seek legal assistance. An attorney can help try to obtain compensation in these cases to help make up their losses.

Source: Reuters, "Data breach victims can sue Yahoo in the United States: judge," Jonathan Stempel, March 12, 2018

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