Legal Newsline

Wednesday, January 22, 2020

Location of Ashley Madison MDL could provide hurdle for plaintiffs

By Emma Gallimore | Dec 29, 2015


ST. LOUIS (Legal Newsline) - The court in which class action lawsuits against the dating website Ashley Madison were consolidated is outside of the jurisdiction of a federal circuit that has allowed plaintiffs who experienced no injuries to pursue similar data breach claims.

Class action lawsuits over privacy issues raised by this summer’s cyberattack on Ashley Madison, which targets married individuals seeking to have affairs, will be consolidated in St. Louis federal court, which has its appeals heard by the U.S. Court of Appeals for the Eighth Circuit.

Andrew Phillips, senior counsel at McGuireWoods, previously speculated that the plaintiffs would push to have the case centralized in the Seventh Circuit due to the precedent set by Remijas v. Neiman Marcus.

Remijas was the first federal appellate court to find that consumer data breach victims had Article III standing to pursue a class action even in the absence of unreimbursed fraud or identity theft,” Phillips told Legal Newsline.

“In Illinois district court, Remijas would be controlling authority.”

 With the case situated outside the Seventh Circuit, the court will not be bound to the Remijas precedent.

“This may make it more difficult for Plaintiffs to get over the initial standing hurdle,” Phillips said.

 Five cases filed against Avid Life Media, the Canadian company that owns Ashley Madison, will be coordinated before U.S. District Judge John Ross of the Eastern District of Missouri. Ross is experienced in handling multidistrict litigations and presided over the Schnuck Markets, Inc. case, which also concerned customer data security breach issues.

The Judicial Panel on Multidistrict Litigation cited several reasons for its choice of the Eighth Circuit - it was the site of the first filed case, had the highest level of support from both plaintiffs and defendants, was centrally located and had a judge who was both willing and experienced.

In July, a group of hackers known as “The Impact Team” stole sensitive consumer data that included not just email addresses and names, but also information about sexual preferences and other private matters.

It threatened to post the information of all 37 million users online if the website was not permanently shut down.

When Avid Life Media refused to give in to the demands, the hackers followed through with their threat. Site users began filing lawsuits within days. The first was filed in the Eastern District of Missouri.

Five lawsuits - one in Missouri, two in the Central District of California, one in the Northern District of Alabama and one in the Northern District of Texas - will be consolidated in the Missouri court.

There are also 13 related actions pending in eight districts. These are known as tag-along actions, civil actions that involve common questions of fact with existing multidistrict litigations. Right now, these actions are not included in the initial transfer order.

The Judicial Panel on Multidistrict Litigation may choose to transfer these actions at a later date. Only the plaintiff in the potential tag-along action in the District of Maryland has raised opposition to including their action as a tag-along with the centralized proceedings.

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U.S. Court of Appeals for the Eighth Circuit