Business & Practice

Facebook Users Make Appearance in Cambridge Analytica Bankruptcy

May 31, 2018, 8:39 PM

Cambridge Analytica, the U.K. political consulting firm that closed its doors after a scandal over how it harvested data to influence the last U.S. presidential election, now faces a group of Facebook users in its bankruptcy.

“Data Breach Plaintiffs” filed a notice May 29 to appear in the company’s New York bankruptcy. The group is involved in two lawsuits against both Facebook and Cambridge Analytica that seek class-action status on claims that about 87 million Facebook users had their personal information taken without permission.

The filing shows the two legal actions will be represented by Lowenstein Sandler LLP in the bankruptcy. The lawsuits were brought in Delaware District Court and seek damages for what they say were invasion of privacy and increased risk of theft and data breaches. Complaints vary, and include negligence, unlawful interception of communications, and violations of a law that protects stored communications.

Personality Quiz

One from lead plaintiff Ben Redmond, a California resident, says damages should be more than $1,000 per violation. Redmond, who has been using Facebook since at least 2007, says he didn’t consent to using an application called thisisyourdigitallife.com, a personality quiz through which the alleged violations occurred. The case also represents plaintiffs in Ohio, Texas, and Illinois.

The other suit from Craig Skotnicki, a Facebook user since 2009, makes similar claims about the personality quiz, saying his user data was shared because a friend had logged into the app. If Facebook is found to have violated a 2011 consent decree over its handling of user data, it could face fines of more than $40,000 a day per violation, according to his complaint.

Both cite reports that Cambridge Analytica was hired by the Trump presidential campaign to target voters online. The notice to appear in the bankruptcy stipulates that, by doing so, neither case gives up its rights to a jury trial.

Bankruptcies usually allow companies to stall or minimize lawsuits against them. A claim must be filed for a lawsuit against a bankrupt company to continue in most cases. Although the May 29 filing doesn’t make a specific bankruptcy claim, it could be a first step toward one.

Mercer Family

The suits against Facebook and Cambridge Analytica are among a flurry of lawsuits being filed across the U.S., with more than a dozen new cases over the past few months. Some plaintiffs say they face ongoing damages because their private data is in the hands of the company.

The U.K.-based political consulting firm, which had already said it would cease operations, listed liabilities of $1 million to $10 million in its bankruptcy filing this month. The Chapter 7 petition to liquidate was signed by board members Rebekah Mercer and Jennifer Mercer, daughters of former New York hedge fund manager Robert Mercer. His family backed Donald Trump for president and helped reshape American conservative politics.

Robert Mercer, who made his fortune as co-CEO of Renaissance Technologies, has been a financial backer of Cambridge Analytica.

A lawyer for Cambridge Analytica declined to comment. Facebook didn’t immediately return a message seeking comment.

The bankruptcy case isCambridge Analytica LLC, Bankr. S.D.N.Y., No. 18-bk-11500.

©2018 Bloomberg L.P. All rights reserved. Used with permission

To contact the reporter on this story: Tiffany Kary in New York attkary@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft atngammeltoft@bloomberg.net; Rick Green

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