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Equifax Loses Bid to Drop Data Breach Claims Under New York Law

July 9, 2020, 6:26 PM

Equifax Inc. has to face claims tied to its 2017 data breach of violating New York consumer protection law in failing to protect the information, a federal court ruled.

U.S. District Judge Brian Cogan on Wednesday rejected the company’s dismissal bid in the Eastern District of New York, saying plaintiff Matthew Weiss’ claim is plausible under the state’s deceptive acts and practices law.

Weiss also beat a motion by the credit reporting company to dismiss the claims because he alleges opting out of a larger class action, Cogan ruled.

Courts toss claims following class action settlements under similar facts, unless a plaintiff to the action opts out of the deal. Companies hit by a breach, however, can beat data security claims in later trial stages using standing or jurisdictional challenges.

Equifax did beat claims that it violated the federal Fair Credit Reporting Act, because Weiss’ allegations were “inadequate,” Cogan wrote. Also, personal data stolen in a breach doesn’t fall within that law’s purview, he wrote.

An Equifax representative didn’t immediately respond to a request for comment.

The case stems from the breach that exposed information of more than 145 million American consumers.

Equifax on Jan. 14 reached a $380.5 million settlement with consumers. It reached a separate $575 million deal in July 2019 with the Federal Trade Commission, the Consumer Financial Protection Bureau, and state attorneys general.

King & Spalding LLP represents Equifax. Raymond Nardo Attorney at Law represents Weiss.

The case isWeiss v. Equifax, Inc., 2020 BL 253780, E.D.N.Y., No. 20-cv-1460, motion denied 7/7/20.

To contact the reporter on this story: Daniel R. Stoller in Washington at dstoller@bloomberglaw.com

To contact the editor responsible for this story: John Hughes at jhughes@bloombergindustry.com; Keith Perine at kperine@bloomberglaw.com

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