Ashley Madison Hack: How the Legal Case Is Shaping Up
— -- The fallout from the Ashley Madison hack and data dump is now being dragged into the courtroom.
As Ashley Madison's parent company, Avid Life Media, works with a coalition of law enforcement in the United States and Canada to track down the hacker or hackers, some of the people who were outed by the breach as being alleged clients are putting legal pressure on Avid Life Media.
Behnam Dayanim, who is co-chair of the Privacy and Cybersecurity Practice at the Paul Hastings law office in Washington, D.C., and not involved in any action against Avid Life Media told ABC News today, "Ordinarily, in a consumer class action involving a data breach, the biggest hurdle consumers have faced is the ability to show harm or damage. Here I think it will be easier for the plaintiffs' attorneys to establish harm."
Lawsuits
A class-action complaint was filed this week in the United States District Court for the Central District of California this week alleging a breach of privacy and negligence. The lead plaintiff is listed as John Doe, a Los Angeles man who created an account in March 2012.
In the wake of the breach, a woman in St. Louis filed a federal lawsuit against Avid Life Media claiming she had paid the company $19 to permanently delete her profile, according to the Associated Press. The hackers claim the fee was collected from people but the data was never scrubbed from the system.
Even more lawsuits are likely to be filed in the United States. The Dallas-based Schmidt Law Firm said on its website that its attorneys are in the process of pursuing a class-action lawsuit and are accepting plaintiffs from all 50 states.
Two Canadian law firms -- Charney Lawyers and Sutts, Strosberg LLP -- have joined forces to file a $760 million CAD (about $573 million USD) class-action lawsuit against Avid Life Media on behalf of Canadian users who were impacted by the breach. Other than a lead plaintiff, around 1,000 people have contacted attorneys at the firms to participate in the lawsuit, attorney Ted Charney told ABC News today in an email.
Avid Life Media is headquartered in Toronto.
What's at Stake
The short answer: Money, relationships and reputations. If Ashley Madison loses the cases, they could potentially be forced to pay out hundreds of millions of dollars in damages, which could have the potential to put a strain on the company, which reported $115.5 million in revenue last year.
The federal lawsuit filed in California does not name a specific amount of money, however, the complaint states the plaintiff and anyone who joins the class-action lawsuit are seeking "compensatory and punitive damages with interest, attorneys' fees and costs, and any other and further relief as this Court deems just and proper."
The Canadian lawsuit names Eliot Shore as the lead plaintiff. The Ottawa man joined Ashley Madison for a short time after losing his wife of 30 years but never met anybody in person from the site, according to the two law firms representing Shore.
Expectation of Privacy
When signing up for the service, Avid Life Media makes it clear that users have a reasonable expectation of privacy. The privacy policy on Ashley Madison states the company treats "data as an asset that must be protected against loss and unauthorized access" and uses "standard practices and technologies," including firewalls and encryption, to help protect user data from prying eyes.
"If I were representing Ashley Madison, I would look to see what my terms of use actually stated and I would argue I had in place reasonable security measures," Dayanim said. "And the fact those measures were hacked doesn't mean we breached our promises to our customers."
Avid Life Media has not publicly commented on how the hacker or hackers, who call themselves the Impact Team, were able to breach its system, leaving security experts unable to make observations about what, if anything, could have been done to prevent the hack.
