Accellion reaches $8.1 mln settlement to resolve data breach litigation

By
Hooded man holds laptop computer as cyber code is projected on him in this illustration picture
REUTERS/Kacper Pempel/Illustration
  • Data breach affected the tech company's clients including retailer Kroger and law firm Jones Day
  • Settlement resolves claims against Accellion, other deals with certain clients also pending

(Reuters) - Accellion Inc has reached an $8.1 million deal with a proposed nationwide class to end litigation over a breach of its legacy file transfer product, a platform that allowed companies to securely share large or sensitive files, according to settlement papers filed in California federal court.

The Palo Alto-based tech company faced claims that it failed to properly secure sensitive personal information of millions of individuals after hackers exploited a vulnerability in Accellion's platform, according to a motion for preliminary approval of the settlement, filed by the plaintiffs' lawyers on Wednesday.

The data breach impacted a variety of Accellion clients, including law firms Jones Day and Goodwin Procter.

The proposed class, millions of individuals whose data was stored by companies that used Accellion's file transfer product, in a recently amended complaint said information including names, birthdates, Social Security numbers, medical and drivers' license information was exposed.

The current settlement would resolve claims only against Accellion, but there are pending agreements in cases against several Accellion clients over the incident, according to the Wednesday filing.

Supermarket chain Kroger Co has agreed to a $5 million settlement, which has received preliminary court approval. There are also pending settlements with Flagstar Bancorp Inc and Health Net LLC, a subsidiary of managed care company Centene Corp, the plaintiffs' lawyers said.

A representative for Accellion (which rebranded in October 2021 to Kiteworks), said the company doesn't comment on litigation. Lawyers for the company from Latham & Watkins didn't immediately respond to requests for comment on Thursday, nor did a lawyer from Ahdoot & Wolfson for the plaintiffs.

The case is Stobbe v. Accellion Inc, U.S. District Court for the Northern District of California, No. 5:21-CV-01353.

For the plaintiffs: Tina Wolfson of Ahdoot & Wolfson

For Accellion: Melanie Blunschi and Michael Rubin of Latham & Watkins

Read more:

Accellion taps Latham as fallout spreads from data breach

Kroger agrees to pay $5 million over Accellion data breach

JPML rejects bid to centralize cases over Accellion breach

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Sara Merken reports on privacy and data security, as well as the business of law, including legal innovation and key players in the legal services industry. Reach her at sara.merken@thomsonreuters.com

Read Next / Editor's Picks