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When companies are hit with cybersecurity incidents, class action privacy litigation often follows. However, claimants in these kinds of cases face a threshold challenge of showing they have suffered a sufficient “injury in fact” to establish that they have standing to assert their claims. The following guest post, written by Paul Ferrillo, Kristine Argentine, Emily Dorner, and Alexandra Drury of the Seyfarth Shaw law firm, provides a survey of the current state of play for the standing requirements in this type of litigation. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article. 
Continue Reading Guest Post: First There was Litigation; And Then There Was Standing

On July 6, 2021, after the Wall Street Journal reported that prior to DiDi’s June 30, 2021 U.S. IPO,  government authorities had urged the Chinese ride-hailing firm to postpone the offering, but that the company, under pressure from investors, had gone ahead with the IPO anyway, it seemed that it would only be a matter of time before DiDi would be hit with a U.S. securities lawsuit. Indeed, as it turned out, the same day the Journal article appeared, an investor filed a U.S. securities class action lawsuit against the company. As discussed below, the lawsuit is based on cybersecurity and privacy concerns relating to the company’s ride-hailing app. A copy of the investor’s July 6, 2021 complaint can be found here.
Continue Reading Chinese Ride-Hailing Firm DiDi Hit With Securities Suit Related to Its Recent IPO

In a very interesting June 16, 2021 opinion, the Ninth Circuit has reversed in part the district court’s dismissal of the privacy and cybersecurity-related securities class action lawsuit filed against Google- parent Alphabet, Inc, relating the company’s discovery of and decision not to disclose a software vulnerability that exposed user data of nearly half a million users of the Google+ social media site. The appellate court’s decision, a copy of which can be found here, could represent a significant development in the evolution of cybersecurity and privacy-related securities litigation.
Continue Reading Ninth Circuit in Part Reverses Dismissal of the Google+ User Data Securities Lawsuit

In prior posts on this site, I have identified privacy-related issues as a potentially important source of future D&O claims. In making these projections, one thing I had in mind was the possibility of claims as a result of the enforcement of the EU’s General Data Protection Regulation, which went into effect in May 2018. There have in fact already been GDPR-related securities class action lawsuits filed in the U.S., including the securities suit filed in August 2018 against U.K.-incorporated media tracking company Nielsen Holdings. In a January 4, 2021 opinion, Southern District of New York Judge Jesse Freeman granted in part and denied in part the defendants’ motion to dismiss the Nielsen Holdings lawsuit. Of significance to the questions concerning privacy-related claims, the plaintiff’s allegations concerning defendants’ statements after GDPR went into effect about the GDPR’s impact on the company survived the dismissal motion. A copy of Judge Furman’s opinion can be found here.
Continue Reading GDPR-Related Securities Suit Against Nielsen Holdings in Part Survives Dismissal Motion

The directors’ and officers’ liability environment is always changing, but 2020 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2021 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2020, with a focus on the future implications. Please note that on Wednesday, January 13, 2021 at 11:00 AM EST, my colleague Marissa Streckfus and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2020. Registration for the webinar can be found here. I hope you will please join us for the webinar.
Continue Reading The Top Ten D&O Stories of 2020

More than a month ago, when I first wrote about the possibility that the coronavirus outbreak could lead to D&O claims, I noted that the pandemic was having a devastating impact on certain industries. At the same time, I noted that the viral outbreak could prove a boon for other industries; among the industries I cited as a possible winner was the video teleconferencing industry. Indeed, since the onset of the outbreak’s onset, many of us have for the first time used the services of Zoom Video Telecommunications and Zoom video teleconferences have been proliferating. But while Zoom usage has soared, privacy and security concerns have also arisen.

Now Zoom has been hit with a securities class action lawsuit based on allegations that the surge in usage following the coronavirus outbreak allegedly revealed allegedly undisclosed weaknesses in company’s security, and alleged privacy and security weaknesses contrary to the company’s alleged representations. As discussed below, in addition to representing an example of a coronavirus-related securities suit, the new lawsuit also represents an example of the ways in which privacy concerns can lead to D&O claims.
Continue Reading Zoom Hit With Securities Suit Raising Pandemic-Linked Allegations Based on Privacy Concerns

Eric C. Scheiner
Jennifer Quinn Broda

The long-standing and traditional view is that corporations’ objectives should be to maximize shareholder value. More recently, a variety of commentators and observers have argued that corporations have larger social responsibilities. However, as discussed in the following guest post from Eric C. Scheiner and Jennifer Quinn Broda, efforts by companies to fulfil corporate social responsibilities may involve their own risks and even result in D&O claims. By the same token, failing to take action could result in claims as well. These trends have important implications for insurers and for policyholders alike. Eric is a Partner and Jennifer is Of Counsel in the Chicago office of Kennedys. I would like to thank Eric and Jennifer for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Eric’s and Jennifer’s article.
Continue Reading Guest Post: Potential D&O Risks Arising from Corporate Social Responsibility

The liability environment for directors and officers is always in a state of change, but 2019 was a particularly eventful year in the D&O liability arena, with important consequences for the D&O insurance marketplace. The past year’s many developments have significant implications for what may lie ahead in 2020 – and possibly for years to come, as well.  I have set out below the Top Ten D&O Stories of 2019, with a focus on the future implications.
Continue Reading The Top Ten D&O Stories of 2019