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In re Premera Blue Cross Customer Data Security Breach Litigation

United States District Court, D. Oregon

November 5, 2018

IN RE PREMERA BLUE CROSS CUSTOMER DATA SECURITY BREACH LITIGATION This Document Relates to All Actions.

          Kim D. Stephens, Christopher I. Brain, and Jason T. Dennett, Tousley Brain Stephens PLLC, Keith S. Dubanevich, Steve D. Larson, and Yoona Park, Stoll Stoll Berne Lokting & Shlachter PC, OR Tina Wolfson, Ahdoot and Wolfson PC, James Pizzirusso, Hausfeld LLP, and Karen Hanson Riebel and Kate M. Baxter-Kauf, Lockridge Grindal Nauen PLLP, Of Attorneys for Plaintiffs.

          Paul G. Karlsgodt, BakerHostetler LLP, James A. Sherer, BakerHostetler LLP, Daniel R. Warren and David A Carney, BakerHostetler LLP, and Darin M. Sands, Lane Powell PC, Of Attorneys for Defendant.

          OPINION AND ORDER

          MICHAEL H. SIMON, DISTRICT JUDGE

         Plaintiffs bring this putative class action against Defendant Premera Blue Cross (“Premera”), a healthcare benefits servicer and provider. On March 17, 2015, Premera publicly disclosed that its computer network had been breached. Plaintiffs allege that this breach compromised the confidential information of approximately 11 million current and former members, affiliated members, and employees of Premera. The compromised confidential information includes names, dates of birth, Social Security Numbers, member identification numbers, mailing addresses, telephone numbers, email addresses, medical claims information, financial information, and other protected health information (collectively, “Sensitive Information”). According to Plaintiffs, the breach began in May 2014 and went undetected for nearly a year. Plaintiffs allege that after discovering the breach, Premera unreasonably delayed in notifying all affected individuals. Based on these allegations, among others, Plaintiffs bring various state common law claims and state statutory claims.

         Before the Court is Plaintiffs' motion for sanctions. Plaintiffs request sanctions for Premera's alleged discovery misconduct in destroying a computer and data loss prevention (“DLP”) logs allegedly containing information that could have shown that the hackers exfiltrated the Sensitive Information of the putative class members. Plaintiffs request an order: (1) instructing the jury to presume that exfiltration of Sensitive Information occurred; (2) precluding Premera's expert consulting firm Mandiant or any other expert working for Premera from offering any testimony that the expert found no evidence of data exfiltration; and (3) precluding Premera from introducing evidence about the spoliated evidence. For the reasons discussed below, Plaintiffs' motion is granted in part and denied in part.

         A. Legal Standards

         Rule 37(e) of the Federal Rules of Civil Procedure allows for sanctions for failure to preserve electronically stored information (“ESI”). This rule provides:

If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:
(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or
(2) only upon finding that the party acted with the intent to deprive another party of the information's use in the litigation may:
(A) presume that the lost information was unfavorable to the party;
(B) instruct the jury that it may or must presume the information was unfavorable to the party; or
(C) dismiss the action or enter a default ...

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