Canada’s Lone Yahoo Data Breach Suit Moving Slowly

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By Jeremy Hainsworth

Nov. 25 — Yahoo! Inc. doesn’t have to respond immediately to a putative class action suit in British Columbia over the revelation that personal information associated with at least 500 million accounts was stolen in a 2014 data breach, the complainant’s lawyer told Bloomberg BNA.

It is unclear what impact the slow moving Canadian litigation may have on Verizon Communications Inc.'s pending takeover of Yahoo. More concerning to the companies may be that consumers have filed 18 U.S. federal court class action complaints against Yahoo that are awaiting consolidation action by the Judicial Panel on Multidistrict Litigation.

According to the notice of civil claim, the Canadian defendant must respond within 21 days while a U.S. defendant must respond within 35 days.

However, plaintiff Jagdeep Gill’s lawyer, K.S. Garchan, told Bloomberg BNA Nov. 22 that informal agreements between counsel mean that a defendant doesn’t need to file a defense until such time the court certifies the proposed class action.

The complaint, filed Sept. 26 in the Supreme Court of British Columbia, asserted negligence, breach of privacy, breach of fiduciary duty, breach of contract and negligent misrepresentation Gill v. Yahoo! Canada Co. & Yahoo! Inc., No. S-168873, complaint filed 9/26/16 .

The Gill suit is currently the only one in Canada, over the alleged data breach.

Garchan said no hearing dates have been set. “It’s the way the practice has developed,” he said. full pleadings would be made at the time of certification or after, he said.

No Reasonable Security

Yahoo announced Sept. 22 that the personal information of at least 500 million users was stolen in the attack, exposing a wide swath of its roughly 1 billion users ahead of Verizon Communications Inc.’s planned acquisition of the web portal’s assets.

Gill’s lawsuit asserted Yahoo “acted with reckless disregard for the security of its users’ personal and/or financial information that it promised to protect and failed to implement reasonable security measures to protect its users’ sensitive personal and/or financial information, despite it being the target of data breaches in the past.”

The suit said that Yahoo advised users to put security freezes on credit accounts. It argued that users should be compensated for each freeze but said that Yahoo has offered no compensation.

With Gill as representative claimant, the suit is brought on behalf of all British Columbia residents “who were or are account holders of the defendant.”

Yahoo is the tenth largest Internet media company in the world with a $39.22 billion market capitalization, Bloomberg data show.

The media relations unit at the company’s Sunnyvale, Calif. Headquarters didn’t respond to Bloomberg BNA requests for comment. Barbara Wahl, a Vancouver lawyer listed in the suit as Yahoo!’s Canadian attorney, also didn’t respond to Bloomberg BNA’s requests for comment.

To contact the reporter on this story: Jeremy Hainsworth in Vancouver at correspondents@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

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