Seagate Agrees to Settle Data Breach Class Action Lawsuit

Seagate Technology LLC has agreed to settle a class action lawsuit alleging the company was duped by a phishing scam leading to a massive data breach in 2016 that exposed employees’ sensitive financial data.

Lead plaintiffs claimed in their class action lawsuit that a Seagate employee fell for an email phishing scam and sent 10,000 W-2 forms to an unknown third party. The complaint alleged that personal information was immediately used to file fraudulent tax returns in the name of Seagate employees.

According to settlement documents, Seagate will provide each employee and family member affected by the data breach two years of identity theft protection and up to $3,500 to reimburse any costs associated with the breach. The Class is estimated to include about 12,000 Seagate employees and their family members.

The identity theft protection services are valued at $5.75 million, while “Seagate’s ‘backstop’ protection offers potential coverage of more than $42 million to protect a class estimated at 12,000 individuals.” Class Members include both employees whose financial information was compromised in the phishing scam as well as the family members of the employees.

“Seagate asserted defenses based on the procedures it had in place to protect settlement class members’ [personally identifiable information] and its compliance with any contractual obligations that Seagate may have had,” notes the class action plaintiffs’ motion to approve the settlement proposal. “In light of the monetary relief and data security protections under the settlement — especially when weighed against the risk of continued litigation — the agreement here is certainly not ‘obviously deficient.’”

Seagate has also agreed to step up employee training to identify and avoid phishing and other hacking schemes; however, Seagate does not admit any liability in falling for the scam and says that there was no way the company could have known about the phishing email that led to the breach.

“The settlement provides an extraordinary result for the Settlement Class members,” notes the class action plaintiffs’ motion to approve the proposed settlement. “Indeed, it is unlikely that Plaintiffs could have obtained more for the class had they prevailed at trial.”

The tech company had tried to dismiss the class action lawsuit, arguing that there was no proven connection between the fraudulent tax returns filed on behalf of its employees and the data lost to the phishing scam. The company also argued that there were other methods hackers could have used to obtain employees’ financial information.

Further, said Seagate, their employee contracts don’t include an obligation for the company to protect the sensitive information it obtains from employees.

In response, the class action plaintiffs pointed out that the fraudulent returns had been filed shortly after Seagate fell for the phishing scam. A California federal judge dismissed Seagate’s arguments and allowed the class action to proceed.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

The plaintiffs are represented by David J. Stone of Bragar Eagel & Squire PC, Marc L. Godino and Mark S. Greenstone of Glancy Prongay & Murray LLP, Jeremiah Frei­Pearson of Finkelstein, Blankinship, Frei­Pearson & Garber LLP, and Eric A. Grover of Keller Grover LLP.

The Seagate Employee Data Breach Class Action Lawsuit is Everett Castillo, et al. v. Seagate Technology LLC, Case No. 3:16-cv-01958, in the U.S. District Court for the Northern District of California.

UPDATE: On Oct. 19, 2017, a federal judge granted preliminary approval of the Seagate data breach class action settlement.

UPDATE 2: April 2018, the Seagate data breach class action settlement is now open. Click here to file a claim.