Colonial Pipeline Says It Has No Obligation To Reimburse Consumers After Ransomware Attack

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Colonial Pipeline Ransomware Class Action Lawsuit Overview: 

• Who: Colonial Pipeline Company asked a federal judge to dismiss a class action lawsuit lodged by consumers.
• Why: Colonial claims it has no obligation to reimburse consumers who had to pay more for gas in the wake of a ransomware attack that forced it to temporarily shut down its pipeline. 
• Where: The class action lawsuit is pending in Georgia federal court.

Colonial Pipeline Company is asking a judge to throw out a class action lawsuit lodged against it in response to a ransomware attack that led it to temporarily shut down operations earlier this year. 

The plaintiffs allege the May attack, which caused Colonial to have to shut down its pipeline, occurred because of relaxed cybersecurity procedures put in place by the company, and argued it was unfair they were forced to pay more for gas because of it. 

Colonial Pipeline Ransomware Attack 

The attack was perpetrated by a Russian hacking group which demanded a ransom after it allegedly gained access into Colonial’s systems. Colonial ultimately paid the hackers $4.4 million to end the assault, in addition to shutting down the pipeline serving vast swaths of the Eastern Seaboard for a time. 

Colonial told the federal judge that it has no relationship with consumers. The pipeline company argued that it is protected by federal law and should not be held liable for the allegedly higher prices they had to pay at the pump. 

Additionally, the Colonial Pipeline Company says the premise of plaintiffs argument is based on false assertions, including that it is a public utility and that it has a duty to keep its pipelines running. 

“As a matter of federal law, Colonial is not required to keep the pipeline running,” says Colonial, in its motion to dismiss. “In fact, federal law expressly permits Colonial to shut down the pipeline for any reason.”

Colonial claims it has no obligation to consumers seeking to recover economic losses and any state law ruling it is required to keep its pipeline running is in contradiction to and preempted by federal law. 

Colonial alleges its assertions are also validated by The Restatement (Third) of Torts, which says there is “no general duty to avoid the unintentional infliction of economic loss on another.” 

“Claims of the type asserted here would have severe negative consequences not just for Colonial, but for all companies and individuals,” the company said. 

The Colonial Pipeline runs about 5,500 miles and supplies a considerable amount of the gas, jet fuel, and diesel that gets distributed across the east coast of the United States. 

The pipeline was fully restarted on May 12, 2021, six days after the Colonial Pipeline ransomware attack initially occurred. An emergency declaration to keep fuel supplies open for 17 states and Washington D.C. was declared by the Federal Motor Carrier Safety Administration on May 9. 

Do you think Colonial Pipeline Company is liable for the higher gas prices consumers were forced to pay on account of the ransomware attack? Let us know in the comments! 

The plaintiff is represented by James Evangelista of Evangelista Worley LLC and Harper Segui, Daniel Bryson, Rachel Soffin, Gregory F. Coleman, Jennifer Kraus Czeisler, and Blake Yagman of Milberg Coleman Bryson Phillips Grossman PLLC. 

The Colonial Pipeline Ransomware Class Action Lawsuit is Dickerson v. CDPQ Colonial Partners LP et al., Case No. 1:21-cv-02098, in the U.S. District Court for the Northern District of Georgia.

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