Steven Cohen  |  August 1, 2019

Category: Data Breach

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blue cross blue shieldA $32 million settlement agreement between Premera Blue Cross and customers has been preliminarily approved by an Oregon federal judge to resolve class action claims regarding a data breach that affected approximately 11 million customers.

The Premera class action settlement agreement states that no less than $10 million of the settlement will be delegated to Class Members.

The judge’s opinion states that the $10 million includes up to $10,000 for each Class Member for “reimbursement of proven out-of-pocket damages that can plausibly be traced to the Data Breach, including up to 20 hours of personal time at $20 per hour.”

In addition, the judge notes that each Class Member who does not have out-of-pocket expenses that can be connected to the data breach will receive $50.

Also, those who lived in California as of Mar. 17, 2015 will receive an extra $50 under California’s Confidentiality of Medical Information Act (“CIMA”). Last, Class Members will receive two years of credit monitoring and insurance services.

“Up to $3,500,000 will be set aside for the wholesale purchase of this insurance,” the judge’s opinion states.  

In addition to the $32 million in damages that Premera will pay directly to the settlement, the Premera data breach class action settlement opinion states that the healthcare company will pay $42 million to improve security between 2019 and 2022.

“Improved data security benefits all Class Members, even if they are no longer insured by Premera or a related Blue Cross entity, because Sensitive Information remains stored on Premera’s servers […] If Premera has improved data security, it will decrease the chance of a future data breach and future harm to Class Members from such a breach.”

The judge’s opinion notes that Premera allegedly knew that it could be the target of a data hack.  The opinion shows that Premera hired outside companies to perform audits on its internal security systems.  In addition, the healthcare company performed internal audits and was the subject of another audit by the U.S. Office of Personnel Management (OPM). Despite the security risks, Premera reportedly failed to invest in their cyber security.

“From 2007 through 2014, Premera invested well below the healthcare industry average in security, when analyzed as a percentage of IT spending. IT management personnel would request funding for security-related items, which ‘often’ would be denied, or would be funded significantly below the requested amount,” the judge’s opinion states.

After the data breach, numerous lawsuits were filed and were later consolidated.  The judge’s opinion states that in the Premera data breach class action that followed, which lasted more than four years, the parties have exchanged over 1.5 million documents, have collectively taken over 50 depositions, which includes eight expert depositions.

The Premera class action opinion states, “The Settlement seeks to resolve four factually related causes of action: nationwide consumer protection act claims (CPA), nationwide negligence claims, nationwide breach of contract claims, and claims under California’s Confidentiality of Medical Information Act (CMIA).”

Also, according to the judge’s opinion, the plaintiffs argue that Washington law should apply to nationwide class and that California law should apply to the CMIA claims.

Settlement Class Members in the Premera class action settlement are defined as “All persons in the United States whose Personal Information was stored on Premera’s computer network systems that was compromised in the Security Incident as publicly disclosed on [Mar. 17, 2015].”

The plaintiffs are represented by Kim D. Stephens, Christopher I. Brain and Jason T. Dennett of Tousley Brain Stephens PLLC; Keith S. Dubanevich and Yoona Park of Stoll Berne; Tina Wolfson of Ahdoot & Wolfson PC; James Pizzirusso of Hausfeld LLP; and Karen Hanson Riebel and Kate M. Baxter-Kauf of Lockridge Grindal Nauen PLLP.

The Premera Data Breach Class Action is In re: Premera Blue Cross Customer Data Security Breach Litigation, Case No. 3:15-md-2633, in the U.S. District Court for the District of Oregon.

UPDATE: September 2019, the Premera data breach class action settlement website is now active. Click here to learn more.

UPDATE 2: September 2019, the Premera Blue Cross data breach class action settlement is now open. Click here to file a claim.

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19 thoughts onPremera Blue Cross Class Action Reaches $32M Deal

  1. Victor Lovemore Maposa says:

    Add me, I have been officially notified.

  2. walid gohar says:

    add me

  3. Diane Uhrich says:

    I am eligible for credit monitoring and insurance services per the Premera Blue Cross security incident. What credit reporting agency will this be through?

  4. Stacy haden says:

    Please add me

  5. Mary Ann Eaves says:

    Add me please !

  6. Rudy Chavez says:

    Add me

  7. Barbara Cliff says:

    Please add me

  8. Talitha Hoffler says:

    Add me

  9. Davd Níelson says:

    Please add me

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