Gas Stations Seek Compensation After Pipeline Hit by Russian Cybercriminals

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More than 11,000 gas stations were left short on fuel after a major North Carolina pipeline was hacked by Russian cybercriminals — and now, they want compensation for the lost sales, a new class action lawsuit says.

EZ Mart 1 LLC filed the class action lawsuit against Colonial Pipeline in a Georgia federal court Monday, alleging Colonial was negligent in its cybersecurity protections, Law360 reported. 

The North Carolina gas station is seeking to represent a nationwide Class of gas stations that had a fuel shortage due to the ransomware attack on Colonial in May. 

“The five-day shutdown of the pipeline resulted in fuel shortages in areas that the pipeline serviced, affecting more than 11,000 gas stations and causing a sharp increase in the price of gasoline for automobiles and other motor vehicles and a sharp decrease in convenience store sales,” the class action says.

The attack, which was launched by Russia-based cybercriminal gang known as DarkSide, saw Colonial having to temporarily close a major pipeline and pay out more than $4.4 million to the hackers.

The pipeline Colonial closed supplies nearly half the gasoline, diesel and jet fuel used on the U.S. East Coast, Law360 reported.

According to Monday’s class action lawsuit, gas stations that were left short during the attack suffered losses not just in gasoline sales, but also on convenience items.

“Due to the pipeline ransomware attack and attendant fuel shortage, plaintiff EZ Mart’s sales for May ($76,185) fell by $7,789 compared to sales for April ($83,974), even though the EZ Mart is located on a busy thoroughfare outside a popular coastal city and May is the beginning of tourist season,” it says.

In a congressional hearing on the attack earlier this month, Colonial executives admitted DarkSide gained access to its systems by using a stolen username and password. 

They then logged in through a virtual private network that was not protected with two-factor authentication. 

EZ Mart alleges Colonial should have known a cyberattack was a real possibility, but it failed to upgrade its systems, implement two-factor authentication and didn’t work with regulators to ensure security.

The gas station is seeking to recover damages from lost revenues, and an order forcing Colonial to upgrade its security. 

Meanwhile, Colonial is already facing a consumer class action lawsuit over the hack. 

Lax Colonial Pipeline cybersecurity procedures resulted in the ransomware attack that slowed the flow of gas all over the east coast, forcing consumers to pay more at the pump, a class action lawsuit filed in May alleges.

Lead Plaintiff Ramon Dickerson seeks to represent a nationwide Class of consumers who allegedly paid a higher price for gasoline due to shortages caused by the ransomware attack.

Do you think Colonial should have to pay out for gas stations’ lost revenue? Let us know in the comments! 

The plaintiff is represented by Gregory John Bosseler, John A. Yanchunis, and Ryan D. Maxey of Morgan & Morgan PLLC, Joel R. Rhine, Martin Ramey, Janet Coleman, and Ruth Sheehan of Rhine Law Firm PC, Mona Lisa Wallace and John S. Hughes of Wallace and Graham PA, and Alexander M. Hall and John F. Green, II of Hall & Green LLP.

The Colonial Hack Gas Station Losses Class Action Lawsuit is EZ Mart 1, LLC v. Colonial Pipeline Company, Case No. 1:21-cv-02522, in the U.S. District Court for the Northern District of Georgia.

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