Disruptionware VI: Cyber-Attack against Colonial Pipeline Illustrates Continued Vulnerability of American Energy and Infrastructure Targets

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Disruptionware attacks have become increasingly more common over the last few months. Just last month, I wrote about a dangerous disruptionware attack against a Florida Water Treatment Center that could have been a mass casualty event. For more information on these types of attacks, please refer to our posts on different types of disruptionware attacks and how disruptionware attacks work.

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Second Circuit Addresses Critical Issue in Data Breach Class Actions: Article III Standing Based on Allegations of Future Misuse of Personal Data

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On April 26, 2021, the Second Circuit Court of Appeals decided the case of McMorris v. Carlos Lopez & Assocs., No. 19-4310, 2021 WL 1603808 (2d Cir. Apr. 26, 2021) and addressed one of the most critical issues in private data breach class actions – whether victims of a data breach can establish Article III standing by alleging they are at an increased risk of identity theft or fraud, even if their personal data has not yet been misused.

Although the district court’s ruling that plaintiffs did not establish standing was upheld, the Second Circuit found that victims of a data breach can establish standing based on a risk of future identity theft or fraud. The court also put forward a three-factor test to determine if standing exists when misuse of plaintiffs’ data has not yet occurred.

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TikTok Facing Billion-Pound Legal Challenge in Children’s Data Privacy Lawsuit

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TikTok is facing a potential legal claim in the U.K. brought by the former Children’s Commissioner for England, Anne Longfield, on behalf of millions of children in the U.K. and EEA who have used the social media app. Claimants in the action could be entitled to over $1 billion pounds in damages.

This action follows fines issued by the U.S. Federal Trade Commission in 2019 and the Korea Communications Commission in South Korea in 2020 for mishandling children’s data. TikTok has also previously been investigated by the U.K.’s Information Commissioner’s Office, which ordered TikTok in 2019 to delete data associated with a linked app and set up an age verification system for that function.

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The Eleventh Circuit Finds that Potential Future Misuse of Personal Information Does Not Confer Article III Standing in Data Breach Suits

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On February 4, 2021, the Eleventh Circuit Court of Appeals issued a critical opinion addressing Article III standing in private data breach actions, which has been the subject of a closely watched circuit split.

The case, Tsao v Captiva MVP Restaurant Partners LLC, originated in the District Court for the Middle District of Florida where the plaintiff filed a class action complaint against the restaurant chain PDQ in connection with a May 2017 data breach. Following the breach, PDQ posted a notice to customers regarding the breach, explaining that customers’ names, credit card numbers, card expiration dates and CVVs may have been exposed.

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Disruptionware V: Malicious Cyber Actors Attack a Florida Water Treatment Facility

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We have posted four previous articles discussing the foundation and structure of what a disruptionware attack is, how their attack matrix works, possible defenses to disruptionware attacks and industries that are very susceptible to these attacks. Disruptionware has proven over the last year that it is a growing and dangerous cyber threat to our data, our businesses and possibly our lives.

Disruptionware attacks typically involve ransomware and they aim to encrypt and hold the victim’s data hostage. Such attacks are usually financially motivated, and, to date, there have fortunately been only a few known examples where the disruptionware attack has resulted in threats to health and safety or caused loss of life. When such significant collateral damage has occurred, it typically appears to have been inadvertently caused.

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Fifth Circuit Decision Motivates Covered Entities to Appeal Unreasonable Enforcement Outcomes

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The United States Court of Appeals for the Fifth Circuit (the “Court”) vacated a $4,348,000 civil monetary penalty (“CMP”) imposed by the U.S. Department of Health and Human Services’ Office for Civil Rights (“HHS-OCR”) in 2017 against the University of Texas M.D. Anderson Cancer Center (“MD Anderson”) for alleged violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy Rule and HIPAA Security Rule. The Court held that OCR’s actions were “arbitrary, capricious, and otherwise unlawful” and remanded the case for further proceedings. While the case is not binding precedent outside the Fifth Circuit, MD Anderson is the first HIPAA Covered Entity to appeal its fine to a Circuit Court since the HIPAA Privacy Rule and the HIPAA Security Rule took effect. The ruling likely will motivate future HIPAA settlement negotiations with HHS-OCR and encourage HIPAA Covered Entities to appeal enforcement outcomes they consider unreasonable.

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