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Eddie Bauer’s Data Breach Results in Class Action Lawsuit by Affected Financial Institutions

It seems like every other week another company is in the news for suffering a data breach in which customers’ personal information has been stolen. Besides being sued by its customers and shareholders for the data breaches, companies are now facing lawsuits from affected financial institutions. Just this week, Veridian Credit Union filed a class action lawsuit against Eddie Bauer, LLC for a data breach that occurred between January and July 2016. (Veridian Credit Union v. Eddie Bauer LLC, 2:17-cv-00356 (W.D. Wash)). Veridian has brought claims of negligence, declaratory judgment, and additional state law claims on behalf of itself, as well as similarly situated financial institutions, alleging failure of Eddie Bauer to adequately secure its data networks, including its alleged failure to maintain adequate data security measures, failure to implement best practices, failure to upgrade security systems, and failure to comply with industry standards. Additionally, Veridian alleges that Eddie Bauer made matters worse by failing to notify customers of the breach for at least six weeks. In light of those alleged failures, Verdian contends that it and other financial institutions have been injured by having been forced to cancel or reissue credit cards, refund customers’ losses from unauthorized transactions, respond to increased cardholder complaints, confusion, and concern, and engage in increased fraud monitoring.

This lawsuit serves as yet another reminder of the importance for businesses to properly protect personal data through various procedures and policies. Whether its employee or customer information, businesses need to be on guard and prepared to prevent and handle data breaches. Failure to do so puts a business at risk of being subject to litigation from customers, shareholders, or even financial institutions.

©2020 MICHAEL BEST & FRIEDRICH LLPNational Law Review, Volume VII, Number 69


About this Author

intellectual property, litigator, Albert Bianchi, Michael Best, Madison law firm

A.J. focuses his litigation practice on intellectual property and federal court matters, including disputes over evolving patent, trademark and copyright infringement, contract disputes, and class actions. He also litigates cases in Wisconsin, Illinois, and Minnesota state courts, with his past experience including jury trials in both Wisconsin and Minnesota.

Michelle L. Dama, Attorney, Litigation, Michael Best Law Firm

Corporate clients turn to Michelle for her experience litigating commercial and intellectual property disputes, among other matters. Michelle also serves as a member of the firm’s Class Action/Multidistrict Litigation team. She tries cases in both federal and state courts at  the trial and appellate levels.

Michelle assists a diverse group of clients, many of them long-standing, in the following areas:

  • Complex commercial disputes
  • Intellectual property and trademark litigation
  • Product liability actions
  • Consumer law, including:
    • Telecommunications Consumer Protection Act (TCPA) of 1991
    • Fair Debt Collection Practices Act (FDCPA)
    • Fair Credit Reporting Act (FCRA)
Adrienne Ehrhardt, Michael Best Law Firm, Corporate and Transactional Attorney

Known for giving practical and actionable legal advice, Adrienne counsels clients on the many complex aspects of privacy and data management matters.

Her extensive background includes experience with issues relating to the Gramm-Leach-Bliley Act (GLBA), Fair Credit Reporting Act (FCRA), and the Telephone Consumer Protection Act (TCPA), as well as privacy programs and cyber security issues.

Prior to joining Michael Best, Adrienne served as the in-house lead attorney in privacy and data protection at CUNA Mutual...