SAN FRANCISCO – A federal judge dismissed a lawsuit against an investor communications firm that had been sued by plaintiffs after hackers allegedly gained unauthorized access to their business email accounts and exfiltrated the plaintiff’s personal information.
Plaintiffs Phillip Toretto and Daniel C. King sued defendant Mediant Communications Inc. over allegations of negligence, breach of contract and unjust enrichment in U.S. District Court for the Northern District of California in August 2019.
“As a result of Mediant’s failure to protect the information it was entrusted to safeguard, plaintiffs and class members have been exposed to or are at a significant risk of identity theft, financial fraud, and other identity-related fraud into the indefinite future,” wrote plaintiffs' attorney Patricia N. Syverson in her opening brief.
On March 18, U.S. District Judge Edward M. Chen settled the litigation by granting Mediant Communications its motion to dismiss, stating that the court lacks personal jurisdiction.
“Plaintiff Toretto (the California plaintiff) alleges that Mediant received his information from the Blackstone Real Estate Income Trust Inc. However, it appears that Blackstone is headquartered in New York. Similarly, plaintiff King, the New Jersey plaintiff, alleges that Mediant received his information from the Ivy Natural Resources Fund. Ivy Investments is a Missouri company,” Chen wrote in his decision. “Thus, the claims of the California plaintiff have no casual or proximate relationship to Mediant’s indirect contract with California companies.”
Mediant Communications Inc. argued that the allegations were purely conjecture.
“Plaintiffs ask this court to speculate that unknown criminal hackers, of unknown skill and sophistication, hacked into several Mediant email accounts because and only because Mediant’s information security was deficient,” wrote Mediant Communication’s counsel Casie D. Collignon. “This District and the Southern and Central Districts have rejected nearly identically pled complaints because federal pleading standards require more than such speculation.”