The Seattle, Washington-based surgical group, Proliance Surgeons, has agreed to a settlement to resolve class action litigation over a February 2023 cyberattack and data breach.
Hackers gained access to the surgical group’s network on February 11, 2023, and exfiltrated files containing patient information. Notification letters were mailed to the 437,392 affected individuals in November 2023. Shortly thereafter, class action lawsuits started to be filed. The HIPAA Journal reported on one of those lawsuits in December 2023 (see below). That lawsuit was one of eleven class action complaints filed by victims of the data breach. Due to overlapping claims, and to conserve resources, the lawsuits were consolidated into a single complaint – In re: Proliance Surgeons Data Breach Litigation – in the Superior Court of the State of Washington in and for King County.
The consolidated lawsuit alleged that Proliance Surgeons failed to implement the necessary safeguards to protect private personal and protected health information on its network and as a direct consequence of that failure, hackers were able to obtain unauthorized access to patient data such as names, Social Security numbers, dates of birth, telephone numbers, medical information, diagnosis and treatment information, health insurance information, and medical record numbers. The lawsuit also took issue with the length of time it took to issue notification letters to the affected individuals, who received notification letters more than 280 days after the data breach was discovered.
While Proliance Surgeons offered the affected individuals a complimentary 12-month membership to a credit monitoring service, the plaintiffs claimed the offer was woefully inadequate, and that the data breach had “caused irreparable harm to their personal, financial, reputational, and future well-being.” The lawsuit asserted claims for negligence, breach of implied contract, unjust enrichment, and a violation of the Washington Consumer Protection Act.
The defendant denied and continues to deny all allegations in the litigation, all charges of wrongdoing or liability, and claims that the plaintiffs and class members suffered any cognizable damage or harm as a result of the incident. However, despite that position, the decision was taken to settle the litigation to avoid the uncertainty, risk, expense, and burden involved with defending the litigation. Class counsel and the class representatives believe that the negotiated settlement is fair and in the best interests of the class members.
Under the terms of the settlement, Proliance Surgeons has agreed to establish a $4,450,000 common settlement fund to cover benefits to the class members, after attorneys’ fees and expenses, settlement administration and notice costs, and service awards for the class representatives have been deducted. Class members may claim a two-year membership to the CyEx Medical Shield Complete medical information protection and monitoring service. Class members who have experienced out-of-pocket losses due to the incident may submit a claim for reimbursement of documented, unreimbursed losses. Claims for reimbursement have been capped at $5,000 per class member.
Regardless of whether a claim is submitted for reimbursement of losses, a pro rata cash payment of up to $599 may be claimed. The cash payments will depend on the number of individuals electing to receive credit monitoring services, cash payments, and reimbursement of losses. The cash payments may be substantially lower than the $599 maximum. The deadline for exclusion from the settlement and objection is April 28, 2026. Claims must be submitted by May 28, 2026, and the final fairness hearing has been scheduled for June 26, 2026.
December 5, 2023: Proliance Surgeons Sued Over Ransomware Attack and Data Breach
A class action lawsuit has been filed against Proliance Surgeons, a Seattle, Washington-based surgery group, over a recently disclosed ransomware attack and data breach that has affected almost 437,400 individuals.
The group operates around 100 surgery centers in the state and treats more than 800,000 patients each year. On May 24, 2023, a third-party forensic investigation into a cyberattack confirmed that hackers had access to files containing patient data and that they had removed “a limited number of files” from its network on February 11, 2023. The data compromised in the attack included names, contact information, Social Security numbers, financial information, treatment information, driver’s license numbers, and usernames and passwords. Notifications were issued on November 21, 2023.
A lawsuit has been filed in federal court in Seattle by plaintiff and former patient, Alicia Berend, and similarly situated individuals whose sensitive information was compromised in the cyberattack. The lawsuit alleges Proliance Surgeons failed to adequately protect patient data as required by federal and state law and in accordance with its internal security policies, and that the data security failures constituted a violation of the Health Insurance Portability and Accountability Act (HIPAA).
The lawsuit also references an earlier security breach where unauthorized individuals had access to its online payment system for seven months between November 2019 and June 2020, allowing access to names, zip codes, and payment card information. Following that incident, Proliance Surgeons said it would be enhancing its security measures to prevent similar incidents in the future. The earlier security breach is not shown on the HHS’ Office for Civil Rights (OCR) website, which indicates either the breach was not reported to OCR, that Proliance Surgeons determined protected health information had not been compromised, or the breach affected fewer than 500 individuals. The lawsuit claims that two major security breaches in a little over 3 years demonstrate a pattern of negligence with respect to data security.
The lawsuit also takes issue with the length of time taken to discover that patient data was involved, which occurred 102 days after the security breach was detected, and Proliance Surgeons then failed to issue notification letters to the affected individuals until November 21, 2023 – 283 days after the data breach occurred. The lawsuit claims that the plaintiff and class were kept in the dark about the breach, thus depriving them of the opportunity to mitigate their injuries in a timely manner.
The lawsuit claims the plaintiff and class have suffered widespread injury and monetary damages, and that the plaintiff has already suffered from identity theft and fraud. She has received emails indicating someone has used her identity for various out-of-state activities, including inquiries into properties in Florida, and has also received an increased number of spam messages and phone calls, and now fears for her personal and financial security. The plaintiff claims that she has suffered anxiety, sleep disruption, stress, fear, and frustration, and that these injuries go far beyond mere worry or inconvenience.
The lawsuit alleges negligence, breach of implied contract, breach of fiduciary duty, invasion of privacy, unjust enrichment, and violations of the Washington Consumer Protection Act, Washington Data Breach Disclosure Law, and Washington Uniform Health Care Information Act (UHCIA). The lawsuit seeks class action certification, a jury trial, compensatory, exemplary, punitive, and statutory damages, and attorneys’ fees and legal costs. The plaintiff and class are represented by Samuel J. Strauss of the law firm, Turke & Strauss LLP.
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