A $19,375,000 settlement has been proposed to resolve a consolidated class action lawsuit against the electronic health records and practice management software provider NextGen Healthcare over a 2023 ransomware attack that affected more than one million individuals.
The attack was detected on April 28, 2023, and the first complaint was filed on May 5, 2023, in the United States District Court for the Northern District of Georgia, Atlanta Division. Thereafter, more than a dozen further lawsuits were filed, which were consolidated into a single action in the same court. The consolidated lawsuit alleged negligence and negligence per se for failing to implement appropriate safeguards to protect sensitive patient information, invasion of privacy/intrusion upon seclusion, breach of implied contract, breach of bailment, breach of fiduciary duty, unjust enrichment, and breach notification failures, in violation of federal and state laws, including the Official Code of Georgia Annotated (O.C.G.A).
NextGen Healthcare denies all claims and contentions in the lawsuit and maintains there was no wrongdoing or liability. NextGen Healthcare moved to have the lawsuit dismissed; however, the lawsuit was allowed to proceed (see below). Following mediation on June 25, 2025, and August 6, 2025, and after all parties considered the expense and length of proceedings to continue with the litigation, and the risks associated with doing so, the decision was taken to settle the lawsuit.
Under the terms of the settlement, NextGen Healthcare has agreed to establish a $19,375,000 settlement fund to cover attorneys’ fees and expenses, notice costs, settlement administration costs, service awards, and benefits for class members. Class members may submit a claim for documented, unreimbursed losses due to the data breach up to a maximum of $7,500 per class member and up to $250 for lost time (a maximum of 10 hours at $25 per hour). Alternatively, class members may choose to receive a cash payment, which is expected to be $50, but will be subject to a pro rata adjustment. Class members who were residents of California at the time of the data breach may claim an alternative cash payment of $150.
In addition to the above benefits, class members may also claim three years of credit monitoring and identity theft protection services, and should there be any funds remaining in the settlement fund, they will be used to extend the identity and credit monitoring services or will be distributed cy pres to a non-profit cybersecurity organization. The settlement now awaits approval from the court.
August 6, 2024: NextGen Class Action Data Breach Lawsuit Allowed to Proceed
A class action lawsuit against the electronic health record (EHR) and practice management software provider, NextGen Healthcare, over a 2023 ransomware attack has been allowed to proceed.
Hackers had access to NextGen’s computer systems from March 29, 2023, to April 14, 2023, during which time they exfiltrated a huge volume of sensitive data from the NextGen Office system. The data breach was reported to the Maine Attorney General on May 5, 2023, as affecting 1,049,375 individuals. The ransomware attack was the second to be experienced by NextGen in just a few months, with an earlier Blackcat ransomware attack occurring in January 2023.
It is not uncommon for multiple ransomware attacks to be experienced. A recent report from the cybersecurity firm Semperis suggests that three-quarters of companies that have experienced a ransomware attack were attacked multiple times. Threat actors often deploy malware in their attacks, which allows them to conduct further attacks weeks or months later.
More than a dozen lawsuits were filed against NextGen following the data breach. The plaintiffs sought compensatory, statutory, and punitive damages, additional credit monitoring services, and injunctive relief, requiring NextGen to implement additional security measures to ensure the privacy and security of the data it stores. The lawsuits were consolidated into a single lawsuit – Damon X. Miller v. NextGen Healthcare Inc. – in the U.S. District Court for the Northern District of Georgia.
The consolidated lawsuit alleges NextGen could have prevented the data breach if it had implemented reasonable and appropriate security measures, yet failed to do so, even though it had experienced a ransomware attack in January 2023. The consolidated lawsuit asserted 25 claims, including negligence, unjust enrichment, intrusion upon seclusion, breach of implied contract, breach of bailment, breach of fiduciary duty, and violations of multiple state laws in California, Georgia, Illinois, Iowa, Maine, New Jersey, New Mexico, New York, and Pennsylvania.
NextGen attempted to have 22 of the 25 claims dismissed for failure to state a claim. Most of the claims were dismissed in their entirety by U.S. District Judge Thomas Thrash; however, the motion to dismiss five counts was denied, which gives the plaintiffs the green light to proceed with the action. The motion to dismiss the counts of breach of fiduciary duty, litigation expenses, violation of the Georgia Uniform Deceptive Trade Practice Act (GUDTPA), and violation of the California Consumer Privacy Act (CCPA) was denied in entirety, and the motion to dismiss the count of violation of the California Unfair Competition Law (UCL) was denied with respect to one of the plaintiffs and a putative subclass.
NextGen had argued that, as a service provider to healthcare organizations, it did not owe a fiduciary duty to the plaintiffs, as it had no direct relationship with them and the mere receipt and storage of confidential data does not create a fiduciary relationship. Judge Thrash disagreed, as in some circumstances, the retention of private information that patients provided while seeking medical care can create a fiduciary duty under Georgia law. In his ruling, Judge Thrash did not state whether the circumstances in the case rose to that level, as that was not a question that could be resolved through a motion to dismiss.
Judge Thrash ruled that the plaintiffs had plausibly stated a claim for litigation expenses premised on bad faith, and the motion to dismiss the GUDTPA claim was denied as NextGen’s argument was dependent on “a strained reading of an unadopted Report and Recommendation.” The CCPA claim was allowed to proceed, as while NextGen argued that it is a service provider under CCPA, the plaintiffs stated otherwise, and Judge Thrash accepted those allegations as true, at least at this stage of the litigation. The motion to dismiss the California Unfair Competition Law claim was denied, as the defendant was alleged to have accepted payment to securely keep data and failed to take reasonable security measures, and that is sufficient to state a claim for restitution under UCL.
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