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Monday, April 25, 2016

Plaintiffs suing Ashley Madison extramarital-affair Web site in massive data breach will have to use their real names as class-action litigation moves forward

Individuals suing Ashley Madison for failing to secure their personal information at the extramarital-affair Web site will have to proceed without the cloak of anonymity, a federal judge ruled last week. If a plaintiff does not want to use his real name, he will have to drop out of the class-action litigation, which has been consolidated at U.S. District Court in St. Louis, Missouri.

At least one Alabama law firm, Heninger Garrison Davis of Birmingham, is representing a number of plaintiffs in the case. Judge John Ross's ruling essentially dovetails with our reporting on the Ashley Madison (AM) story. We have been revealing the real names of AM customers for several months, focusing on high-level professional elites (lawyers, doctors, CEOs, wealth managers, etc.), who make up a significant percentage of users in Alabama and Missouri, the two states that have been our focus.

To our knowledge, we are the only U.S. Web site to reveal elite users of AM, providing key identifying information--real names; addresses; employers; names of spouses and children; and in some cases, account information (credit-card transactions, amount of money spent, etc.) Most reporting on the AM story has focused on technical, legal, and social issues related to the data breach itself, but we are the only news site--best we can tell--that consistently has provided information about users. We plan to continue that reporting soon, and you can see examples of our investigative work here, here, here, here, here, and here.

The technology news site Ars Technica, now owned by Conde Nast Digital, broke last week's story about the anonymity ruling, From the Ars Technica report:

We all remember last year's hype surrounding the Ashley Madison dating site's data breach. Hackers exposed identifying information about millions of users of the site that has the tagline, "Life is short. Have an affair."

Then came the lawyers smelling blood in the water—filing proposed class-action suits targeting the cheating site's not-so-perfect "Full Delete" option that was supposed to, and didn't, remove all identifying information from the service for a $19 fee per user. Then it surfaced that the site perhaps made phony profiles of women to attract more men to the site.

The massive litigation has been co-mingled in Missouri, and there are some interesting elements at play. For starters, the judge presiding over the case says that if you want to be a named plaintiff in the litigation, you can't use a pseudonym like "John Doe," and instead you have to use your real name. The judge, in agreeing with Ashley Madison's owners, ruled that only in extraordinary circumstances may civil litigation proceed under fake names, like in cases such as sex crimes and suits about juveniles.

Upon what did Judge Ross base his ruling? Ars Technica provides details, and the full ruling can be read at the end of this post:

"The disclosure of Plaintiffs' identities could expose their sensitive personal and financial information—information stolen from Avid when its computer systems were hacked—to public scrutiny and exacerbate the privacy violations underlying their lawsuit," US District Judge John Ross ruled . . .  earlier this month. "At the same time, there is a compelling public interest in open court proceedings, particularly in the context of a class action, where a plaintiff seeks to represent a class of consumers who have a personal stake in the case and a heightened interest in knowing who purports to represent their interests in the litigation." Days ago, a "John Doe" plaintiff removed . . .  himself from the case.

Ross has given unnamed plaintiffs until June 3 to lodge their official class-action complaint and to give them time to decide if they want to be named plaintiffs or dropped out. Another contentious issue is on the table, as Ars Technica describes:

There's also a big wrinkle that could affect the upcoming class-action filing. Attorneys want to use confidential communications between Ashley Madison executives and their attorneys as part of their lawsuit in a bid to establish that the company made fake female profiles to induce people to become one of the site's 39 million members. Obviously, Avid Life Media, the site's operator, is opposed. Plaintiffs' lawyers say the data is not protected by attorney-client privilege and can be part of the case because of the "crime-fraud" exception. That exception means that a client and their attorney's back-and-forth communications are not protected if the communications were made "with the intention of committing or covering up a crime or fraud." The plaintiffs' lawyers noted a story in Gizmodo citing the hacked data in which Avid Life attorneys are discussing "fictitious" profiles on the Ashley Madison site.

Judge Ross has not ruled on the request but is expected to do so before the June 3 filing deadline.


Anonymous said...

I bet this will reduce the size of the plaintiff class considerably.

Anonymous said...

The trial lawyers hoping to make a killing off this must really be pissed.

Anonymous said...

The lawyers still will make money; it's the plaintiffs who will come up mostly, or totally, empthy handed. Class actions are all about making money for attorneys.

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Anonymous said...

I agree with @1:06.

Class actions are all about the attorneys. A typical member of the class may make a few hundred dollars, but if the class is big enough the attorney will make millions. The class action mechanism is intended to allow the aggregation of small claims that would normally not be filed because they are too small individually. In practice, this usually works only to benefit the lawyers. These Ashley Madison users are not likely to get anything from these class action cases anyway. This is only about the lawyers.

For example, say a car dealer charges an illegal $10.00 fee to run credit applications. Nobody will sue to recover $10.00. But if you are a member of a class action, you may get some of that money back. The class action lawyer would file the claim and negotiate a settlement. Let's say the settlement is for a $5.00 refund of each illegal $10.00 fee. The lawyer will get 40% of the recovery, so you get $3.00 and the lawyer gets $2.00. When the dust settles, you have $3.00 in your pocket. How much does the lawyer have? That depends on the size of the class. Let's say this class has 10,000 people. The lawyer then gets $20,000 and each client gets $3.00. How nice for the lawyer.

Anonymous said...

I think the judge got it right on this ruling. Seems the plaintiffs are wanting to have their cake and eat it, too. They were dumb enough to sign up with A. Madison in the first place, now they are pissed that their info got hacked, but they want to remain anonymous while they go after the company. They come across as spoiled brats, and the judge isn't having it. Good for him.

Anonymous said...

This should be fascinating. Now, we will find out which Ashley Madison customers have the balls to stand up and sue under his real name.

Robby Scott Hill said...

Roger, your going to jail started something. Ever since you were jailed, cops like Spencer Collier began to defy the system. State Judges began to rule against the powers that be at the State Bar. Sister Blackmon is not running for re-election to the bench in Florida because the Phenix City branch of the Dixie Mafia that placed her & Leura Canary in power has become embroiled in internal disputes due to your reporting. If I didn't like you so much, I wish you would go to prison! We need to finish what you started.