Samsung Wants Data Breach Class Actions Transferred to Las Vegas

Samsung wants the 13 class actions stemming from its summertime data breach transferred to and consolidated in the U.S. District Court for Nevada in Las Vegas, or alternatively the Southern District for New York in Manhattan, the company told the U.S. Judicial Panel on Multidistrict Litigation (JPML) in a response Wednesday (case number 3005). The plaintiffs are evenly split into camps that want the cases moved to the Northern California district in San Francisco or the New Jersey district in Newark.

The filing broke Samsung’s nearly two months of public silence as the class actions piled up in six U.S. jurisdictions. It suggested strongly that Samsung would base its defenses on motions to compel arbitration. All the class actions “arise out of the same principal allegation,” said the company -- that Samsung “failed to sufficiently protect the information compromised” in the data breach, referred to by Samsung as the “Security Incident.” All the lawsuits “seek the same relief, from the same defendant, on behalf of the same customers, to redress the same alleged harms, based on the same underlying set of facts,” it said.

Samsung offered no affirmative defenses in its filing. “Samsung’s response should not be construed as a waiver of any defenses to the Related Actions, including personal jurisdiction and improper forum because the Plaintiff(s) in the underlying actions agreed to arbitrate their dispute with Samsung,” said a footnote. Samsung’s online statement of terms and conditions, posted September 2021, says that all disputes with Samsung “arising in any way from these terms shall be resolved exclusively through final and binding arbitration, and not by a court or jury.”

Amid the “substantial volume” of cases already filed, plus the “nationwide scope” of the allegations and the “likelihood” that additional putative class actions will continue to be filed, “no one can reasonably dispute that the federal litigation arising out of the Security Incident should be transferred to a single court for efficient and orderly pretrial proceedings,” said Samsung. The JPML “has consistently ordered transfer and consolidation in litigation arising out of data security incidents,” it said.

Though plaintiffs don't appear to disagree “that conducting coordinated pretrial proceedings in a single court is appropriate here, there are competing views about where those proceedings should occur,” said Samsung (see 2211020008). It disagrees that Northern California or New Jersey is “the most appropriate” forum for transfer, but instead favors the district of Nevada, it said.

Nevada federal court is the most appropriate forum because it’s home to the first-filed action, and is assigned “to an experienced judge who has adjudicated similar cases in a district court with docket conditions that make it uniquely well-suited to handle the consolidated pretrial proceedings in a timely and efficient manner,” said Samsung. It’s also “the most central and convenient of the proposed transferee courts,” it said.

All the complaints raise the same “overarching questions of fact, thus warranting transfer and consolidation,” said Samsung. “No party has opposed consolidation.” Though some of the complaints contain additional factual allegations or distinct causes of action, “those minor differences do not preclude consolidation,” it said. “Enabling a single transferee judge to resolve all pretrial issues, including Rule 12(b) motions, discovery disputes, and potentially class certification issues, will avoid the risk of inconsistent pretrial rulings being issued by different judges,” it said.

Any “informal coordination” of the cases without a JPML order transferring and consolidating them in a single venue “is unlikely to succeed given that Plaintiffs have already begun fragmenting into conflicting camps, even for cases filed in the same court,” said Samsung. Between one “faction” that seeks consolidation in San Francisco and the other in Newark, “Samsung proposes a reasonable middle ground of Nevada,” it said. The rift between two competing camps of plaintiffs “undermines any possibility of consolidation by agreement,” Samsung’s attempts to reach such an agreement “have been unsuccessful,” it said.

Under a traditional “venue analysis,” the first-filed rule “dictates that when multiple cases sharing a substantially similar subject matter are filed in different federal courts, the case that was filed first chronologically should take priority over any subsequently-filed cases,” said Samsung. The first-filed class action, Gelizon v. Samsung, was entered Sept. 2 in the 8th Judicial District Court in Clark County, Nevada, and removed Oct. 10 to Las Vegas federal court (docket 2:22-cv-01706) where it was assigned to U.S. District Judge Andrew Gordon.

The district of Nevada best meets the criteria for “expeditiously resolving complex litigation,” said Samsung. For the 12 months ended March 31, “the median time from filing to disposition of civil cases resolved during or after pretrial proceedings in that court was 9.6 months, the lowest among the other potential transferee courts and nearly half the national average of 18.7 months,” it said. Gordon “is a highly skilled and well-respected jurist who has significant experience managing highly complex actions,” it said.

Plaintiffs’ arguments for transfer to districts other than Nevada “are unpersuasive and should be rejected,” said Samsung. The California movants are “incorrect” that Samsung’s decision-making processes affecting data and privacy stem from its offices in Northern California, it said. It's true that Samsung maintains offices and employees in Northern California, but “those offices and employees have no bearing on the Security Incident,” it said.

The New Jersey movants “primarily argue that the parties, witnesses, and events relating to the Security Incident are located in the District because that is where Samsung is headquartered,” said the company. But they “vastly overstate the importance of the location of witnesses and evidence given today’s technology,” it said. They also “greatly overstate the perceived convenience” of locating multidistrict litigation “near a defendant’s headquarters,” it said.