A class action lawsuit filed against State Farm accusing the insurance company of a data breach that allowed 40 million customer records to be stolen has been moved to federal court.
Florida residents Malcom Scott and his wife Helen Probst Scott filed the lawsuit in McLean County court on Sept. 13, based on claims that personal data maintained by State Farm was accessed by two hacking groups during an August data breach. The lawsuit alleges the Bloomington-based insurer had not notified customers of the breach as of the September court filing.
“State Farm could have prevented the data breach by properly vetting and monitoring its systems,” states the complaint filed by a Minneapolis law firm. The lawsuit, filed on behalf of all policyholders impacted by the data breach, accuses State Farm of negligence, invasion of privacy, violation of the Illinois Uniform Deceptive Trade Practices Act and breach of fiduciary duty.
State Farm sought removal of the lawsuit to U.S. District Court for the Central District of Illinois in Peoria, a request granted by McLean County judge Rebecca Foley.
“State Farm denies the allegations in the complaint, which are factually and legally baseless,” the company said in its filing seeking transfer of the case.
State Farm maintains the class action lawsuit qualified for transfer from state to federal court for several reasons, including the fact that potential damages total more than $5 million. Even if each class member with a single policy received $1 in damages, State Farm could be liable for more than $50 million, based on the number of policies in force in September, the company argued.
The firm contends the lawsuit also met a “minimal diversity” criteria for transfer to federal court because the Scotts reside in Florida and State Farm is based in Illinois.
In their initial complaint, attorneys for class action members said McLean County court was the proper venue for the lawsuit because State Farm maintains offices in McLean County, where “a substantial part of the events and omissions” related to the claims occurred.
Among the personal data routinely collected by State Farm is consumers’ addresses, phone numbers, Social Security numbers, driver’s license numbers, bank and credit card information and health insurance data, the plaintiffs allege in the lawsuit.
Lawyers for the Scotts did not respond to a request for comment on the transfer.
