June 7 (Reuters) - A federal panel on Friday centralized
49 lawsuits accusing UnitedHealth Group's ( UNH ) Change Healthcare
payment processing unit of failing to protect personal data from
February's cyber attack in Minnesota.
The federal Judicial Panel on Multidistrict Litigation said
in an order on Friday that Minnesota, where UnitedHealth ( UNH ) is
based and where several cases are already pending, is the most
logical venue. Of the lawsuits, 19 were brought on behalf of
individual consumers whose data was allegedly compromised, and
30 by healthcare providers who say they were unable to get paid
for their services when Change's system was locked down after
the attack.
Change processes about half of the medical claims in the
United States. An American Hospital Association survey found
that 94% of hospitals reported damage to their cash flow as a
result of the attack.
The lawsuits accuse the company of negligence and are
seeking damages to compensate providers for their losses and
consumers for the cost of credit monitoring and potential
identity theft.
Change had sought to have the cases centralized in
Tennessee, where it is based. Some plaintiffs had proposed
keeping consumer cases in Tennessee and provider cases in
Minnesota, but the panel on Friday said the factual and legal
issues would be largely the same for both kinds of cases.
The panel assigned the cases to U.S. District Judge Donovan
Frank, a veteran judge appointed to the court in 1998.
Change and UnitedHealth ( UNH ) did not immediately respond to
requests for comment.
The attack is believed to have been carried out by the
ransomware hacker group BlackCat. UnitedHealth ( UNH ) disclosed the
intrusion on Feb. 21 but did not indicate then how many people
were affected.
Change said in an April court filing that the lawsuits are
"based on the incorrect and unfounded theory that, because a
cyberattack occurred, Change's security must have been
deficient, and plaintiffs must have been harmed."
The case is In Re Change Healthcare Inc Customer Data
Security Breach Litigation, U.S. District Court for the District
of Minnesota, No. 24-md-03108.
For plaintiffs: Gerard Stranch of Stranch, Jennings &
Garvey; Joseph Guglielmo of Scott & Scott; Gary Klinger of
Milberg Coleman Bryson Phillips Grossman and others
For Change and UnitedHealthcare: Allison Ryan of Hogan
Lovells and others
Read more:
Change Healthcare wants data-breach lawsuits heard in
Nashville federal court
Almost all US hospitals took financial hit from Change hack,
AHA says