Judge Rules That Users Can Sue Yahoo (Verizon) for Hacks

Judge Rules That Users Can Sue Yahoo (Verizon) for Hacks

In a 48-page decision published last Friday, Koh said that the arguments raised in Yahoo's motion to dismiss - such as criticising users for not reading its privacy policy and for continuing to use Yahoo Mail after the attacks - were "unpersuasive".

Yahoo reached an $80 million settlement this month with investors over claims that executives concealed the data breaches to artificially inflate share prices.

Verizon Communications Inc. bought Yahoo's online businesses, which includes its email service, sports and finance new sites for US$4.5 billion in 2017 to combine it with its AOL Inc. operation.

A federal judge has ruled that most of a lawsuit concerning Yahoo's data breach, which exposed the personal information of all of its 3 billion users, can proceed.

Pending litigation against Equifax in Atlanta over claims that its negligence allowed hackers to steal sensitive credit data from nearly half the US population is expected to extend the largest amount for a consumer recovery. The company has been accused of dragging its feet in revealing the data breaches.

Yahoo customers contend that as a result of the lax security, their data has been used to steal money from bank accounts, create credit problems and resulted in fraudulent tax filings.

While Koh dismissed some claims, the judge denied the dismissal of "many" others, including one for negligence and another for breach of contract. An amended complaint from plaintiffs came after Yahoo raised its estimates over the extent of compromised accounts.

She also said the plaintiffs could try to show that liability limits in Yahoo's terms of service were "unconscionable", given the allegations that Yahoo knew its security was deficient but did little.

Koh said customers may have "taken measures to protect themselves" against identity theft and fraud had they known about the breaches sooner.

The judge agreed to dismiss claims of violations of California's unfair competition law, but upheld the claim of another plaintiff who had paid for Yahoo's premium email service.