StockX Data Breach

In early 2019, the personal records of more than 31 million people were exposed as a result of alleged data breaches. Most of those breaches targeted medical and healthcare organizations, but consumer products companies were not immune from attacks. As the second half of the year unfolded popular sneaker and fashion trading platform StockX, verified that it had been targeted by hackers. Sources report that more than 6.8 million customer records might have been exposed in the StockX data breach. Shortly after the breach, an individual whose data had been compromised filed a class action lawsuit against StockX.

Stages of a Class Action Lawsuit

No two class action lawsuits are alike, but they do reflect some common elements. The StockX lawsuit, for example, will likely include some aspect of four distinct phases:

1. Class Certification

Rule 23(a) and (b) of the Federal Rules of Civil Procedure provides the requirements and structure for gaining class certification. In simple terms, the class must be large enough that moving forward as individuals would be impracticable, and there are common questions of law or fact brought by the entire group.

Plaintiff’s counsel should be prepared to provide a definition and potential size of the class, the ability to ascertain class data, and common questions of law or fact, in addition to the more specific prerequisites provided by Rule 23.

The common issues in the StockX lawsuit revolve around the alleged compromising of the claimants’ personal information as a result of the data breach. Counsel for both the claimants and the defense can pave the way for smoother administration of the lawsuit by engaging an experienced data breach class action settlements consultant to help provide guidance to fulfilling the requirements of Rule 23 and other governing guidelines to satisfy due process.

2. Class Member Notification

Once a class is certified by the Court, class members must be notified of their rights. In the case of StockX, this means providing the estimated 6.8 million customers and clients whose personal information was potentially exposed.

It’s critical in this stage to work with an experienced class action notice media expert to form a notice plan that reaches class members and satisfies the Court’s requirements. In data breach cases, notice plans are often large-scale and require the use of several mediums, including direct mail and a variety of digital efforts.

3. Establishment of a Qualified Settlement Fund

There are several different ways to set up a class action settlement fund, and the type of fund chosen dictates both distribution and reward. The type of fund, as well as the structure of the settlement agreement, also dictates what happens in the case of unclaimed money.

It’s at this point counsel should also consider what effect tax laws have on the qualified settlement fund and on the class members.

If the parties to the StockX lawsuit settle the case before it goes to trial, the settlement agreement may call for a qualified settlement fund to hold any funds before distributing to class members. For maximum security and effectiveness, that trust should include quality assurance metrics, fraud loss prevention mechanisms, and sufficient privacy and security controls to prevent further compromise of the claimants’ information.

4. Administering the Class Action Settlement

Verifying the legitimacy of claims and administering the millions of separate payments made to individual class claimants is often the most complex element of a class action lawsuit. Courts often impose strict reporting requirements on settlement administration.

A class action settlement administrator handles validating claims, communicating with class members during the claim process, payment distribution, and so much more.  Engaging with an administrator prior to filing the motion for preliminary approval can save time and money during the life of the case.

Data Breaches and Class Action Lawsuits

The StockX data breach is not an isolated event. More than 600 companies suffer data breaches every year, and the personal and confidential data and information of millions of individuals are exposed or compromised.   

The size of the injured class in a data breach event is often in the millions, which adds significant complications to the efforts of the affected parties to rectify the breach and to make those parties whole.

Plan Your Secure Data Breach Class Action Settlement

Data breach cases require resources to accurately, and comprehensively notify millions of affected customers and distribute the settlement. With all our notification, contact center, and project management services handled in-house, Heffler Claims Group is fully equipped to handle the most complex data breach cases. Contact Heffler Claims Group to help plan your data breach class action settlement administration that raises the bar.

Heffler Claims Group
Heffler Claims Group is a national leader in class action settlement administration, specializing in the notice and administration of complex legal matters. Together with Prime Clerk, the leading bankruptcy claims and noticing agent and another Duff & Phelps company, we offer the most comprehensive administrative services in the industry.

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