Ophthalmology Practices Receive Early Settlement in Complex Class Action Over ECL Group’s Flawed Response to Ransomware Attacks
2024年7月3日 - 5:44AM
ビジネスワイヤ(英語)
A federal judge has approved a settlement in a complex class
action brought against eye-care practice management technology
provider ECL Group LLC by ophthalmology practices that licensed
software from ECL and related entities. Womble Bond Dickinson
partners Russ Ferguson, Patrick Spaugh and Matthew Tilley
represented the class of physician practices in the lawsuit over
ECL’s flawed response to a series of ransomware attacks in
2021.
The settlement, which Judge Catherine Eagles of the U.S.
District Court for the Middle District of North Carolina called “by
far the most complex class action settlement I have seen,” creates
a $1.46 million fund for the physician class, along with a $2.6
million settlement fund for patients whose personal information was
exposed during the resulting data breaches.
The agreement “gives the classes as a whole the best deal
possible in light of the limited funds available,” Judge Eagles
said in her ruling. In a hearing on the fairness of the settlement,
she noted that the class members “get everything they could have
gotten, really, and more than if you had litigated it.”
The 2022 lawsuit focused on a series of ransomware attacks in
2021 that exposed patient data and caused outages impacting patient
recordkeeping and billing services provided by ECL. The lawsuit
alleged that ECL failed to keep patient data secure and to provide
contractually required discounts while ECL’s services were
unavailable; it also alleged that ECL made misrepresentations about
the ransomware attack and engaged in unfair and deceptive trade
practices.
Because, as the court found, ECL’s assets are tied up in a
receivership and the defendants have large-scale financial
obligations to others, Womble Bond Dickinson negotiated an early
settlement on behalf of the class. The settlement included:
- Monetary payments for class members
- Credits to ECL customers for future services (which could value
as much as $5.5 million)
- The cessation of collection efforts by ECL for unpaid invoices
during periods with service interruptions
- The ability to terminate their contracts with ECL early and
without penalty (and with cooperation to obtain their data and
transition to a new provider)
- The assignment of two insurance policies to the physician
class
- A legal release avoiding liability for any data breach claims
brought by patients of the physician practices
“This settlement represents the best possible outcome for
doctors across the country who were affected by ECL’s business
practices,” WBD’s Russ Ferguson said.
Importantly, the only available assets to pay the settlement
class’s claims were ECL’s insurance proceeds. Additionally, those
insurance policies were being eroded by ECL’s own legal
costs—meaning an early settlement provided more money to the
physician practices. Before the settlement was finalized, ECL filed
for bankruptcy and put itself up for sale. The buyer of ECL
attempted to avoid honoring the physician class’s rights under the
settlement agreement, including the ability to receive contractual
credits and to terminate their contracts with ECL.
Womble Bond Dickinson objected to that in the bankruptcy court
in Texas, an effort led by Wojciech Jung. “Without this work” in
bankruptcy court, Judge Eagles wrote, “the class probably would
have lost substantial benefits from the settlement.”
Patrick Spaugh added, “In the face of a three-way fight between
the physicians, the patients, and ECL, this case could have easily
ended up with no one receiving money other than ECL’s attorneys. I
am thrilled that we instead achieved an early global resolution on
behalf of the physicians that maximized their benefits.”
About Womble Bond Dickinson Womble Bond Dickinson is a
transatlantic law firm with more than 1,000 lawyers based in 32
U.K. and U.S. office locations serving clients across every
business sector. The firm provides core legal services including
Commercial; Corporate; Employment; Dispute Resolution and
Litigation; Finance: Banking, Restructuring, Insolvency; IP,
Technology and Data; Private Wealth; Projects, Construction and
Infrastructure; Real Estate; and Regulatory Law.
“Womble Bond Dickinson,” the “law firm” or the “firm” refers to
the network of member firms of Womble Bond Dickinson
(International) Limited, consisting of Womble Bond Dickinson (UK)
LLP and Womble Bond Dickinson (US) LLP. Each of Womble Bond
Dickinson (UK) LLP and Womble Bond Dickinson (US) LLP is a separate
legal entity operating as an independent law firm. Womble Bond
Dickinson (International) Limited does not practice law. Please see
www.womblebonddickinson.com/us/legal-notice for further
details.
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Media Contact Alexandra Orr
919-755-2161 Alex.Orr@wbd-us.com