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|Zappos.com Loses Arbitration Bid in Data Breach Class Action Lawsuit|
- Thursday, 11 October 2012 13:22
Zappos.com Loses Arbitration Bid in Data Breach Class Action Lawsuit
By Sarah Pierce
After dedicating quite a bit of coverage to the growing number of companies placing mandatory arbitration clauses in their user contracts, effectively banning consumer class action lawsuits, it was a welcome repose yesterday to read an article on Forbes.com about a court shooting down Zappos.com’s request to force users into arbitration following the massive Zappos data breach that occurred in January.
Nearly 24 million consumers were affected by the Zappos data breach, sparking dozens of class action lawsuits against the company. Zappos tried to send the lawsuits to arbitration based on the arbitration clause in its user agreement, but a federal court recently struck down the agreement for being too obscure and deceptive.
Later, the court blasts Zappos for trying to bind users into arbitration simply because they browse the site. According to the court:
Now that the court has ruled Zappos.com’s arbitration clause unenforceable, the class action lawsuits against the company will likely proceed. The cases have been consolidated into a single class action lawsuit entitled In re: Zappos.com Inc., Customer Data Security Breach Litigation (MDL No. 2357), U.S. District Court, District of Nevada.
The Zappos.com Data Breach Class Action Lawsuit is seeking damages and injunctive relief for consumers affected by the hack, including that Zappos pay for credit monitoring and identity theft insurance.
Updated October 11th, 2012
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Last Updated on Thursday, 27 December 2012 11:09