MADISON, Wis. — A federal judge has consolidated 14 proposed class-action lawsuits arising from a July cybersecurity incident at TruStage and paused the cases while the parties negotiate a protocol for exchanging information.
U.S. District Judge William M. Conley’s Sept. 24 order places the lawsuits under the first-filed case, brought by Bessemer System Federal Credit Union (now called Switch Federal Credit Union) and Surf Pediatrics and Medicine in the Western District of Wisconsin. The consolidation covers claims brought on behalf of businesses and individuals. It does not grant class-action status or decide whether TruStage is liable.
The cyberbreach has had significant affect on TruStage and its ability to pay claims, as the CU Daily has been reporting. While some systems have been restored, the company has not set a date for full restoration of its operations. It has said the downloading of a malicious file by an IT employee caused the system shutdown.
The plaintiffs allege TruStage failed to safeguard private and confidential information during a data security incident disclosed July 15. Those allegations have not been resolved by the court. TruStage has stated to date that it does not have evidence of member information being compromised, but has also stated the investigation remains ongoing.
Conley granted a joint request from the parties to stay the litigation while they negotiate how information will be shared. The order says those talks include the scope and content of notices to people who may have been affected, as well as TruStage’s insurance policies. The parties have also begun discussing mediation, the judge wrote.
Deadlines Put On Hold
Under the stay, TruStage and the other defendants do not yet have to answer or otherwise respond to the complaints. The parties must report to the court every 60 days on whether the stay should continue. Conley also deferred a pending motion seeking appointment of interim co-lead class counsel.
Charles Nerko and Lori Feldman were appointed temporary co-lead counsel for the credit union/commercial-entity plaintiffs, and Nickolas J. Hagman as temporary lead counsel for the individual plaintiffs. The judge said the lawyers could later propose other attorneys for permanent leadership roles, with court approval.
The order specifies that temporarily consolidating the cases does not merge the separate claims or prevent a party from seeking a different arrangement later. Conley also said the stay does not amount to a ruling on the cases’ merits.
