The Librarian Wins In The Data Breach David Vs. Goliath Battle

Written by Evan Schuman
February 14th, 2008

A Florida librarian—whose confidential data was apparently accessed in a databreach involving Wells-Fargo and Sprint Nextel—won his lawsuit against the two giants on Tuesday, when neither company bothered to send anyone to represent them at the hearing.

Miami-Dade County Court Judge Jacqueline Schwartz ordered the two firms to pay Theodore Karantsalis the full amount he sought, plus court costs. Given that the consumer hadn’t sustained any financial losses, he was only seeking $597 so the court order was for the two firms to pay $756.80.

Although that amount might seem trivial, Karantsalis initially argued that it was likely more than most consumers who filed class-action lawsuits ever received (after attorney fees are paid) and it would be received much more quickly.

The original incident involving Wells-Fargo and Sprint Nextel was baffling, as Karantsalis never knew how the companies got his confidential information as he wasn’t a customer of theirs.

But his decision to use small claims court to fight back made the librarian activist—whose eclectic background includes serving as an inspector for the U.S. Immigration and Naturalization Service as performing security for the Transportation Security Administration—made him somewhat of a media darling. Consider the reader comments from our initial story about his efforts.

It seems that Karantsalis’ modest $597 requested payout—which he said he calculated by tripling the cost of a PGP annual site license—would have likely been paid even had the judge not made her ruling. Karantsalis said that he received a FedEx package the day before the hearing, which included a 15-paragraph settlement offer from both Wells-Fargo and Sprint Nextel. That letter offered him the full $597, in exchange for his agreeing to not discuss the case in the media.

By waiting a day, he got the money anyway—plus $159.80 in court costs—and was free to say what he wanted.

But this case brings up some much bigger issues for retailers. The traditional U.S. court system does not do well with the data breach victims, who often have a very difficult time proving material financial losses. Small claims courts, as Karantsalis has proven, sidestep that issue.

With this settlement publicized, will tens of thousands consumers now take these frequent breach notification letters and drive to their local small claims court? The onerous nature of a retailer having to defend against literally tens of thousands of virtually identical accusations was precisely the kind of situation that class-action lawsuits were supposed to eliminate. But the civil demands for financial losses create a crack for these cases to slip into.

Will this Wells Fargo settlement start pushing consumer databreach victims all across the country to start singing the Wells Fargo song from "Music Man"? (O-ho the Wells Fargo Wagon is a-comin’ down the street, I wish, I wish I knew whose settlement it will be!)

Maybe, just maybe, those data breaches might not be seen as so cost-free, after all.


10 Comments | Read The Librarian Wins In The Data Breach David Vs. Goliath Battle

  1. Jane Dont Says:

    OMG, is this all you have to worry about? If the victim were to attempt to recover in “traditional” (your term) courts, how are they supposed to prove the mechanics of a breach, when the retailers/banks/processors hold all the technology cards?!? If there is anything to be learned here, it is that holders of financial data need to determine exactly which accounts were exposed, and only mail notifications to those affected. If this man was never a WF or SN customer, they shouldn’t have his data in the first place. Sheesh.

  2. Evan Schuman Says:

    Not sure I see your point. The librarian in this case tried to contact Wells Fargo and Sprint to say that he shouldn’t be on their lists, but they never responded to that question, according to the librarian. The economics of a traditional lawsuit wouldn’t work so he came up with the idea of going the Small Claims Court route.

  3. Jed Summerton Says:

    This article is informative about the court case and settlement – but not about what happened to the plaintiff (the breach itself). So I have no context by which to judge the importance of the ruling. Can you provide me a link that describes the “breach”?

  4. Jon McGinn Says:

    Jane Don’t, Way to go, David. This is actually a huge story that I hope will get a lot of folks to follow suit — yes, pun intended.

  5. Ken Thore Says:

    This guy should run for office.I’d vote for him.That thinking outide the box.

  6. D Low (Carol City) Says:

    This guy worked at the library in Carol City, Miami.Cool guy, helps everyone.He down. DL

  7. long time Sprint customer Says:

    I’m interested in suing Sprint for promising me a $10/month discount for being a long-time customer when changing to a new plan but the discount never appeared on my bill. They now deny that I was promised it. I’m interested in hearing from others with the same experience to make a stronger case.

  8. long time Sprint customer Says:

    Any pro bono legal advice applicable for cell phone contract disputes in small claims court contract would be welcome too. Everything regarding the contract was verbal (over the phone) so I asked them to pull a recording of the conversation to prove me wrong and I got the usual “Customer Care”? runaround.

  9. Certified G Says:

    This dude is certified gangsta!He walk the walk when all you other fools just talk.Too bad this didn’t become a national story.

  10. Frank McGill Says:

    Outstanding article. This should have received much more publicity.


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