Juyochi | Istock | Getty Images
Wireless service providers, including T Mobile, AT&T And Verizon have faced a series of lawsuits in recent years from women who allege retail workers stole intimate images or videos from their phones while helping them transfer data in-store.
Cases are typically dismissed when companies argue they were unaware of employees’ actions and aren’t liable because the employees were acting outside the scope of their job duties. But that could soon change after a recent court ruling, legal experts tell CNBC.
Now, companies — not just store employees — could be held liable in future litigation, potentially leading them to address hiring, training and data security practices that victims say led to the breaches, experts said.
The latest lawsuit against AT&T was filed Monday in a California court. A woman, identified as Jane Doe, alleged that a Los Angeles store employee stole nude photos of her and distributed them in February after she updated her iPhone and he helped her transfer her data.
The case, filed by attorneys at CA Goldberg, now has a better chance of surviving and going to trial after a court ruling in April against T-Mobile over a similar incident in Washington brought by the same law firm. Judge Stanley Bastian, the judge overseeing the T-Mobile case, ruled that the case could move forward after the company sought to have the complaint dismissed.
T-Mobile, like other carriers, had argued that it was unaware of the employee’s actions and that he was acting outside the scope of his job duties. But the judge ruled that the company could potentially be held liable and ordered the case to proceed.
The decision, described by the law firm as a “landmark” ruling, It’s the first such lawsuit filed against a wireless carrier accused of negligence for hiring employees suspected of stealing sensitive customer data, the firm said. It could have implications for future cases, including the lawsuit filed against AT&T on Monday, legal experts said.
“This decision sets an important precedent, and we intend to continue to try to hold phone companies accountable for situations like this, where their employees violate customers’ privacy when they trade in phones or make other transactions in stores,” said Laura Hecht-Felella of CA Goldberg, one of the lead lawyers behind the T-Mobile and AT&T cases. “There are many different ways they can try to prevent this from happening, and it’s clear that what they’re doing right now is not adequate.”
Carrie Goldberg, the firm’s founder, added that “the hope is not really to attract more cases” but to encourage businesses to put better safeguards in place.
“That’s what a lawsuit does. It lets you say you can be held liable for your negligence,” Goldberg said. “And it will probably incentivize phone companies to innovate on security and consumer privacy in their stores.”
AT&T did not immediately respond to a request for comment. T-Mobile declined to comment.
Increasing allegations
In the case against AT&T, the woman filed a police complaint, which remains under investigation, the lawsuit said.
At least six other similar allegations have been made against AT&T in the past, either in civil lawsuits or in police reports, according to the complaint. The findings in those cases are unclear. The cases echo at least a dozen others that have allegedly occurred at other carriers, such as T-Mobile and Verizon, according to media reports.
Goldberg believes the cases that have been made public are just “the tip of the iceberg” and that there are likely more that clients have never detected.
“We suspect that the phenomenon of thefts in mobile phone stores is more significant than we can imagine,” Goldberg said.
“As a society, we trust these cell phone providers with all of our most private information,” Goldberg said. “And there’s really no limit to what their employees can steal from our phones and then share with the world.”
She added that her company has received “case after case” of customers claiming that phone store employees have stolen their data. Goldberg said the problem spans multiple companies, making it an “industry-wide” concern.
Andrew Stengel, a New York attorney who specializes in cases involving the nonconsensual disclosure of intimate images, better known as revenge porn, reviewed the T-Mobile Washington decision for CNBC. He said future cases, like the AT&T lawsuit, now have a better chance of surviving motions to dismiss and moving forward because attorneys will be able to reference this precedent in their arguments.
“This should give judges a second or third thought before they dismiss a case,” said Stengel, who has filed a similar lawsuit against T-Mobile in the past but is not involved in the current dispute. “This should give judges not only time to think, but also time to come up with arguments to agree on.”
If the lawsuits against mobile phone carriers over the theft of intimate images are allowed to proceed, they will enter the discovery phase, which Stengel likened to the “crown jewels” of a court case.
When disclosing evidence, defendants are required to hand over documents relevant to the case that could reveal incriminating and compromising information.
“There could be information that the cell phone companies would be forced to disclose that would increase their liability in the future,” Stengel said. “If I were their lawyer, I would be very concerned about that.”
Stengel cautioned that while the Washington decision may be “exciting,” it is not binding and judges in other jurisdictions may choose to ignore it.
Goldberg, however, expects the ruling to be “influential,” and could prompt phone companies to finally make changes to prevent such abuses.
“We think that the wireless carriers are going to be a lot less arrogant about what they can get away with,” Goldberg said. “If you’re a company that’s regularly hiring perverts who are stealing consumers’ most private and intimate photos, then that’s the company’s fault.”
cnbc
