Landmark Ruling: Court Partially Denies Motion to Dismiss in the Magellan Health, Inc. Data Breach Litigation, the Case Moves On

In a momentous development on June 1, 2022, United States District Judge Michael T. Liburdi delivered a crucial decision, denying in substantial part Magellan Health Inc.’s second motion to dismiss, signaling a crucial juncture in the ongoing data breach litigation. Magellan Health had sought to dismiss the Second Amended Consolidated Complaint (SACC) on October 26, 2021, citing a failure to state a claim under Fed. R. Civ. P. 12(b)(6). The recent ruling by the Court indicates a meticulous examination of the presented arguments.

While the decision led to the dismissal of certain parties and claims from the litigation, the Court rejected Magellan’s motion concerning specific negligence claims, unjust enrichment claims, and various state law claims. This landmark ruling not only shapes the trajectory of the ongoing legal battle but also establishes a precedent for the involved parties and the broader legal landscape.

The case, initiated by the Kehoe Law Firm, revolves around a class action lawsuit against Magellan Health, Inc., alleging the inadequate safeguarding of personally identifiable information (PII) and protected health information (PHI) belonging to its current and former employees, as well as health plan participants. The lawsuit follows a targeted cyberattack and data breach, affecting plaintiffs and over 365,000 class members.

Compromised information, encompassing names, contact details, employee ID numbers, W-2 or 1099 information, Social Security Numbers, taxpayer identification numbers, treatment details, health insurance account information, member IDs, and other health-related data, is alleged to be in the possession of cyberthieves. The complaint contends that Magellan Health’s negligent maintenance of this sensitive information on its computer network left it vulnerable to cyberattacks. 

Michael Yarnoff, Partner at Kehoe Law Firm, underscored the significance of personal information and corporations’ responsibility to protect it, stating, “In an era where personal data is increasingly under threat, corporations must prioritize the protection of sensitive information. The allegations against Magellan Health underscore the importance of robust cybersecurity measures to safeguard personal and health-related details.” 

For more information about Kehoe Law Firm and its involvement in this matter, please contact Michael Yarnoff at [email protected] or call (215) 792-6676.