Facts

The San Dieguito Union High School District utilizes the Aeries School Information System to manage student data. Anurag Gupta, individually and on behalf of his minor children, D.G. and V.G., and Melinda Tomes, a parent of former students who were enrolled in the school district, filed a class action against Aeries Software, Inc. The class included all individuals in the United States who had an Aeries account through the San Dieguito Union High School District at the same time of the data breach.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that the data breach affected certain personal information of individuals with Aeries accounts through the San Dieguito Union High School District. Plaintiffs claimed that defendant learned that the local database at one of its school district clients was subjected to unauthorized access, and alleged that defendant did not notify its school district customers of the data breach until months later, and even then, defendant did not disclose all the information that was subject to the data breach. Plaintiffs contended that defendant was responsible for allowing the data breach to occur because it failed to implement and maintain any reasonable safeguards and failed to comply with industry-standard security practices. Defendant knew it was a prime target for hackers given the significant amount of sensitive and personal information processed through the Aeries School Information System and stored in Aeries hosting.
As a result of the breach, plaintiffs had been exposed to and were at a significant risk of identity theft, financial fraud, and other identity-related fraud into the indefinite future. Plaintiff asserted claims for negligence; negligence per se; declaratory judgment; breach of confidence; breach of contract; intrusion upon seclusion; violations of California's unfair competition law; violation of the Customer Records Act; and violation of the Consumer Privacy Act.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions.

Settlement Discussions

The parties participated in three mediation sessions with mediator Martin Quinn, which ultimately resulted in an agreement in principle resolving all claims in this action.

Result

The parties reached an agreement wherein the defendant admitted no wrongdoing but agreed to pay $1.75 million to settle class members' claims.