Change Healthcare Data Breach Settlement Talks To Be Explored Early in MDL

Parties involved in the federal Change Healthcare data breach lawsuits have been ordered to meet separately with a U.S. Magistrate Judge over the next two months, to discuss the most effective structure for settlement talks and the optimum timing for when negotiations should begin that may provide payouts to millions of Americans.

The potential Change Healthcare settlement talks will get underway early in the litigation, which emerged after a massive data breach was announced in February 2024, when it was disclosed that hackers had gained access to the names, Social Security numbers, dates of birth, addresses, medical records, insurance details and other sensitive data of up to 100 million individuals.

While Change Healthcare is not well known among most U.S. consumers, it provides critical software, analytics and services for medical providers throughout the healthcare system, and some estimates suggest that one out of every three Americans has their private health information pass through the company’s servers.

Following the massive data breach, a steadily growing number of Change Healthcare data breach class action lawsuits have been filed throughout the federal court system, each raising similar allegations that hackers were able to access sensitive patient information due to lax cybersecurity measures the company had in place, exposing individuals to a serious risk of credit problems and identity fraud for years to come.

Given the common questions of fact and law presented in the complaints, the U.S. Judicial Panel on Multidistrict Litigation (JPML) centralized all pretrial proceedings before U.S. District Court Judge Donovan W. Frank in the District of Minnesota, for coordinated discovery and pretrial proceedings.

Following an initial Change Healthcare lawsuit status conference in September 2024, Judge Frank had originally ordered the parties to meet again this week, on December 4, 2024. However, that conference has been cancelled due to multiple illnesses amongst the defense team’s attorneys.

Two days prior to the meeting, a letter was submitted to the court requesting a postponement (PDF), indicating that multiple members from the defense team, including lead counsel, have either fallen ill with Covid, or have been advised by a medical professional against flying.

Judge Frank granted the postponement of the next status conference on the same day, and is expected to reschedule the conference for either December 16-17, or January 16, 2025.

Change Healthcare Data Breach Settlement Talks

Despite the conference delay, early in the pretrial proceedings Judge Frank issued a text order, which directed lead counsel for plaintiffs and defendants to hold separate, in-person ex parte meetings with U.S. Magistrate Judge Dulce J. Foster, to explore the possibility of Change Healthcare data breach settlement talks.

According to a docket entry issued on November 12, the Court indicated that the meetings should include discussions around the best structure for settlement talks, optimal timing for when discussions should be held on different subgroups of claims, whether certain motions or discovery needs to be completed before settlement negotiations, and whether the talks will be Court-directed or through private mediation.

Such meetings are common in complex litigation, where they are often used as a judicial tool to facilitate detailed and confidential discussions that can expedite settlement processes.

Currently, the ex parte meeting for plaintiffs’ counsel is set to be held on December 18, 2024, while defense counsels’ meeting is scheduled for January 30, 2025. Both meetings will be held at 2:00 p.m. in Judge Foster’s Chambers at the Minneapolis Courthouse.

As the court begins to explore the potential for a Change Healthcare lawsuit settlement, it is expected that the size and scope of the litigation will continue to expand over the coming weeks and months, as many individuals impacted are just now receiving notice about the Change Healthcare data breach, and contacting lawyers to sign up for the litigation.

In addition to class action lawsuits, it is also expected that a number of individual arbitration claims will be filed, which may also impact the total Change Healthcare settlement payouts the company is required to make to resolve the litigation.