Mannacio v. General Electric Company - January 3, 2007 - Complaint

PARTIES:

THE COURT


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Attorn~ys for obfendant
GENERAL ELECTRIC COMPANY UNITEDSTATES DISTRICTCOURT

Also on December5, 2006, Plaintiff served GE through its registered agent with the summons and complaint for this Action. A copy of the Complaint and Summons are attached hereto as Exhibits A and B. GE files this Notice of Removal within 30days of service of the initial pleadings and within one year of the commencement of the Action as required by 28 U.S.C. § 1446 (b). Accordingly, removal of this Action is timely. No previous application for removal has been made.

Removal is proper because the Court has original jurisdiction over the putative class action pursuant to the provisions of P.L. 109-2 ("the Class Action Fairness Act"or"CAFA"), codified at 28U.S.c. §§I332(d) because:(1) the putative class action consists of at least 100 proposed class members; (2) the citizenship of at least one proposed class member is different from that of any Defendant; and (3) the matter in controversy after aggregating the claims of the proposed class members, exceeds $5 million, exclusive ofinterest and costs.A. Minimal Diversity of Citizenship Exists In This Case

For original jurisdiction to exist under CAFA, "any member of a class of plaintiffs must be a citizen of a State different from any defendant." 28U.S.C.

Because GE and the named Plaintiff are citizens of different states, minimal diversity of citizenship exists. See 28 U.S.C. § 1332(d). Additionally, because GE is not a citizen of the state in which the action was originally filed, the "home state" or "local controversy" exceptions set forth in 28 U.S.C. §§ 1332(d)(3) and l332(d)(4) do not apply.B. The Aggregate Amount In Controversy Exceeds $S Million

For original jurisdiction to exist under CAFA, the aggregate amount in controversy must exceed $5 million, exclusive of interest and costs. 28 U.S.C. 1332(d)(2), AlthoughGEmaintainsthatneitherPlaintiffnor anymemberofthe putative class has suffered any damage as a result of the underlying factual allegations, the aggregated recovery sought in the Complaint exceeds $5 million.

The putative class, according to the Complaint. consists of "approximately 50,000 employees and their family members." SeeEx. A at IJI 10. Thus, in order to reach CAPA's $5 million trigger, the complaint need only be seekingaminimumof$100peremployee. Since "familymembers"ofthe50,000 employees also are identified as class members, the triggering dollar amount per class member is even less. The Complaint as pledlmakes clear that the $5 million threshold has been met.

The Complaint arises out of GE's September 22, 2006 notification to Plaintiff that certain information regarding Plaintiff and other current and former GE employees was contained on a computer that was stolen from a locked hotel. Id., at lJ[1. The Complaint asserts claims for failure to provide proper notice of security breach and loss of personal information, failure to maintain reasonable securityprocedures,negligence,invasionof privacy,and unfairbusinesspractices. Id., atfit7-42. TheComplaintallegesthatasaresultof GE'Spurportedunlawful actions, "Plaintiff and the other Class members suffered actual damages" and seeks recovery for "past and future" damages. Id., at TJ[ 30, 36 and G. The Complaint also seeks recovery for all costs incurred by class members "as a result of the disclosureoftheirpersonalinformation,includingthecost ofallmeasures reasonably necessary to protect against identity theft." Id., at lJ[ G. Such measures undoubtedlyincludearequestforcreditmonitoring, whichinandofitselfwould besufficienttomeetthe$5millionthreshold. Twoleadingcreditagencies, ExperianandTransUnion, offercreditmonitoringservicesfor$119.40peryear. See http://www.experian.com; http://www.transunion.com. A third credit agency, Equifax,chargesapproximately $60-$155dollarsperyearfor creditmonitoring. See https:llwww.econsumer.equifax.com. 'Thus, credit monitoring for a single year for all putative class members would exceed the $5 million benchmark.

Additionally,theComplaintseeksequitablereliefrequiring GEto "institute reasonable security procedures to protect [the class members'] personal information."!d.,at'Jl25. Theimplementationofnewsecurityprocedureswould obviouslyrequireGE to incur costs,whichareproperly consideredfor purposes of determiningtheaggregatedamountin controversy. SeeIn reFordMotor Co./Citibank, 264 F. 3d 952, 958 (9th Cir, 2001). Finally, the Complaint seeks attorneys' fees pursuant to California Business and Professions Code §§ 17200 et. seq. andtheCaliforniaCodeof CivilProcedure§1021.5,whichalsoshouldbe considered in determiningthe amount incontroversy. Rippeev. BostonMarket Corp., 408F.Supp.2d982, 984(SD. Cal.2005), Inshort, therecanbenodoubt thatthevariousformsof damages, injunctivereliefandattorneys'feessoughtby Plaintiffs exceed $100 per class member.

Because GE and the named Plaintiff are citizens of different states, minimal diversity of citizenship exists. See 28 U.S.C. § 1332(d). Additionally, becauseGEisnotacitizen ofthestateinwhichtheactionwasoriginallyfiled, the "home state" or "local controversy" exceptions set forth in 28 U.S.C. §§ 1332(d)(3) and 1332(d)(4) do not apply.B. The Aggregate Amount In Controversy Exceeds $5Million

For original jurisdiction to exist under CAFA, the aggregate amount in controversy must exceed $5 million, exclusive of interest and costs. 28 U.S.C. 1332(d)(2), Although GE maintains that neither Plaintiff nor any member of the putative class has suffered any damage as a result of the underlying factual allegations, the aggregated recovery sought in the Complaint exceeds $5 million.

The putative class, according to the Complaint, consists of "approximately 50,000 employees and their family members." See Ex. Aat lJI 10. Thus, in order to reach CAFA's $5 million trigger, the complaint need only be seekingaminimum of$100peremployee• Since "familymembers" ofthe50,000 employees also are identified as class members, the triggering dollar amount per class member is even less. The Complaint as pled makes clear that the $5 million threshold has been met.

The Complaint arises out of GE' s September 22, 2006 notification to Plaintiff that certain information regarding Plaintiff and other current and former GEemployees was contained on a computer that was stolen from a locked hotel. Id., at 11. The Complaint asserts claims for failure to provide proper notice of security breach and loss of personal information, failure to maintain reasonable security procedures, negligence, invasion of privacy, and unfair business practices. Id.• at TIl 17-42. The Complaint alleges that as a result of GE' s purported unlawful actions, "Plaintiff and the other Class members suffered actual damages" and seeks recovery for "past and future" damages. Id., at lfl30, 36 and G. The Complaint also seeks recovery for all costs incurred by class members "as a result of the disclosure of their personal information, including the COst of all measures reasonably necessary to protect against identity theft." Id., at' G. Such measures undoubtedly include a request for credit monitoring, which in and of itself would be sufficient to meet the $5 million threshold. Two leading credit agencies, Experian and Transllnion, offer credit monitoring services for $119.40 per year. See http://www.experian.com; http://www.transunion.com. A third credit agency, Equifax, charges approximately $60-$155 dollars per year for credit monitoring. See https;//www.econsumer.equifax.com. Thus, credit monitoring for a single year for all putative class members would exceed the $5 million benchmark.

Additionally, the Complaint seeks equitable reliefrequiring GE to "institute reasonable security procedures to protect [the class members'] personal information." Id., at en 25. The implementation of new security procedures would obviously require GE to incur costs, which are properly considered for purposes of determining the aggregated amount in controversy. See In re Ford Motor Co./Citibank, 264 F. 3d 952,958 (9th Cir, 2001). Finally, the Complaint seeks attorneys' fees pursuant to California Business and Professions Code §§ 17200 et. seq. and the California Code of Civil Procedure § 1021.5, which also should be considered in determining the amount in controversy. Rippee v. Boston Market Corp., 408 F. Supp. 2d 982, 984 (SD. Cal. 2005), In short, there can be no doubt that the various forms of damages, injunctive relief and attorneys' fees sought by Plaintiffs exceed $100 per class member.

Based upon the various forms of recovery sought in the Complaint, the aggregate amount in controversy in this Action exceeds $5 million thereby satisfying 28 U.S.c. § 1332(d)(2).C. Membership In the Purported Class Exceeds 100

Under CAFA, a District Court shall decline to exercise jurisdiction of a class action if ''the number of members of all proposed plaintiff classes in the aggregate is less' than 100." 28 U.S.C. § 1332(d)(5)(B). The putative class as pled consists of "approximately 50,000 employees and their family members." See Ex. A at CJ 10. Therefore, this threshold requirement for jurisdiction under CAFA is satisfied.III. Intradistrict Assignment

This action is currently pending in the MarinCounty Superior Court. The United Stated District Court for the Northern District of California is a proper venue for this action. 28 U.S.C. § 84(a); 28 U.S,C. § 1446(a). Assignment to this court is appropriate under the Civil Local Rules because this action arises in Marin County. Civil Local Rule 3-5(b), 3-2(0) and (d),IV. Notice To State Court and Ad"erse Party

A copy of this Notice of Removal is being served on Plaintiff and will be filed with the Clerk of the Superior Court for the State of California for the County of Marin.V. Demand For Trial ByJury

GE hereby demands a trial by jury on all issues so triable. F.R.C.P. 38(b); Civil Local Rule 3-6.
TO 914156150774 P.09
JAN-~3-2007 11:26 FROM HUNTON &WILLIAMS
RUKJN HYlAND &. DORIALLP
PclCTS. Rulcin (SBN 178336)

On orabout Septl;Jnba:22.2006,OEIlOti:6cx1Plaintiffthatcomputc:r ~
:~ 2S
\Dleoc:rypted, lItld thatthe !heft~due. to Deg1igence. AlthousJtGBbasacknowledged that

CalifoJnia common law.

Onor about~22,2006, NualaO'Conner JCelley. OE's ~efPriV8f;)' Officer. rent aletter to all CUIfCIIt aud former emPloyees withpersonal. information maintained ~ the stelencomputerequipment. Theletterinforms the afrecttdemployees oftile theftbut docs not providethe date the theftoccurred. Theletrerstates that"[almong the data stand onthat equipment were, yOIlr nameand U.S. Social Secwit)'number." (emphasis added). BeyoDd this•

Uponreceiving the September 22, 20061et=". Plainliffcontacted OR todetennine theextentof thestoleninfonnation. On oraboutSeptember28,2006, Plainlit!'spoke with OE employeeTImStewart,whoadmitted that thestolen computer equipmtmt contained employee . infotmation beyondnamesandSocialSecuritynumbers. WhileStewartdivulpdsomeofthe . categories of private information thatwerenol on the stolen laptopcOmputerandexternalhard drive,berefusedto fully disclose the categories ofpmooal information contlJined on the COQIputer equipment.

Onor about September29,2006,Plainti:lfspokewithNualaKelley. Kelleyabo refusedtodisclosethe typesofpersoJ1.alinfon'nationcoDtained 0II1he1fo1alcomputer equiPment.

Todate.,Defendanthasrefused to infimn Plailltitfof all ~gories of employee iuformation contained oil the stolen computerequipmQlt.

Plaintitrbringsthisactiononhisown bebalfand as aclassactionon behalf ofall personsprox.imatelydamaged by Defend1lllt'. c:onduct, including, butnotnecessarily limitedto, the fullowingClass:
(i)
Whl'ther the noticeofthe sec~ty &n:ach OSprovided c:wnjJJied withCaliforniaCivilCodesecticms 1798.80 erseq.; (ii)
Whether GEmaintained fQISOII8ble ~ty procedures and ~caI toprotecttheclusmembers'persorml informationas requiredbyCivilCode sdOllS 1798.80etseq.;

ma:inl8in reasonable procedures and pnWces to prtVent the disclosure ofprivateemployee
CLASS ACT[ON COMPLA1NJ'
P.14
TO 914156150774
JAN-03-2007 11:27 FROM HUNTON & WILLIAMS
(vii) Wb.ether GE's refuslll to'infonnthe daB!l mcmbms ofall categories of personal ialoPnation contained on the stolenc:ompute.l equipment violates CaIifomia Busines8 8bd Professioris Code sections 17200et seq. (viii)' Whetblll' OE·sfailure to maintain reasooable seauityprocc4ulea and practices to preventdisclosure ofprivate information violatesBusinessandProfessions Code acdious 17200 eraeq. (c) Typicality: Plaintitfpw'SUllS claDns typical of the dass members" olaim&. OEsubjected Plaintiffand all otherclassmembenJ to thesame~ct andcaused !hem to S1IfFer the same type ofinjl.llY. (d) Adequacy:PlaintitTwill fairly and adequatelypro~ theintaresIs of the classmembers. Plaintiffhas no inb:rest advetSe to theintemta. ofthe other claas members. Plaintiffhas retained oounsc1 expenen«:ed in complex classdons and wen qualified to represet1t the classlD~ in this case. (e) SUPeriOJity: A elllSS action provides a means for the fiUr and efficient afljudieation oftbis controversy superior to otheravailable means. Bl5CIIUSe individual joinderof all membersofllie class is impIactical,~ tteatment wiU pcxmit a IBrPnumberafsilDilllIly situatedpersons to prosecu~ theirCOIIlmOD claims in a single fOnDn simultaDeDosJy. e1ficieatly. and without uanec:essary duplicationofeffortunci expeusethatnUJnCtOtlll individualactions 'would engender. The expenseslIIld burdensof individual litigationwould make it diffieu1t or impossible forindividual members of the ~ to redress the wronp dODeto them, while important publicinterestswiU be ~cd by adclmaing themauerasa class ac:UOD. ThecosJ to and burden on the ~ system ofadjudication ofindividualized litigation wouJd be substaatial, and substlnlially moretban the costslIIId burdClDS of a classaction. Classlitigation would alsO prevent the potential fur inooDsistem or contradictory judgments. -6-'
CLASS ACJ10N COMPLMNT

7

California Civil Code section 1798.82 provides that:

Plaintiffinoorporates by reference in litiscauseofaction each allegation of paragraphs 1through 21inclusive, asthough:tUlly setfortb hc:rein.

Puzsuant to CivilCode section 179&.84(e), Plaintiffand fhe otherClassMembers. areentitled tocqWtabJe relief requiring ORtoinstitutereasonablesecurityproecdurestoprotect theirpersonal infonnatiol'l.

PursuanttoCivilCodeseclion1798.84(b).PlaiDtiff and theotherClassMembe.n are entitled torecoveralldamagesresultingfromOS's failuretomaintainmscmablesecurity procedures to protect theirpersonal inmonalion.

Plaintiff incorporates by ~inthis cause ofaction eadt aneption of paragnlphs' 1 through 26 inclusive,as tholighfu.I.Iy ad: forthherein.

G.E owed a duty of careto plaintiffandtheother Class Mtmbers tode~p reaoubIc procedures and practicesto preventthedisQosureoftheprivateinfunnation of employees and Ibeirfamilies.

Through its conduct as &ll~ herein, GE bteached its duty ofcue.

Plaintiff and theotha" Oass Members are entitled to injunctive relief in !hetorm offull disclosure oftbt. pmona! infoImalion contaiucd 011thestoleD. wmputerequipment.

Plaintiffincorporates by refenmc:e in this causeofactioneadl allegation of

Plaintiffand the other Class Members each po8SCIs a 1UncJamenta1 right ofprivacy gusrimteed by the United StatesConstitution, the CalifOmia Consdtutioo. and California commoII law. Pursuant to federal and 5tate law, all individuals possessa rightto pri\'acy in, 8II1Ol1I other things,theiridentifyinginMmatiou, socialsecuritynumber,medical histmy, .finarn:ial history, andemployment history.

Plaintiffand~ otherClassMember! had a iusonabJeCltpectation ofpriVllCYln the OOlIfidcnlial infurmation in GE's possessioD.

GE'Sacquisition, handlingand disclosure of the Class Members' confidential

As a dim:!: andproximate result ofOE's unlllWfi.ll actions as described betein.

Plaintit'fand the otberClus Members areentitled to equitablllreJiefin th8fonn of ,full disclosure ofthetypesofperscmal infonnation wrongfully discJoaW..

3

Plain1iffincorporates by referau:ointhiscauseof ~tion eachaJIeptionof pmagraphs I through 37 inclusivo. lIS though fullysetforth herein.

Section17200oftheCaliComiaBusiness andProfessions Code-California's Unfair Competition. Law -prohibitsunfiIir competitidn by prohiliitin& Jnter aUII, anyunlawful, unfairor .li'auclwart: businessact or practice.

GE'sfailuretoprovidetimely,adequatediscIorureofthobreachofsecurityin the ClassMembers' .P~ infonnation c:onstitutes an anIawful, fiwdulcnt IUdunfiIir business act andpr&:;ticeinviolationofBusinessandProfessioosCode sec:tions 17200 el4fltJ.

Pumuant to Business and Ptofesaions Code sections 17200 et3eq., Plaintiffand die otherClassMembenareentitled toequitablereliDfreqairiDgGEtoprovidelldequatedi$CJosure ofthebreach of thesewntyoflheirpensonal information,anawardofattorneys' fees purswmt to applicable Jaw, and costs.

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IXI ByPERSONALSERVICE: Ideliveredtheenvelopebyhandontheaddressee, addressed as stated above.
(State) IdeclareunderpenaltyofperjuryunderthelawsoftheStateofCaliforniathat the above is true and correct. NETWORK

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