Consulting Radiologists Pays $2.2M to Settle Class Action Data Breach Litigation
A settlement has been approved to resolve class action data breach litigation against Consulting Radiologists Ltd., a physician-owned radiology practice that provides medical imaging services at more than 100 healthcare facilities in Minnesota and the surrounding areas.
The Consulting Radiologists data breach was reported to the HHS’ Office for Civil Rights on June 14, 2024, as involving the protected health information of up to 583,824 individuals. A network intrusion was identified on February 12, 2024, and the investigation confirmed that the network was accessed by an unauthorized third party who may have obtained patient data such as names, addresses, dates of birth, medical information, health insurance information, along with the Social Security numbers of 19,346 individuals.
The data breach was announced in April 2024, and notification letters were sent to the affected individuals. Shortly thereafter, a class action lawsuit was filed in response to the data breach, followed by a further 18 complaints. In August 2024, District Court Judge Thomas Conley issued an order to consolidate all complaints against Consulting Radiologists. The consolidated lawsuit – In re Consulting Radiologists Data Incident Litigation – was filed in the District Court of the 4th Judicial District Court of Hennepin County, Minnesota, on November 1, 2024.
The lawsuit claimed the data breach was the result of negligence and could have been prevented had reasonable and appropriate cybersecurity measures been implemented and maintained. The lawsuit alleged that Consulting Radiologists had violated the HIPAA Rules, including the HIPAA Security Rule, by failing to properly secure patient data and the HIPAA Breach Notification Rule due to the delay in issuing notifications to the affected individuals.
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The lawsuit asserted claims of negligence, negligence per se, breach of contract, breach of implied contract, breach of third-party contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, breach of confidence, invasion of privacy/intrusion upon seclusion, unjust enrichment, and violations of the Minnesota Consumer Fraud Act and Minnesota Health Records Act.
Consulting Radiologists sought to have the lawsuit dismissed, and that attempt was partially successful; however, the court failed to dismiss the claims of negligence, negligence per se, unjust enrichment, injunctive/declaratory relief, and violations of the Minnesota Consumer Fraud Act and Minnesota Health Records Act. Following mediation and ongoing negotiations, a settlement was agreed to bring the litigation to an end, with no admission of liability or wrongdoing. Consulting Radiologists has agreed to pay $2,200,000 in aggregate to cover attorneys’ fees and expenses, settlement administration and notification costs, service awards for the 19 class representatives, and benefits to the class members.
Class members may claim up to three benefits under the settlement: A claim may be submitted for reimbursement of documented, unreimbursed losses due to the data breach up to a maximum of $5,000 per class member. Two years of single-bureau credit monitoring services may be claimed, and class members may also claim a cash payment. The cash payments depend on the types of data compromised in the incident, and are expected to be $125 for individuals whose Social Security numbers were involved, and $50 for all other class members. The cash payments are subject to a pro rata reduction to remain under the cap of $2,200,000.
The deadline for objection to and exclusion from the settlement is January 30, 2026. The deadline for submitting a claim is March 2, 2026, and the final fairness hearing has been scheduled for February 25, 2026. Further information can be found on the settlement website: https://www.crdatasettlement.com/
