National Student $10M MOVEit Hack Settlement
America ı By USA Herald
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The National Student Clearinghouse has agreed to pay nearly $10 million to settle multidistrict litigation over the 2023 breach of Progress Software’s MOVEit file transfer tool. This settlement, outlined in a Massachusetts federal court filing on Friday, aims to resolve a November 2023 class action that alleged weak security practices by National Student Clearinghouse and Progress Software exposed personal information, including Social Security numbers, of roughly 1.5 million individuals.
National Student $10M MOVEit Hack Settlement : Impact on Affected Class Members
The settlement creates a $9.95 million fund to compensate class members, offering two years of credit monitoring and payments for losses resulting from the breach. Affected individuals can claim up to $12,500 for documented damages or receive a cash payment of $100. The amount may fluctuate depending on how many people file claims.
Losses covered include unreimbursed fraud, internet usage, credit monitoring costs, and fraudulent charges. In addition, the fund will pay attorney fees, administrative costs, and an award for lead plaintiff Michael Evangelista, a Georgia resident.
Significant Litigation Risks Avoided
“The settlement provides immediate and guaranteed relief in the face of difficult, extensive, and expensive litigation that poses a significant risk that plaintiff and the settlement class might recover nothing from NSC,” the plaintiff’s legal team explained in the motion for approval.
Although the case against National Student Clearinghouse has been resolved, the litigation against Progress Software remains ongoing.
Defense Arguments and Settlement Reasoning
National Student Clearinghouse, a key service provider for higher education institutions, argued that it may not have been possible to prevent the breach. The company could have claimed that Progress Software was entirely responsible for the vulnerability and that it owed no direct duty to the students affected since it operates as an intermediary for educational institutions.
Class attorneys acknowledged that pursuing a trial would have posed substantial risks. National Student Clearinghouse could have successfully argued that it wasn’t responsible for the breach or that the class members couldn’t sufficiently prove their claims, potentially leading to no recovery for the plaintiffs.
National Student $10M MOVEit Hack Settlement : Next Steps in the Litigation
Although representatives for the parties were not immediately available for comment, class counsel believes this settlement is a reasonable compromise given the uncertainty surrounding trial outcomes. Evangelista was represented by several prominent law firms, including Hagens Berman Sobol Shapiro LLP, Berger Montague PC, and Cohen Milstein Sellers & Toll PLLC, among others.
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