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In a gripping legal drama unfolding in Seattle's federal court, POC USA LLC, a Utah-based manufacturer of skiing and cycling gear, has hurled a breach of contract lawsuit against logistics behemoth Expeditors International. The crux of this high-octane legal battle? An alleged failure to shield POC from a devastating cyberattack in February 2022, leading to a catastrophic business slump.

POC USA LLC Sues Over Cyberattack :  A Chain Reaction of Disruption

Owned by a Swedish entity, POC USA LLC accuses Expeditors International of Washington Inc. of not only failing to fortify its digital defenses against the cyber onslaught but also of making a critical decision - refusing to satisfy a ransomware demand. This led to a drastic measure: shutting down their computer systems for an agonizing 90 days. This digital blackout left POC in the lurch, unable to access its warehoused products or fulfill burgeoning orders, according to the complaint filed on Monday.

POC USA LLC Sues Over Cyberattack : Collateral Damage

The ripple effects were immediate and severe. POC, reliant on Expeditors for shipping and processing, witnessed a chilling effect as customers, unable to wait out the delay, defected to competing brands. This shift was especially damaging given the seasonal nature of POC's products like ski goggles and biking accessories.

"Millions of dollars worth of orders were in limbo, and despite POC's Herculean manual efforts, a significant portion had to be canceled," states the complaint. "This led to a mass exodus of customers, drawn away by the allure of competitor brands."

A Broken Bond of Trust

Dating back to March 2016, the distributor service agreement between POC and the publicly traded Expeditors promised a seamless, computerized distribution management system. This system was meant to give POC a real-time window into the status of its products through Expeditors' online client portal - a promise POC now claims was hollow.

In 2021 and 2022, POC paid Expeditors handsomely - nearly $2.6 million and over $3 million respectively - for these logistics services.

A Foreseen Disaster?

Despite being in a digital era rife with cyber threats, and despite Expeditors' own public assurances of robust cybersecurity measures, POC alleges that Expeditors failed to erect adequate digital defenses, leaving them vulnerable to the attack.

POC USA LLC Sues Over Cyberattack :  A Cascade of Consequences

The fallout was dramatic. POC scrambled to manually salvage order data, halting e-commerce sales and grappling with frustrated customers. The lawsuit paints a picture of chaos - increased freight costs, demurrage charges, refunds, chargebacks, and a glut of unsold products languishing in Expeditors' warehouses.

Seeking Justice Amidst the Digital Debris

POC's lawsuit levels serious charges: breach of implied covenant of good faith, gross negligence, bailment, and violating consumer protection law. Damian Phillips, POC's communication director, described the shutdown as causing a "near total cessation" of their North American operations. He quantified the impact as "financially very significant," encompassing lost orders, customers, and additional logistic restructuring costs.

Following this debacle, POC has pivoted to a new logistics partner.

Expeditors International's Stance

In response, Expeditors International disclosed the cyberattack in a February 2022 news release. They emphasized the prioritization of system security, customer impact minimization, and transparent communication, but offered no timeline for resuming operations.

Representatives for Expeditors were unreachable for comment.

Legal Eagles Take Flight

Representing POC are Ryan Witt of Witt Law Group PS, R. Bradford Fawley of Fawley PLLC, and Richard S. Luskin in-house. Expeditors counters with legal firepower from Stephen C. Willey and Michele L. Stephen of Savitt Bruce & Willey LLP.