Carolina Arthritis Associates Settles Data Breach Lawsuit for $600,000
Carolina Arthritis Associates has decided to resolve a combined class action lawsuit involving a September 2024 data breach. The Carolina Arthritis Associates detected data breach on September 27, 2024, and investigated the incident. The investigation confirmed the potential theft of patient data files from its system from September 26, 2024 to September 30, 2024.
The file analysis revealed that information such as names, Social Security numbers, birth dates, treatment/procedure details, health record numbers, and names of the providers may have been compromised. The data breach affected up to 36,961 individuals. As a result of the data breach and potential HIPAA violation, Carolina Arthritis Associates faced multiple class action lawsuits, which alleged that the defendant did not put in place reasonable and proper security procedures to safeguard sensitive data on its system. The consolidated lawsuit, In re Carolina Arthritis Associates Data Incident Lawsuit, was filed in the General Court of Justice, Superior Court Division for New Hanover County, North Carolina. There is no admission of claims of wrongdoing or liability by Carolina Arthritis Associates. However, the company decided to resolve the lawsuit to avoid spending time and money that come with ongoing lawsuit and the uncertainty of trial.
The settlement terms require Carolina Arthritis Associates to create a $600,000 settlement fund to pay for the lawyers’ fees and expenditures, settlement management costs, and the class representatives’ service awards. After paying those expenses, what is left of the settlement fund will be used to cover class members’ benefits . The class lawyer and the class representatives agreed that this settlement is reasonable. The court already gave its preliminary approval of the settlement.
Class members are eligible to file a claim to reimburse their documented expenses incurred because of the data breach up to $5,000 each. Another alternative is to submit a claim for cash payment. Each class member will receive pro rata cash payment, approximately $100. The cash payment amount may be more or less than $100, as it may be adjusted based on the number of valid claims filed. On top of that, affected individuals will get free credit monitoring and identity theft protection services for two years. The last day to object and opt out of the settlement is until February 6, 2026. Claims must submitted on or before February 23, 2026. The final fairness hearing is scheduled on March 10, 2026.