Anderson v. Fortra LLC

Background

This consolidated class action arose from a January 2023 cyberattack against Fortra. The attack allegedly used Fortra’s GoAnywhere MFT managed-file-transfer tool to access the servers of Fortra customers and steal data, including plaintiffs’ personally identifiable information. The plaintiffs alleged that Fortra had common-law, contractual, and statutory duties to protect that information. Their complaint asserted negligence, negligence per se, and declaratory-judgment claims on behalf of the entire class, along with additional California statutory claims for a California subclass.

Fortra had already filed a motion to dismiss for lack of standing and failure to state a claim. That motion had been fully briefed, argued, and remained under advisement when Fortra filed the motion to stay addressed in this order.

Related multidistrict-litigation proceedings

Similar lawsuits concerning the same data breach had been filed against Fortra’s customers in several federal district courts. A defendant in one related case asked the Judicial Panel on Multidistrict Litigation (JPML) to transfer and centralize the related actions in the District of Minnesota under 28 U.S.C. § 1407. The JPML had scheduled a hearing for January 25, 2024. Fortra supported centralization, while the plaintiffs in this case took no position on centralization but argued that any consolidated proceedings should be handled by this court.

Court’s analysis

The court explained that district courts have authority to stay proceedings while the JPML considers transfer and centralization. It applied three factors: potential prejudice to the party opposing the stay, hardship or inequity to the party seeking the stay, and the effect of a stay on judicial resources.

The court found that any prejudice to the plaintiffs would likely be minimal because the JPML’s hearing was approaching and any stay was expected to be brief. The court found that denying a stay could require Fortra to conduct duplicative discovery, relitigate discovery issues, and renegotiate discovery protocols if the cases were centralized. It also concluded that a stay could help avoid inconsistent or duplicative rulings on pending motions to dismiss in related cases, even though the court was already familiar with this case.

Disposition

The court found that the three factors, considered together, favored a stay. It granted Fortra’s Motion to Stay Proceedings. The court ordered that all proceedings and deadlines in the case be stayed until the JPML determines whether to centralize and transfer the action and completes any transfer under 28 U.S.C. § 1407. The order did not decide Fortra’s pending motion to dismiss or the merits of the plaintiffs’ claims.