United States: The Anthem Data Breach: The Fallout And What’s Next

Last Updated: February 11 2015
Article by Cynthia J. Larose and Kevin M. McGinty

By now (unless you have been under a snow drift), you have likely heard about the apparent intrusion into a database at the nation's largest health insurer, Anthem, Inc.  Rather than reiterate the facts as currently known (see Anthem's dedicated website for updates), we'll look at the fallout and what's next.

The Fallout

Anthem first detected a breach of a database containing records for 80 million customers and employees on January 29, 2015.  On February 4 – less than one week later – Anthem disclosed the existence of the breach and began providing notice to affected individuals.  What followed then was all too predictable; over the next two days Anthem was named as a defendant in six separate class action lawsuits filed in federal courts in Alabama, California, Georgia and Indiana.

In the brief time elapsed between disclosure of the Anthem data breach and filing of the first class actions few details were known about how the breach occurred.  This did not deter would-be litigants who, in the absence of details about the data theft, filed complaints larded with boilerplate allegations concerning the omnipresent threat of data theft and the potential harms that could conceivably befall persons whose data was stolen.  Unsurprisingly, the race to the courthouse has encouraged a certain amount of expediency in pleading these hastily-filed claims, as evidenced by one complaint against Anthem which copies, almost verbatim, allegations made by a different law firm on behalf of a different plaintiff in one of the Target data breach class actions.  See Christina v Target Corp., No. 3:14-cv-00051-SDD-RLB (M.D. La.).

Absent knowledge about how the breach occurred or even whether the named plaintiffs' own information was stolen, the complaints rest on simplistic allegations as to Anthem's alleged wrongdoing and the harms that might be suffered by those whose information was at risk.  The lawsuits uniformly plead what amounts to a strict liability standard – if confidential information was stolen from Anthem's databases, then Anthem perforce failed to exercise reasonable care to protect that information.  With respect to injury, each of the lawsuits focuses on the risk of identity theft.  None of the complaints allege that any named plaintiff actually suffered identity theft.

What can companies do to avoid inviting a rash of class action litigation by disclosing a data breach?  Not much.  As is evident from the Mintz Matrix of state data breach notification laws, many states require reasonably prompt notice to affected persons when a breach occurs.  Anthem provides services in California and given that this is health information, it would have been required to provide notice in a very short window.  What is reasonable in any given context will vary.  But whether the breach is announced within a few days of discovery or, for investigative or other reasons, is disclosed at some later point in time, plaintiffs' lawyers will soon be locked in a race to the courthouse in order to obtain a perceived first mover advantage in taking control of ensuing litigation.  Whenever a data breach is announced, as night follows day, lawsuits will follow.

The filing of multiple lawsuits in multiple federal courts means that the Anthem data breach litigation, like litigation concerning the Home Depot and Target data breaches, is likely to end up being subject to consolidation proceedings before the federal Judicial Panel on Multidistrict Litigation, which will determine whether to consolidate the cases for pretrial proceedings and, if so, which court will conduct those proceedings.  Substantive litigation is unlikely to occur before such procedural issues are resolved.

The cases filed against Anthem are as follows:

What's Next 

Concerns for Employers.    Members of the affected health insurance plans are not the only ones to be concerned about the Anthem breach.  If you are an employer whose employees' health benefits programs have been placed with Anthem or your employees are covered by some Anthem-offered product, you should be examining any potential obligations you may have to your covered employees.   If your group health plan is self-insured, you should be assessing and reviewing your HIPAA Policies & Procedures and your agreements with Anthem to determine what your obligations are for any unauthorized disclosures of HIPAA Protected Health Information —- and you may indeed have some obligations under HIPAA.   You should be reviewing these issues now to determine what your plan's status is and what your company's role is and what role is played by Anthem.  This breach may not involve medical/clinical data (according to Anthem), but that does not mean it is not a "HIPAA breach."   That has been inaccurately reported by some media.   If you are a self-insured group health plan, you may be "covered entity" for purposes of HIPAA and may have separate notification obligations apart from the public information being provided and sent by Anthem.

Review your contract and other agreements with Anthem to make a determination as to where your company stands and contact Anthem to ensure that your employees (and your company's interests) are protected.

Anthem is still evaluating the damage.   Theories abound as to the origin of the hack and whether this was an attempt to harvest the personal information of millions of Anthem members or a more targeted, state-sponsored cyber-attack for other reasons, employers should be on the alert for unusual activity in networks or attempts by individuals to access company information.  The scope of information contained in the Anthem databases can be used not only to steal the identities of individuals, but also to gain access to corporate networks through "social engineering" and perhaps hold corporate "crown jewels" for ransom.

Regulatory Actions.  Attorneys general in at least six states, including California, Connecticut, and Massachusetts, have launched investigations into the breach.  For example, Connecticut AG Jepsen has sent a letter to Anthem's CEO demanding a response by March 4, and the National Association of Insurance Commissioners has called for a multi-state examination of Anthem and the circumstances surrounding the breach.Today, the New York Department of Financial Services announced new cyber security assessments for insurance companies in the Empire State.  More on that to come.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Kevin M. McGinty
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions