Class Action Lawsuit Seeks Damages For Gas Station And Convenience Store Owners Affected By Colonial Pipeline Ransomware Shutdown

Wednesday, August 4, 2021 | | Author: Joel R. Rhine | Original Article

CLASS ACTION LAWSUIT SEEKS DAMAGES FOR GAS STATION AND  CONVENIENCE STORE OWNERS AFFECTED BY COLONIAL  PIPELINE RANSOMWARE SHUTDOWN 

More than 11,000 gas stations, many of them independent small businesses, lost thousands of  dollars from lack of gas June 22, 2021, Wilmington, NC – The Rhine Law Firm in Wilmington, NC along with its co-counsel has filed a class-action lawsuit on behalf of gas station and convenience store owners located across the east and southeast. The lawsuit was filed on Monday in the United States  District Court for the Northern District of Georgia. The Rhine Law Firm is joined by Morgan & Morgan attorneys based in Tampa, FL and Atlanta GA, Wallace & Graham, PA-based in  Salisbury NC, and Hall & Green in Wilmington NC.  

The lawsuit alleges that the Colonial Pipeline shut down due to a ransomware attack on its computer system on May 7, 2021, was entirely avoidable. The complaint further alleges the company failed to take basic steps to secure its computer system against intruders. Because of the six-day shutdown, owners of gas stations ran out of gasoline to sell to their customers and suffered a loss of revenue as a result.  

In the months leading up to the shutdown, the lawsuit alleges that Colonial had declined to meet with government agency representatives who were trying to help the industry make sure that its computer systems were secure. The complaint claims that all it took was a single stolen login and password for the “threat actor” to be able to break into Colonial’s network.    

The complaint describes that the pipeline essentially holds a monopoly over the delivery of gasoline and other refined petroleum products to states along the East Coast. According to the lawsuit, Colonial has earned hundreds of millions of dollars in dividends for its owners, yet did not have a ransomware plan in place when the break-in happened.  

Ransomware attacks occur when hackers get access to a company’s computer system and plant software that encrypts the data so the system cannot be used. Ransomware actors will often also copy and “exfiltrate” a company’s sensitive information such as customer names and billing information. The hackers demand that the affected company pay them a ransom if it wants to get access to its system again and get its data back. 

In the case of Colonial, the lawsuit alleges that the company paid a multi-million-dollar ransom,  but it expects the loss to be covered by its cyber insurance policy.  

Attorney Joel Rhine stated, “The complaint alleges that the company disregarded the rights of  those affected by failing to take reasonable measures to ensure that the pipeline’s critical  infrastructure was safeguarded.” Attorney Mona Lisa Wallace added, “The lawsuit claims that  Colonial owed a duty running to the gas station and convenience store owners to take basic steps to  secure its electronic systems.” 

Attorney John Green commented, “The danger of an attack on pipeline facilities was discussed  as a national security risk as early as 2000, and the risk of a cyber-attack on pipelines, like this  ransomware attack, was discussed in congressional testimony as early as 2011 and 2012.”