Eastern Radiologists in North Carolina has decided to resolve a class action lawsuit associated with a 2023 data breach for $3.25 million. The data breach report submitted to the HHS’s Office for Civil Rights indicated that the protected health information (PHI) of 886,746 individuals was affected. The Eastern Radiologists discovered the data breach on November 24, 2023 and launched an investigation that confirmed a threat actor accessed its system between November 20, 2023 and November 24, 2023. Exfiltrated patient files contained health information, such as names, contact details, driver’s license numbers, Social Security numbers, insurance details, financial account numbers, procedure data, diagnoses, and imaging data.
Because of the data breach, Eastern Radiologists faced multiple class action lawsuits. The lawsuits had similar claims, and so they were combined into one lawsuit. The Powers et al. v. Eastern Radiologists, Inc. lawsuit was filed in the General Court of Justice, Superior Court Division, in Pitt County, North Carolina. Allegedly, Eastern Radiologists did not use reasonable and proper cybersecurity procedures, failed to comply with FTC guidelines on cybersecurity or comply with industry requirements, and its actions violated the Health Insurance Portability and Accountability (HIPAA). Besides negligence, the lawsuit mentioned claims of breach of implied contract, negligence per se, breach of fiduciary duty, unjust enrichment, violation of privacy, and violations of North Carolina’s Unfair and Deceptive Trade Practices Act.
Eastern Radiologists rejects all claims and arguments in the lawsuit and states no wrongdoing. After thinking about the risks of this particular litigation and the expenses of the ongoing lawsuit, all parties decided to resolve the litigation. The terms of the settlement require Eastern Radiologists to set aside a $3,250,000 settlement fund, which will be used to pay attorneys’ fees and expenditures, service awards for the named plaintiffs, and settlement management costs. The rest of the settlement fund will cover the benefits given to the class members.
All class members can claim medical account monitoring services for one year and one of two cash payment methods. A class member can submit a claim to reimburse documented, unreimbursed out-of-pocket losses up to $5,000 for each class member. The limit of cash payments for losses is $200,000. Class member cash payments will be divided pro rata depending on the number of claims submitted.
The last day to file an exclusion or objection to the settlement is October 28, 2025. Class members can submit claims until December 1, 2025. The schedule of the final approval hearing is December 15, 2025. Claims will be paid within 30 to 60 days following the final approval hearing.