Change Healthcare Data Breach Lawsuits MDL Judge Seeks Cooperation With State Courts

Attorneys in the federal MDL met last month to lay the foundations for potential Change Healthcare settlement negotiations early in the litigation over last year’s massive data breach.

U.S. District Judge Donovan Frank has sent a letter to four judges in California and Texas state courts, requesting that they coordinate with him on the handling of lawsuits over last year’s massive Change Healthcare data breach.

Although Change Healthcare is not a household name, the company plays a critical role behind the scenes of the healthcare industry, providing software, analytics and administrative services. Its systems handle private health information for roughly one in three Americans each year.

However, Change Healthcare suffered a ransomware attack in February 2024, which exposed sensitive information and highly personal data on nearly 190 million individuals, including names, birthdates, Social Security numbers, medical records and insurance details. 

Following the disclosure of the Change Healthcare data breach, lawsuits began to emerge in both federal and state courts nationwide, as impacted individuals sought to hold the company accountable for failing to safeguard their data. 

While some plaintiffs chose to file in state courts, often due to localized harm or strategic legal preferences, others filed in federal court, where the cases have been centralized for coordinated discovery and pretrial proceedings before Judge Frank of the U.S. District of Minnesota.

There are currently at least 72 lawsuits now consolidated in federal MDL (multidistrict litigation) before Judge Frank, with dozens of additional claims pending in various state courts, including in California, Florida, Texas, Arizona, Tennessee, New Jersey and Nebraska. To avoid conflicting pretrial rulings and schedules, Judge Frank is now seeking to coordinate efforts across all jurisdictions as the litigation heats up.

Last month, Judge Frank issued a Coordination Order in the federal Change Healthcare MDL, directing the parties to begin early settlement discussions and prepare for pretrial discovery. 

Recognizing the growing number of related cases in state courts, he emphasized the need for coordination with judges overseeing those proceedings to avoid duplicative efforts and ensure a more efficient resolution of the litigation.

On May 1, Judge Frank sent a letter (PDF) to Commissioner William M. Litt of the Superior Court of California, Judges Shawn Nelson and Katherina A. Bacal, also of California state court, and Judge KT Musselman of Texas state court. The letter indicates there are a combined 26 Change Healthcare lawsuits filed in state courts nationwide.

“I understand that each of you have one or more of those state cases, and I would like your input concerning the coordination of the state and federal cases,” Judge Frank wrote. “In my previous MDL cases, the state and federal courts, with few exceptions, were able to coordinate pretrial matters to effectuate a meaningful and prompt resolution on those cases.”

Judge Frank said that he hoped that the coordination will lead to fair and meaningful discovery, deadlines and bellwether trial verdicts. He invited each of the judges to issue a coordination order in their respective courts, as he did last month, noting that such orders are not binding, and are essentially an agreement to share resources and issue complimentary orders at the state and federal level.

It is the second letter issued of its type in the litigation. The first letter was sent out last month to judges in Tennessee, New Jersey, Florida, Texas, California, Arizona and Nebraska.

As the Change Healthcare data breach lawsuits move forward throughout the remainder of 2024, it is expected that Judge Frank will call for the parties to prepare a group of bellwether test trials, to help see how juries may respond to evidence and testimony likely to be repeated in both state and federal trials. 

While the results of these bellwether trials will not be binding on other claims, they could help the parties negotiate a Change Healthcare data breach settlement agreement.

Judge Frank already had the parties meet on April 30 to outline the structure and timeline for potential Change Healthcare settlement negotiations. If the parties are unable to resolve the litigation during the coordinated MDL proceedings, each of the individual cases brought in the federal court system may be remanded back to U.S. District Courts nationwide for separate trial dates in the future.