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Mobile operators including T-Mobile, AT&T And Verizon In recent years, retailers have faced a number of lawsuits from women claiming that retail employees stole intimate images or videos from their phones while helping them transfer data in the store.
The lawsuits are routinely dismissed when companies argue that they were unaware of the employees' actions and were not liable because the employees acted outside of their job scope. But that could soon change following a recent court ruling, legal experts told CNBC.
Now the companies – not just the store employees – could be held liable in future lawsuits, which could force them to address the hiring, training and privacy practices that victims say led to the breaches, the experts said.
The latest lawsuit against AT&T was filed in California state court on Monday. A woman named Jane Doe claimed that an employee at a Los Angeles store stole her nude photos and distributed them in February after she updated her iPhone and he helped her transfer her data.
That case, filed by lawyers at the Goldberg law firm in California, now has a better chance of surviving and going to trial after a court ruling against T-Mobile in April in a similar incident in Washington brought by the same firm. Judge Stanley Bastian, who is presiding over the case against T-Mobile, ruled that the case could proceed after the company tried to dismiss the lawsuit.
T-Mobile, like other wireless carriers, had argued that it had no knowledge of the employee's actions and claimed he had acted outside the scope of his job. However, the judge ruled that the company could potentially be held liable and ordered the case to proceed.
The ruling, which the law firm described as a “groundbreaking” decision, is the first case of its kind against a wireless carrier accused of negligence for hiring employees who allegedly stole confidential customer data, the company said. The case could affect the fate of future cases, including the lawsuit filed against AT&T on Monday, legal experts said.
“This decision sets an important precedent, and we intend to continue trying to hold phone companies accountable for situations like this one, where their employees violate customers' privacy during phone trade-ins or other in-store transactions,” said Laura Hecht-Felella of CA Goldberg, a lead attorney in both the T-Mobile case and the new AT&T case. “There are many different ways they can try to prevent this from happening, and it's clear that what they're currently doing is not sufficient.”
Carrie Goldberg, the firm's founder, added that the “hope is not really to attract more cases” but to encourage companies to take better security precautions.
“That's what a lawsuit does. It says you can be held accountable for your negligence,” Goldberg said. “And that will probably prompt the phone companies to improve their security and privacy measures for customers in their stores.”
AT&T did not immediately respond to a request for comment. T-Mobile declined to comment.
Increasing allegations
In the case against AT&T, the woman filed a police complaint, but the investigation is still ongoing, the lawsuit states.
According to the lawsuit, at least six other similar allegations have been made against AT&T in the past, either in civil suits or in police reports. The outcome of those cases is unclear. The cases are similar to at least a dozen others that media reports say have occurred at other carriers such as T-Mobile and Verizon.
Goldberg believes that the cases that have become public are “just the tip of the iceberg” and that there are probably more cases that customers never noticed.
“We suspect that the phenomenon of thefts in cell phone stores is larger than we can comprehend,” Goldberg said.
“As a society, we trust these wireless carriers with all of our most private information,” Goldberg said. “And there really is no limit to what their employees can steal from our phones and then share with the world.”
She added that her firm has received “case after case” in which customers claim phone shop employees have stolen their data. Goldberg said the problem affects all businesses and is therefore an “industry-wide” issue.
Andrew Stengel, a New York lawyer who specializes in cases involving the involuntary release of intimate images, better known as revenge porn, reviewed T-Mobile's decision in Washington for CNBC. He said future cases like AT&T's suit now have a better chance of surviving motions to dismiss and moving forward because lawyers can point to this precedent in their arguments.
“This should make judges think twice or three times before they dismiss a lawsuit,” said Stengel, who has brought a similar suit against T-Mobile in the past but is not involved in the current trial. “This should give judges not only food for thought, but ammunition to agree.”
If legal proceedings against mobile phone providers in connection with the theft of intimate images are admitted, they will be included in the evidence, which Stengel compared to the “crown jewels” of a legal dispute.
As part of the evidence gathering process, defendants are required to produce documents relevant to the case that could contain incriminating and incriminating information.
“There may be information that the wireless companies will have to disclose that increases their liability in the future,” Stengel said. “If I were their lawyer, I would be very concerned about that.”
Stengel warned that while the decision from Washington was “exciting,” it was not binding and that judges in other jurisdictions could ignore it.
Still, Goldberg expects the decision to be “influential.” She said it could push phone companies to finally make changes to prevent this kind of abuse.
“We believe that mobile operators will be much less arrogant in the future when it comes to what they can get away with,” Goldberg said. “If a company is constantly hiring perverts to steal customers' most private and intimate images, then the company only has itself to blame.”
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