Judaichi | Stocks | Getty Images
Wireless providers include T move, AT&T and Verizon The company has faced a series of lawsuits in recent years from women who accuse retail store employees of stealing intimate images or videos from their phones while helping them with in-store data transfers.
These cases are often dismissed when companies argue that they were unaware of an employee's actions and cannot be held responsible because the employee acted outside the scope of their duties. But legal experts told CNBC that could soon change after the court's recent ruling.
Now, experts say, the companies — and not just store employees — could face liability in future lawsuits that could lead them to address the recruiting, training and data security practices that victims say led to the breaches.
The latest lawsuit against AT&T was filed in a California court on Monday. A woman named Jane Doe claims that an employee at a Los Angeles store stole her nude photos and distributed them in February after she upgraded her iPhone and helped her transfer the data.
The case, brought by attorneys at the law firm C.A. Goldberg, now has a better chance of surviving and going to trial after a court ruled against T-Mobile in April involving a similar incident in Washington. , filed by the same law firm. Judge Stanley Bastian, who is overseeing the T-Mobile case, ruled that the case can move forward after the company sought to have the lawsuit dismissed.
T-Mobile, like other phone carriers, argued it was unaware of the employee's actions and said he acted beyond the call of duty. But the judge found the company could be liable and ruled the case should proceed.
The law firm called the ruling a “landmark” decision. The company said it was the first lawsuit of its kind against a wireless carrier accused of neglecting its duties by hiring employees suspected of stealing sensitive customer information. Legal experts say that could affect the fate of future cases, including one filed Monday against AT&T.
“This decision sets an important precedent, and we intend to continue our efforts to hold phone companies accountable for violations of customer privacy by such employees during phone trade-ins or other transactions in stores,” said CA Goldberg's Laura Hecht-Felella. T-Mobile and One of the lead attorneys behind the new AT&T case. “There are a lot of different things they could do to stop this from happening, but it's clear that everything they're doing right now is not enough.”
Founder Kelly Goldberg added that “the real hope is not to attract more cases” but to encourage companies to adopt better safeguards.
“That's what lawsuits do. It shows you can be held accountable for your negligence,” Goldberg said. “This may prompt phone companies to innovate in consumer safety and privacy protections in their stores.”
AT&T did not immediately respond to a request for comment. T-Mobile declined to comment.
More and more accusations
In the case against AT&T, the woman filed a police report that remains under investigation, the lawsuit said.
The indictment says there have been at least six similar allegations against AT&T in the past, either in civil lawsuits or police reports. The status of these cases is unclear. The cases mirror at least a dozen alleged Occurs at other providersAccording to news reports, T-Mobile and Verizon, for example.
Goldberg said she suspects the publicized cases are “just the tip of the iceberg” and there may be many more that clients never find out about.
“We suspect cell phone store theft is worse than we thought,” Goldberg said.
“As a society, we trust these cell phone providers with all of our most private information,” Goldberg said. “There's literally no limit to what their employees can steal from our phones and share with the world.”
She added that her company has received “case after case” from customers accusing phone store employees of stealing their information. Goldberg said the issue cuts across companies, making it an “industry-wide” concern.
Andrew Stengel, a New York attorney who specializes in cases involving the non-consensual disclosure of intimate images, commonly known as revenge porn, reviewed the T-Mobile Washington state ruling to CNBC. He said future cases, such as the AT&T lawsuit, are now more likely to survive motions to dismiss and move forward because attorneys will be able to point to this precedent in their arguments.
“This should make judges think twice before dismissing claims,” Stengel said. Similar case against T-Mobile past but not involved in the current litigation. “It should be able to not only give judges pause but allow them to reach agreement.”
If lawsuits against wireless carriers related to the theft of intimate images are allowed to proceed, they will enter the discovery phase, which Stengel likens to the “crown jewel” of a legal case.
During the discovery process, the defendant must turn over documents relevant to the case, which may reveal damning and incriminating information.
“Cellphone companies may be required to disclose some information that will increase liability in the future,” Stengel said. “If I were their lawyer, I would be very concerned about that.”
Stengel warned that while Washington's decision may be “exciting,” it is not binding and judges in other jurisdictions can choose to ignore it.
Still, Goldberg expects the decision to be “impactful.” She said that could prompt phone companies to eventually make changes to prevent such abuse.
“We think cell phone providers will become less arrogant about what they can get away with,” Goldberg said. “If you have a company that keeps hiring random perverts to steal consumers' most private, intimate photos, then , it’s the company’s fault.”