A precedent-setting decision in a class action case alleging privacy violations under California’s Confidentiality of Medical Information Act (CMIA), litigated by our BakerHostetler team, was recognized by the LA Daily Journal as one of the “Top Appellate Reversals of 2014.” The lawsuit was filed against Eisenhower Medical Center (EMC) following the theft of a computer containing patient information. The decision eliminated $500 million in potential damages for EMC and narrowed the definition of “medical information” under the CMIA.

The unencrypted computer, stolen from EMC’s waiting room in 2011, contained the names, ages, birth dates, clerical record numbers, and partial Social Security numbers of more than 500,000 patients. Because CMIA violations provide a remedy of $1,000 per record without the need to demonstrate actual harm, the potential half billion dollars in penalties could have been detrimental to the hospital. However, the Fourth District Court of Appeal held that “medical information” under the CMIA must consist of both a patient’s individually identifiable information combined with a patient’s medical history, and ordered the trial court to grant summary judgment to EMC on its class action CMIA claim.

Partner Michael Matthias told the Daily Journal, “We moved simply on [the definition of medical information] to focus the court’s attention, and also we thought it was a clean issue for an appellate court.”

“This case highlights the need to balance individual privacy interests with the public policy in not imposing unreasonable burdens on healthcare providers, since the exposure from something as simple as a stolen laptop could have potentially bankrupted the hospital,” said Partner Ted Kobus, Co-Leader of our Privacy and Data Protection team.

One of the early lawsuits filed in a recent wave of litigation claiming violations of the CMIA in data breach incidents, this case provides clarification on a relatively new area of law.

“By identifying and narrowing the type of information protected under the CMIA, the decision will likely have a lasting effect on the healthcare industry in California and in future litigation as other courts wrestle with the issue,” said Paul Karlsgodt, Leader of the Class Action Defense team.

Partner Teresa Chow also represented EMC in this case.