Storm v. Paytime, Inc., No. 14-cv-01138-JEJ (M.D. Pa.).

In August, Paytime, Inc., a payroll services company, moved to dismiss a putative class action filed in the wake of a data breach in which the personal and financial information of more than 230,000 people was compromised.  Paytime argued that the plaintiffs lack standing, have failed to plead actual harm, and were not a party to or intended beneficiary of any contract with Paytime. 

On September 30, while the motion to dismiss was pending, Paytime ran up against the court’s deadline for joining additional parties and filed a motion for leave to file a third party complaint against its data security auditor.  Six months prior to the data breach, SotirIS, a provider of integrated business solutions and cloud hosting, performed a “comprehensive breach assessment” for Paytime.  According to Paytime, “SotirIS failed to identify vulnerabilities in Paytime’s computer systems and, therefore, contributed to the occurrence of the data security event.”  Therefore, Paytime argues, if Paytime were found liable “for such a vulnerability, then SotirIS is liable to [Paytime] for contribution and indemnification.”

The plaintiffs have not yet opposed Paytime’s motion for leave to file a third party complaint.  As of October 7, the motion to dismiss was fully briefed.