The class action brought its claims under the Federal Wiretap Act, the Computer Fraud and Abuse Act and invasion of privacy. (Credit: duyina1990/Adobe Stock)
Morgan & Morgan and Clifford Law Offices filed a class action against Allstate Insurance Co. for allegedly unlawfully collecting and selling data from more than 45 million consumers to raise premiums.
The consumer class action comes on the heels of Attorney General Ken Paxton's enforcement action against Allstate and its subsidiary Arity LLC under the Texas Data Privacy and Security Act, which was filed Jan. 13, 2025, in Montgomery County, Texas.
The Texas state action and the class action both allege Allstate created software on third-party apps to collect data on consumers' driving behavior without their knowledge. In addition, the data was sold to other insurance companies and used for Allstate's underwriting purposes to raise prices, the suits alleged.
The class action was filed in the Northern District of Illinois, and goes further than the claims on behalf of Texas consumers in the state action to encompass a national class.
"The approach here is to advance the interest of all consumers who used upstate as its insured," said John Yanchuynis of Morgan & Morgan. "The class action device, particularly here, allows us to do that."
Yanchuynis said the case may call for fresh thinking about exactly what constitutes damage.
"Sometimes, the harms are not as ascertainable," he said. "So, you have to be better at describing how when information is taken, despite the absence of consent by the consumer, what the effect of that means. One, it's a violation of our freedom of choice, but also, people's information here was harvested without their consent and knowledge for the use by an insurance company to price its product."
While the lawsuit discusses the third-party apps with the integrated software like Life360 and Sirius XM, Yanchuynis said naming the apps as defendants would complicate things with subclasses.
Going against Allstate and Arity solely is "advancing the interest of all consumers who use the apps that Allstate used or collected information from, so it's a broader based approach to provide the relief for many more people," Yanchuynis said.
Allstate did not immediately respond to a request for comment, but in a statement from Tuesday, the insurance company pushed back against the allegations.
“Arity helps consumers get the most accurate auto insurance price after they consent in a simple and transparent way that fully complies with all laws and regulations," Allstate said in a statement.
The class action brought its claims under the Federal Wiretap Act, the Computer Fraud and Abuse Act and invasion of privacy.
"Be careful who you give your information to, and be well informed of how they're going to use it," Yanchuynis said. "One of the biggest problems in the world is companies do not provide information about their collection and whom they're selling it to and what those buyers are using that information for. It's a real problem."
Yanchuynis is one of the attorneys for the proposed class. Since 1999, Yanchuynis has focused on data privacy and technology law, and has certified two class actions involving violations of data privacy against Google involving the incognito browser and the Google Analytics for Firebase tool.
The biggest challenge in a case like this, Yanchuynis said, is to get the class certified. This involves educating judges on the importance of privacy rights and the repercussions.
This article was first published by law.com.
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