The class actions alleged the Allstate defendants violated the Federal Wiretap Act. (Credit: Igor Golovniov/Shutterstock.com)
The Texas attorney general has accused Allstate Insurance Co. of surveilling consumers on their mobile devices, selling the data and ultimately using that information to raise insurance rates.
Now, at least eight class actions have been filed against Allstate.
The class actions claim Allstate collected the data by developing software for third-party apps that watch an individual's driving behavior. In addition, this data was also allegedly marketed and sold.
The majority of the lawsuits were filed in the Northern District of Illinois, where Allstate is based, but one lawsuit is in the Northern District of California.
The surge of litigation sparked after Texas Attorney General Ken Paxton sued Allstate and its subsidiary Arity LLC on Jan. 13 in the District Court of Montgomery County, Texas.
This action followed an investigation, which Paxton claimed exposed that Allstate and Arity "paid millions of dollars to install Allstate's tracking software. The personal data of millions of Americans was sold to insurance companies without their knowledge or consent in violation of the law."
According to the lawsuits, data from more than 45 million Americans was farmed to create the "world's largest driving behavior database."
Morgan & Morgan and Clifford Law Offices quickly stepped in and hit Allstate and Arity with a consumer class action the next day.
Denial of wrongdoing
Sidley Austin attorneys David Andrew Gordon, Hussin Javier Kordi and Ian M. Ross filed appearances on behalf of the Allstate defendants.
While counsel for the defendants did not respond to a request for comment, Allstate has denied 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.
While the data collected was allegedly used to create a driving profile of individuals, the California class action pointed out the data was likely not accurate because the software installed in the third-party apps cannot differentiate between a passenger and a driver.
"Defendants used this personal data to make insurance coverage decisions for consumers who sought vehicle insurance with them," the California class action claimed. "They would also sell this data to other insurers, enabling those insurers to make their own coverage decisions about individual consumers."
The class actions similarly alleged the Allstate defendants violated the Federal Wiretap Act, which bans intentionally intercepting an individual's "wire oral or electronic communication."
In addition, most of the proposed classes claimed violations of the Stored Communications Act and the Computer Fraud and Abuse Act.
"The putative class is comprised of millions of Americans who were not informed of, did not consent to, and suffered harms as a result of Defendants’ ongoing collection, use, and sale of their personal data," the California complaint alleged. "Plaintiffs and class members seek compensatory, consequential, statutory, punitive, general, and nominal damages, disgorgement and restitution, and injunctive relief on behalf of all consumers whose data was captured, collected, stored, and sold by Defendants without their knowledge and consent."
This article was sourced using Law.com Radar, which delivers AI-enhanced case summaries and daily case reports from more than 2,600 state and federal courts. This article first published on Law.com.
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