After several twist and turns, on July 7th Intel Corp. succeeded in achieving final dismissal of class claims alleging that Intel knew about purported security vulnerabilities in its microprocessors and failed to disclose or mitigate those vulnerabilities.  The case, In Re Intel Corp. CPU Marketing, Sales Practices and Products Liability Litigation, 3:18-md-02828, had a long history—a narrowed set of class claims had survived three prior rounds of motions to dismiss.  Had the claims been allowed to go forward a fourth time, businesses may have faced additional liability concerns for attempting to address cyber vulnerabilities in their products before those exploits became public and susceptible to exploitation by hackers.

According to Plaintiffs, independent security researchers uncovered potential security vulnerabilities in microprocessors made by Intel that made the microprocessors susceptible to certain exploits, which have become generally known as “Meltdown” and “Spectre.”  Intel learned about the security vulnerabilities in mid-2017, but kept information about the security vulnerabilities under embargo until early 2018.  Keeping information about security vulnerabilities under embargo for a limited period of time is a traditional and lawful practice that allows a company to implement security fixes before hackers learn of the potential exploits.  The dispute in this case centered on the length of the embargo and the allegation that Intel continued to sell its product during that timeframe.

The Court had initially held that Plaintiffs sufficiently stated a claim for unfair conduct under the California UCL, among a handful of other claims, predicated on allegations that Intel delayed lifting the embargo until after the 2017 holiday season so it could continue to sell devices powered by the allegedly vulnerable microprocessors.  However, on reconsideration, the Court determined that Plaintiffs had disavowed that theory, and instead “Plaintiffs [were] simply alleging that Intel sold product during a normal and reasonable embargo with ‘asymmetrical information.’”  The Court held that this allegation was insufficient to support an unfair conduct claim and dismissed all remaining claims with prejudice.

The Court noted that its rulings were not intended “to declare or establish any specific default embargo period, let alone one that would apply under all circumstances.”  This may come as a relief to tech companies who have to employ embargoes to resolve current or future security vulnerabilities, where establishment of a default embargo period could overly restrict the timeframe necessary to resolve the issues.

Photo of Megan Rodgers Megan Rodgers

Megan Rodgers is a trial attorney in Covington’s litigation practice who focuses her practice on high-stakes complex litigation in federal and state courts. A significant portion of her practice involves high‑profile matters brought by state attorneys general, including mass tort, consumer protection, and…

Megan Rodgers is a trial attorney in Covington’s litigation practice who focuses her practice on high-stakes complex litigation in federal and state courts. A significant portion of her practice involves high‑profile matters brought by state attorneys general, including mass tort, consumer protection, and class action litigation in the technology and life sciences industries.

Megan is known for navigating especially complex cases and successfully taking cases from pre-trial through jury verdicts. She has experience conducting voir dire and trial examinations, arguing directed verdict and other dispositive motions, preparing expert and fact witnesses for deposition and trial, presenting in jury exercises, and developing case strategy. Most recently, she defended a pharmaceutical distributor against mass tort claims alleging public nuisance in a six-month bench trial and four-month jury trial in the opioids litigation. As a class action litigator, Megan uses her trial experience to shape strategy early on in a way that sets clients up for success at the class certification stage.

Megan was recently named one of “America’s Top Lawyers” by Forbes and a “Lawyer on the Fast Track” by The Recorder, recognized by the Daily Journal in its “Top 40 Under 40” feature, and named a “Rising Star” by Law360.

Watch: Megan provides insights on class action litigation, as part of our Navigating Class Actions video series.

 

Photo of Sam Greeley Sam Greeley

Samuel Greeley primarily represents businesses in the financial services and tech industries in complex litigation, from class actions and multidistrict litigation to enforcement actions brought by government regulators. With a breadth of experience in both federal and state courts, representing clients through all…

Samuel Greeley primarily represents businesses in the financial services and tech industries in complex litigation, from class actions and multidistrict litigation to enforcement actions brought by government regulators. With a breadth of experience in both federal and state courts, representing clients through all stages of the litigation from initial motions practice to fact and expert discovery, through to dispositive motions and trial, Sam focuses on advancing the big picture arguments and strategies that will help clients prevail, and implementing the tactics that will achieve those outcomes.

Sam frequently litigates matters relating to consumer protection, fraud, unfair practices, FCRA, EFTA, RICO, and similar claims. This includes advising clients on issues relating to fintech, cryptocurrency, and digital assets, and how they can stay ahead of the quickly evolving enforcement and litigation landscape. He has also defended clients from class actions in other industries, including life sciences and healthcare, and against white collar criminal and civil investigations involving antitrust, FCA, and consumer protection claims.