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Hearings begin in Home Depot data breach

The beginning of the battle over the Home Depot hack attack takes place in front of an Atlanta federal judge Friday.

U. S. District Judge William Thrash has called a case management conference for 10:00 a.m., so the attorneys involved in the case can start mapping out the procedures for the case, sort out legal issues, and begin working out a calendar.  The hearing will involve Home Depot's lawyers, as well as attorneys for the credit unions, banks, and the consumers suing the retailer.

"This litigation is, I'm afraid, at the front edge of what we will be seeing lots more of," says WSB senior legal analyst Ron Carlson.  "Lawsuits claiming negligent or sloppy protection of a retail customer's sensitive financial data--that's at the heart of two major cases currently in front of the federal district judge."

Home Depot faces at least 44 civil lawsuits stemming from a massive data breach it revealed in September.  A reported 56 million customers' credit and debit card numbers, and 53 million e-mail addresses, were exposed.

"One of the major questions in front of the court will be whether Home Depot regularly updated its security systems as the sophistication of would-be hackers continued to improve," says Carlson.

Several lawsuits contend that the Atlanta-based company knew its data security was not adequate to defend against hack attacks, despite "well-publicized data breaches" at other large, national chains before it was hit.

Home Depot has since installed new encryption software that scrambles customer data so that unauthorized readers cannot see it.  They spent $43 million in the third quarter alone dealing with the data breach fallout.  Banks and credit unions combined have spent an estimated $150 million after the breach, including the costs of replacing millions of customers' cards.

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