Court denies motions to dismiss in PowerSchool Data Breach Litigation

Hausfeld secured a significant ruling in In re: PowerSchool Holdings, Inc. and PowerSchool Group, LLC Customer Security Breach Litigation, MDL No. 3149 (S.D. Cal.), a multidistrict litigation arising from a massive data breach of PowerSchool’s platforms that compromised the personal data of over 50 million students and educators across the United States.

The Court recently denied defendants’ motions to dismiss, including challenges to plaintiffs’ Article III standing and attempts to dismiss certain categories of plaintiffs at the pleading stage. The Court also denied the motion to dismiss filed by private equity firm Bain Capital, allowing claims to proceed based on allegations that Bain exercised operational control over PowerSchool and made decisions affecting cybersecurity operations that contributed to the data breach. The Court allowed plaintiffs’ claims for negligence, unjust enrichment, and violations of California’s Unfair Competition Law to move forward under agency, direct liability, and aiding-and-abetting theories.

These rulings represent an important step in the litigation and may have broader implications for holding private equity firms accountable when operational decisions contribute to cybersecurity failures and data breaches.

Hausfeld partner James J. Pizzirusso serves as Co-Lead Counsel in the litigation.