‘Discovery’ emerged due to the Coupang incident… It became a key strategy in U.S. court damages litigation [Evidence discovery system, changing the game]

Class action lawsuit begins in earnest in the U.S.
Consumer and shareholder lawsuits are also underway.

As a collective damages lawsuit is being pursued in the United States surrounding Coupang's large-scale personal information leak, the 'discovery (evidence discovery)' system is attracting attention as a key procedure that will determine the success or failure of the lawsuit. There are predictions that the U.S.-style litigation structure, which, unlike in Korea, allows forcibly securing internal company data, will be a watershed in dividing the scope of responsibility of Coupang's headquarters.

According to the legal community on the 23rd, SJKP, the U.S. branch of Daeryun Law Firm, plans to file a consumer class action lawsuit against Coupang Inc, Coupang's parent company, in New York federal court at the end of this month or early next year after completing the recruitment of plaintiffs. Daeryun explains that the core of the lawsuit is to determine whether the headquarters was responsible for security investment and internal control rather than the personal information leak itself. Coupang I&C, listed on the U.S. stock exchange, is the parent company that owns 100% of Coupang Korea Corporation.

The strategy put forward by SJKP is the American discovery system. Discovery is a process in which documents and electronic information held by the other party are compulsorily submitted prior to the trial on the merits, and can even include company internal data such as board meeting minutes, internal reporting data, security budget decision documents, and email and messenger records from the incident response process. SJKP's position is that through this, it will confirm whether Coupang's headquarters took appropriate response or management/supervision measures after the personal information leak incident.

The legal world believes that discovery itself can be a significant burden on companies. Kang Dong-hee, an attorney at Yoon & Yang Law Firm, explained, “Unlike Korea’s document submission order, U.S. discovery allows for extensive internal data acquisition and even includes testimony from executives and employees in the process,” adding, “It can also be used as a means of pressuring companies to reach an early agreement.”

Some analyzes say that Discovery's impact could be greater in shareholder class action lawsuits than in consumer lawsuits. Lee Eun-woo, a lawyer at Hyangyang Law Firm, said, “Discovery means preserving related data rather than deleting it before the full-scale evidence begins,” and predicted, “In this case, the impact through a shareholder class action lawsuit may be greater than that of the victims of domestic information leaks.”

As a shareholder class action lawsuit is a case in which the amount of damage is large and law firms invest intensive manpower and resources, the explanation is that internal documents and the contents of witness interviews secured through a full-scale discovery process after the data freeze can be key evidence in determining who is responsible.

Currently, in the United States, apart from consumer lawsuits, a class action lawsuit is being pursued centered on shareholders who suffered damage from the stock price drop due to Coupang's personal information leak. We the People Law Firm has begun recruiting litigants to file a shareholder class action lawsuit in New York federal court, and is considering the timing of recognition of the information leak incident and whether there is a delay in disclosure as key issues.

The law firm believes that Coupang did not fulfill its obligation to disclose personal information in a timely manner as required by the U.S. Securities and Exchange Commission (SEC) even though it was aware of the personal information leak. In addition, in the business report submitted in February of this year, it is said that key information regarding the 'possibility of cyber security threats having a significant impact on the company' was falsely or poorly disclosed.

If a company's reputation or customer trust is damaged due to a cyber security incident, the SEC considers it a 'serious incident' and stipulates that it is subject to disclosure. The legal community believes that the possibility that failure to disclose the leak in time or to minimize the risk may fall under these standards cannot be ruled out.

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'Discovery' emerged due to the Coupang incident... It became a key strategy in U.S. court damages lawsuits [Evidence discovery system, changing the game] (Shortcut)