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Lawsuit Against Colonial Pipeline Claims Drivers Should Be Compensated Following Gas Outage

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Lawsuit Against Colonial Pipeline Claims Drivers Should Be Compensated Following Gas Outage

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When one of the largest gas pipelines in the country, Colonial Pipeline Company based in Alpharetta, Georgia, experienced a debilitating cyberattack in May of 2021, the company responded by shutting down its primary pipeline system, shutting off access to 45% of the gasoline, jet fuel, and diesel used on the East Coast, according to Politico. As a result, East Coast drivers particularly in the south were faced with skyrocketing gas prices.

North Carolina resident Ramon Dickerson filed a class action lawsuit against the company, alleging that if Colonial Pipeline had taken adequate cybersecurity measures prior to the attack, the ransomware attack could have been prevented and East Coast drivers would not have had to pay nearly as much for gas during the outage. If the lawsuit is approved to move forward, the class will include drivers who purchased gas at higher prices affected by the Colonial Pipeline outage.

The problems began when Colonial Pipeline experienced a ransomware attack on their information technology systems.

Reportedly in an effort to mitigate potential damage caused by the cybersecurity breach, Colonial Pipeline took additional unaffected systems offline, including those that controlled gasoline supply. This cyberattack is thought to have been perpetrated by Darkside, an Eastern-European-based criminal collective. Ransomware attacks work by locking up computer systems using encrypted data that the victim then has to pay to have un-encrypted, effectively holding the affected system hostage until the ransom has been paid. Colonial paid Darkside $4.4 million to restore symptoms, but not before countless drivers on the East Coast were hit with sky-high gas prices as a result of the temporary outage.

The average gas price soared higher than it had been since 2014.

By Wednesday, May 12th, the average national gas price was driven to $3.01, according to USA Today, marking the first time national prices exceeded $3 in the last seven years. In fear of a long-lasting gas outage and ever-rising prices, many Southeastern drivers rushed to purchase and store as much gas as possible while Colonial Pipeline worked to turn their systems back on. During this time, even drivers who did not stockpile gas were forced to pay for gas at approximately 8 cents/gallon more than before the ransomware attack.

In Ramon Dickerson’s proposed lawsuit, he claims that drivers would not have suffered this additional expense had Colonial Pipeline exercised better caution and cybersecurity tactics. For this reason, Dickerson argues that the company should be required to compensate drivers who were forced to pay more than usual to fuel their vehicles. This lawsuit is a proposed class action, which, if approved, could mean that any drivers affected financially by the gas outage are eligible to seek compensation in some form from the company.

The ransomware attack on Colonial Pipeline and the resulting chaos has already led the Department of Homeland Security to issue new cybersecurity regulations, ideally halting any future similar attacks by removing the voluntary nature of the existing security regulations.

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