Cloud Computing Co. Rackspace Hit with Class Action Over Data Breach

Two Rackspace Technology Inc. clients have sued the cloud technologies provider over a data breach that occurred in early December and led to the exposure of confidential information. The Texas and New York companies seek to represent classes from both states as well as a nationwide class of individuals and entities whose information was lifted or whose businesses were interrupted as a result of the ransomware attack.

Rackspace self-describes as multi-cloud solutions expert and a leading provider of services across all the major public and private cloud technologies and who has business customers in over 120 countries. Rackspace is the world’s largest managed cloud provider, the complaint says, and offers access to such cloud offerings as Amazon Web Services, Microsoft Azure, and OpenStack.

In the early hours of Dec. 2, 2022, Rackspace reportedly discovered an issue impacting its client exchanges. Service disruptions ensued, causing Rackspace to publicize its awareness of the issue and its mitigation efforts. At some point the following day, Rackspace determined, and later acknowledged, that the forgoing events were the result of a “security incident.”

Consequently, Rackspace’s current and former clients’ personally identifying information and sensitive data “is now on the internet for anyone and everyone to acquire, access, and use for unauthorized purposes for the foreseeable future,” the suit ventures. The clients allege that the breach was foreseeable and therefore should have been prevented. In turn, they bring claims under New York and Texas law for unfair business practices as well as for breach of contract and fiduciary duty and misrepresentation.

The plaintiffs are represented by Held & Hines L.L.P.