▲ Coupang
A legal dispute has emerged in the United States regarding a class-action lawsuit filed over a massive data breach at Coupang, with both the plaintiffs and the defendant clashing over whether a U.S. court is the appropriate venue to hold the parent company accountable for the incident.
According to the U.S. District Court for the Eastern District of New York on July 21 (local time), Coupang Inc., the parent company, and Kim Bom-suk, Chairman of the Board of Coupang Inc., requested in a letter submitted to the presiding judge earlier this month that the lawsuit seeking damages for the data breach be dismissed without a preliminary hearing.
Coupang Inc. argued that the company where the data breach occurred is a Korean entity, while they are the U.S. parent company, asserting, "It is not appropriate to handle this case in New York. This is a Korean case."
They further distanced themselves from the Korean entity, stating, "Coupang Inc. is a holding company based in Delaware with subsidiaries worldwide, and Coupang Corp. (hereinafter Korean Coupang) is merely one of them," emphasizing that they are legally distinct entities.
Coupang Inc. also claimed that the plaintiffs failed to present any factual basis suggesting that Coupang Inc. or Chairman Kim exercised control over specific security decision-making processes related to the data breach in Korea.
Furthermore, noting that multiple lawsuits regarding the data breach have already been filed in Korea, they pointed out that the plaintiffs are engaging in "forum shopping," the practice of choosing a favorable jurisdiction for a lawsuit.
Coupang is being represented by the major U.S. law firm Kirkland & Ellis.
On the other hand, the plaintiffs argued that while Coupang Inc. presents Korean Coupang as a core subsidiary to investors, it adopts a stance of ignorance regarding the subsidiary's affairs when in court.
Coupang Inc. is the parent company that holds a 100% stake in Korean Coupang.
In a rebuttal letter submitted last week, the plaintiffs argued, "One cannot introduce a Korean entity as the core of the group's operations to investors while requesting the court to treat it as a separate entity from the U.S. parent company."
The plaintiffs emphasized that since there is a dispute over the facts, the defendant's request to dismiss the case before discovery is premature. They argued that a decision on jurisdiction should be deferred at least until discovery—which involves records related to the data breach, decision-makers, internal oversight, and communications between the headquarters and the subsidiary—is conducted.
Discovery is a U.S. legal procedure that allows parties to a lawsuit to request the disclosure of evidence, documents, and witnesses held by the opposing party before the trial on the merits.
Previously, Tal Hirschberg, an attorney at the law firm SJKP representing the plaintiffs, stated during a press conference after filing the complaint in February regarding the background of filing the lawsuit in the U.S., "Coupang Inc. was established under U.S. commercial law and owes a duty to everyone who uses Coupang, including U.S. citizens as well as Koreans."
He added, "We believe that using the U.S. court system will help us obtain better information regarding what wrongdoing occurred (on Coupang's part)."
The lawsuit against Coupang in the U.S. is expected to proceed separately from the lawsuits filed in Korean courts.
It is also expected to proceed independently from the shareholder class-action lawsuit previously filed in the U.S. District Court for the Northern District of California.
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