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Major Workers’ Comp Insurers|Hacked Legal Files, Class Claims

LOS ANGELES (CN) - Major worker's compensation insurers, including a Berkshire Hathaway company, hacked into thousands of confidential legal files to save money on judgments and settlements, an Angeleno claims in a federal class action.

Hector Casillas claims the insurers "hacked into privileged and confidential litigation files of thousands of individuals litigating worker's compensation cases against them. The defendants stole these files from servers used by law firms representing the individual litigants and used the illegally obtained information to obtain a litigation advantage."

The insurance company defendants are Berkshire Hathaway Homestate Companies, Cypress Insurance and Zenith Insurance. Other corporate defendants are Broadspire Claims Services and the Knox Ricksen law firm.

Also named as defendants are attorneys Eric Danowitz, Daniel Sharp, Russell Ching and Stella Mendoza, Berkshire Hathaway Homestate Companies investigator William Reynolds and Zenith employee Oliver Glover.

"Their corrupt conduct evidenced a total disregard for the integrity of the judicial system," Casillas says in the June 23 complaint.

It continues: "The American system of justice depends upon fair play in an impartial forum. A fair and impartial forum for rich and poor alike is [a] central feature of the American way of life and is important to our national reputation."

Casillas claims the insurers hacked into tens of thousands legal files, including about 5,000 from Reyes & Barsoum, a prominent worker's compensation law firm in California.

Casillas, a client of Reyes & Barsoum, says the lawsuit "is directed against those powerful insurance companies and their co-conspirators who, because of their immense wealth and power, acted as if they were above the law."

The insurers are among the nation's largest underwriters of worker's compensation insurance and provide coverage for a large percentage of workers in California, Casillas says.

He claims they hired investigators who "hacked into and stole stored confidential attorney-client files in cases in which they were the insurer" and hired Knox Ricksen, which "willingly and knowingly participated" in the scheme, to gain a legal advantage.

He claims that attorneys for Reyes & Barsoum first suspected the hacking during an April 20, 2014 hearing when attorneys Ching and Mendoza revealed they had Casillas' "attorney-privileged intake packet" that bore Rony M. Barsoum's name at the top of the first page and contained the retainer agreement Casillas had signed.

When the judge asked how Ching and Mendoza had obtained the confidential file, they gave several explanations before saying they didn't know, Casillas says.

The judge declared the documents to be protected by attorney-client privilege and ordered Ching and Mendoza to turn them over to Reyes & Barsoum, along with any others that might turn up after a "diligent search," the complaint states.

Defendant Danowitz later told law firm partner Jorge Reyes that the confidential documents were downloaded from the website for HG Sign-Up Services, with whom Reyes & Barsoum have an agreement to provide services for clients who can't come to the law office due to financial, physical or transportation reasons, Casillas says.

He claims that defendant investigators Reynolds and Glover worked for the insurers and "implemented a scheme to wrongfully engage in continuous cyber attacks over a period of years" to obtain and use thousands of confidential documents to gain a legal advantage and "save huge sums in judgments or settlements."

Casillas says all of the defendants conspired in the hacking scheme on a nationwide basis.

He seeks class certification, disgorgement, an injunction and exemplary damages for fraud, conversion, invasion of privacy, interference with prospective economic advantage, and violations of the Stored Communications Act, the Electronic Privacy Act, California's Business and Professions Code and the state's Computer Data Access and Fraud Act.

He is represented by Mark Ravis, who was not immediately available for comment Tuesday. Nor were representatives for Reyes & Barsoum or Knox Ricksen.

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