Judge Thomas W. Thrash Jr. of the U.S. District Court of Georgia permanently shelved a derivative suit brought by shareholders of Home Depot.
Home Depot is a multinational home improvement retailer. In September, 2014, Home Depot suffered a data breach that resulted in $192 million in net losses. This breach followed the widely publicized data breaches at several other major retailers and department stores.
Shareholder plaintiffs argued that defendants should have installed basic network security infrastructure to prevent the breach. Specifically, plaintiffs asserted that Home Depot failed to have a firewall, a properly maintained malware and antivirus software, and a policy to regularly test the network and delete cardholder data. This failure was allegedly a breach of Home Depot’s duties of care and loyalty, a waste of corporate assets, and a violation of the Securities Exchange Act, according to plaintiffs.
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