Attorneys Kim Jung-sun (left) and Gil Byung-jun of the U.S. law firm SJKP hold a press conference in front of the U.S. District Court for the Eastern District of New York in Brooklyn, New York, on Dec. 1 local time. SJKP is the local partner firm of Daeryun, the law firm pursuing a class action in the United States on behalf of victims of the Coupang data breach. New York — Yoon Kyung-hwan, Correspondent
NEW YORK — “I really don’t understand what the Coupang case has to do with the Eastern District of New York. This court is busy too. Do we have to rule on a case in which nothing happened in the United States?”
The remarks came in a courtroom at the U.S. District Court for the Eastern District of New York in Brooklyn on the 1st, at the first hearing in a U.S. class action tied to Coupang, which drew controversy in November last year after the personal data of 33.79 million Korean users was compromised. Judge Ann M. Donnelly repeatedly pressed lawyers for the plaintiffs, the data breach victims, on why they had filed in that court. Parent company Coupang Inc. is incorporated in Delaware, not New York, and keeps its actual offices in Mountain View, California. Donnelly pushed the plaintiffs’ lawyers with the suggestion that if the complaint was filed in New York because the matter involves a U.S.-listed company, the Southern District of New York in Manhattan — home to the New York Stock Exchange, where Coupang is listed — would be more appropriate. The Eastern District of New York covers three New York City boroughs, Brooklyn, Queens and Staten Island, along with two counties on Long Island. Donnelly asked repeatedly whether it is even possible to agree to Coupang’s terms of service from the United States, which entity’s platform consumers use — the U.S. parent Coupang Inc. or its Korean subsidiary — whether any of the named plaintiffs live in the Eastern District, including Queens, and whether the plaintiffs hoped to use a U.S. ruling in Korea.
The proceeding was a pre-motion conference, comparable to a preparatory hearing in Korean civil litigation. It is a session in which the judge summons plaintiffs and defendants in person to narrow the issues and set a schedule before full argument begins. It was effectively the first court proceeding held in the United States over the Coupang incident. If the judge decides to take up the case in full, a trial on the merits is expected to begin around next year.
Lawyers from the Korean firm Daeryun and its U.S. partner firm SJKP filed the suit on Feb. 6 in the Eastern District of New York on behalf of about 7,800 data breach victims in Korea and the United States, seeking roughly $5 million in damages from Coupang Inc. and founder and board Chairman Bom Kim. The core claim is that consumer rights were violated by the Coupang data leak. Kim Kook-il, Daeryun’s managing attorney, explained the rationale for suing in the United States at a news conference in Manhattan in December last year: “The United States has punitive damages, which changes the scale of compensation significantly. If Coupang’s parent has substantive access to the systems and data of its Korean subsidiary, a U.S. court can compel production of the relevant materials no matter where the servers are located.”
The U.S. District Court for the Eastern District of New York in Brooklyn, New York, on Dec. 1 local time. New York — Yoon Kyung-hwan, Correspondent
The Daeryun and SJKP lawyers pushed back against Donnelly’s string of pointed questions, arguing there was no jurisdictional problem because “Coupang Inc. is a U.S. corporation listed on the New York market, and the parent company’s leadership affects the Korean entity.” They added that Coupang Inc. reported its subsidiary’s data breach to the U.S. Securities and Exchange Commission, which they said is another reason the Eastern District of New York can handle the case. Lawyers for Coupang, the defendant, urged Donnelly strongly to “dismiss it, because this happened at the Korean subsidiary.” Their argument was that Coupang Inc. and Coupang in Korea are thoroughly separate companies, so no suit could be established in the United States in the first place. They also cited the fact that the Korean government and courts are already investigating the matter as grounds that it need not be litigated in a U.S. court. The plaintiffs, they said, were seeking a forum and a body of law favorable to themselves. One Coupang lawyer said, “You can’t even sign up for Coupang without a residential address in Korea,” adding that “holding a trial is itself a waste of time.”
The hearing ended with both sides agreeing to submit revised briefs by the 6th of next month, with the connection between the data breach and the United States emerging as the central issue. At a news conference before the hearing, SJKP attorneys Kim Jung-sun and Kil Byung-joon said the court’s choice to hold an in-person proceeding “is itself a signal that the bench sees this as a serious matter,” and criticized what they called a contradiction: “Coupang says there are no actual cases of misuse of the leaked personal information, yet it voluntarily put together a 1.685 trillion won [about $1.2 billion] compensation program.”
Coupang announced on Nov. 29 last year that information from 33.79 million customer accounts had been “exposed” rather than “leaked.” It said the affected data included names, email addresses, phone numbers, addresses and order details. Coupang later acknowledged that the data also included some customers’ building entrance door codes. Founder Kim is a U.S. citizen who moved to the United States at age 7 with his father, an expatriate employee of a large Korean company.