23andMe Debtors Win Dismissal of California AG’s State Court Suit Seeking Damages Over Data Breach

Paul, Weiss secured a major victory in connection with 23andMe’s bankruptcy when the U.S. Bankruptcy Court for the Eastern District of Missouri granted our motion to enjoin the state of California’s suit against the debtors, brought in state court.

Paul, Weiss represents the debtors in 23andMe’s chapter 11 bankruptcy, in which California and 42 other states (including Washington, D.C.) had filed proofs of claim seeking billions in civil penalties for alleged violations of various state data privacy and consumer protection statutes arising out of a 2023 cybersecurity incident involving 23andMe. On May 27, while proceedings on its proofs of claim were ongoing, California sued the debtors in state court.

Within three days, Paul, Weiss moved on an emergency basis to enjoin the suit as a violation of various provisions of the debtors’ confirmed chapter 11 plan. Following argument on June 8, the court granted the motion in relevant part, finding the plan barred California from pursuing monetary relief against the debtors in state court, and required California to dismiss its suit entirely or amend the complaint to dismiss all claims for monetary relief against the debtors.

The Paul, Weiss team is led by partners William Clareman, who argued the motion, Christopher Hopkins, Paul Basta, John Carlin and Jeffrey Recher, and includes, among others, restructuring counsel Jessica Choi.