NC gas station sues Colonial Pipeline over ransomware shutdown, ensuing chaos at pumps
A gas station on the North Carolina coast is leading the charge against Colonial Pipeline after a cyberattack in May stunted operations that led to turmoil at pumps across the Southeast.
EZ Mart in Wilmington filed a proposed class action against Colonial on Monday seeking to represent more than 11,000 gas stations impacted by the shutdown. Attorneys for the proposed class said Colonial failed to properly safeguard its systems against a ransomware attack despite significant warnings.
“Because of the six-day shutdown, owners of gas stations ran out of gasoline to sell to their customers and suffered a loss of revenue,” the attorneys said.
A representative from Colonial told McClatchy News in a statement Tuesday they are aware of the lawsuit.
“While we cannot comment on pending litigation, Colonial Pipeline worked around the clock to safely restart our pipeline system following the cyberattack against our company,” the spokesperson said.
EZ Mart sits off Castle Hayne Road in Wilmington. The gas station with two pumps and a convenience mart has been owned and operated by Abeer Darwich and Ahmad “Eddie” Darwich for 11 years.
According to the lawsuit, the couple first heard about the shutdown on May 10 — three days after Colonial announced it had been hit by a cyberattack and needed to take some systems offline.
Colonial operates one of the largest pipelines in the United States and is responsible for about 45% of the fuel supply on the East Coast, Reuters reported.
The FBI said a hacker group known as DarkSide was responsible for the attack. The group is known to use a “double extortion” method in which it encrypts victims’ data and threatens to make it public if they don’t pay a ransom. Colonial was later reported to have paid the nearly $5 million ransom almost immediately after the hack was discovered.
But the shutdown lasted six days, with Colonial announcing plans to restart operations on May 12.
Monday’s lawsuit called it a “sudden and calamitous event.” More than half of North Carolina’s gas stations were still out of fuel by May 16, The News & Observer reported. Those that still had supply were plagued by long lines and reports of price gouging. At least one person reported paying $9.99 a gallon at a Charlotte-area Exxon.
Gas prices dipped back down as the fuel supply began to recover around May 18. But the damage was already done.
EZ Mart said it sold the last of its fuel on May 12 and covered the pumps with plastic bags to signal they were out. According to Monday’s lawsuit, the pumps weren’t full again until May 21.
In the meantime, attorneys said, sales at the convenience store dropped “precipitously” — even as the region readied for tourist season and an influx of drivers passing through.
Attorneys for the proposed class of gas stations said the ransomware attack was “entirely avoidable” and Colonial should have had basic protections in place.
Instead, they said Colonial ignored repeated attempts from the Transportation Security Administration to conduct security assessments.
“The danger of an attack on pipeline facilities was discussed as a national security risk as early as 2000 and the risk of a cyber-attack on pipelines, like this ransomware attack, was discussed in congressional testimony as early as 2011 and 2012,” attorney John Green said in the news release.
Monday’s lawsuit makes claims for negligence and seeks a judge’s order finding Colonial’s cybersecurity measures were inadequate and should be corrected to prevent another attack.
The proposed class action was brought by the Rhine Law Firm in Wilmington as well as attorneys with Morgan & Morgan, Wallace & Graham PA and Hall & Green Law.
