That was the scene on Feb. 1 (local time) in a courtroom at the U.S. District Court for the Eastern District of New York in Brooklyn. At the first hearing in a U.S. class action tied to Coupang, which sparked controversy in November last year after leaking the personal information of 33.79 million Koreans, presiding Judge Ann M. Donnelly repeatedly asked lawyers for the plaintiffs — the victims — why they had filed the suit in her court. Parent company Coupang Inc. is incorporated in Delaware, not New York City, and its actual place of business is Mountain View, California. Donnelly also pressed the plaintiffs' lawyers, suggesting that if they filed in New York because the case 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 have been more appropriate. The Eastern District of New York generally covers three New York City boroughs — Brooklyn, Queens and Staten Island — and two Long Island counties, Nassau and Suffolk. Donnelly asked repeatedly whether it is even possible to agree to Coupang's terms of use in the United States, which entity's platform consumers use — U.S.-based Coupang Inc. or its Korean subsidiary Coupang — whether any of the named plaintiffs live in the Eastern District, and whether the plaintiffs hoped to use a U.S. ruling in Korea.
The proceeding was a pre-motion conference, roughly equivalent to a preparatory hearing in a Korean civil case. Ahead of full-blown arguments, the judge summons plaintiffs and defendants in person to narrow the issues and set a schedule. It was effectively the first legal proceeding held in the United States over the Coupang incident. No spectators other than reporters were present in the courtroom. If the judge decides to take up the case in earnest, a trial on the merits is expected to begin around next year.
Korean law firm Daeryun and its U.S. partner firm SJKP filed the $5 million (about 7 billion won) damages suit against Coupang Inc. and founder and board chairman Bom Kim in the Eastern District of New York on Feb. 6 on behalf of about 7,800 data breach victims in the two countries. The core claim is that the leak violated consumers' rights. Kim Kook-il, Daeryun's managing attorney, explained the rationale for suing in the U.S. at a news conference in Manhattan in December: "The United States has punitive damages, so the awards are large. If Coupang's headquarters had substantive access to the Korean subsidiary's systems and data, a U.S. court can compel the production of relevant materials regardless of where the servers are."
Lawyers for the plaintiffs from Daeryun and SJKP pushed back against Donnelly's string of pointed questions, arguing there is no jurisdictional problem. "Coupang Inc. is a U.S. corporation listed on the New York stock market, and the parent company's leadership influences the Korean entity," they said. They added that Coupang Inc. reported the subsidiary's data breach to the U.S. Securities and Exchange Commission, another reason the Eastern District of New York can handle the case.
Lawyers for defendant Coupang, by contrast, strongly urged the court to dismiss the suit, saying the incident occurred at the Korean subsidiary. Their argument was that parent Coupang Inc. and Korea's Coupang are strictly separate companies, so the suit cannot 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 case with keen interest as grounds for arguing it should not be litigated twice in a U.S. court. They further contended that the plaintiffs filed the suit to pick a forum and law favorable to them. "You can't even sign up for Coupang without a Korean residential address," one Coupang lawyer said. "Holding a trial is itself a waste of time."
With jurisdiction emerging as the central issue, Donnelly ordered both sides to submit amended briefs by March 6 and adjourned the hearing. SJKP attorneys Kim Jung-sun and Gil Byung-jun held a news conference before arguments, saying, "The court's choice to hold an in-person proceeding is itself a signal that it sees this as a serious matter." They added, "Coupang has behaved contradictorily, saying there are no actual cases of misuse (of the leaked personal information) while voluntarily setting up a 1.685 trillion won compensation program."
Coupang announced on Nov. 29 last year that information on 33.79 million customer accounts had been "exposed" rather than "leaked." It said the data included names, email addresses, phone numbers, addresses and order details. Coupang later belatedly acknowledged that the leaked data also included some customers' building entrance door codes. Founder and chairman 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 conglomerate.
