Timothy_Bland_Overview of Regulatory Law and Industry Standards

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Bland 1 Timothy Bland John Davis INF-157-001-20819 - Cyber Law and Ethics 6 February 2023 Overview of Regulatory Law and Industry Standards Firemen's Retirement System of St. Louis v. Arne M. Sorenson (Marriott International, Inc.), 2019-0965-LWW (Del. Ch. 2021) was a case decided by the Delaware Court of Chancery. The case concerned a shareholder derivative action brought by the Firemen's Retirement System of St. Louis against Arne M. Sorenson, the CEO of Marriott International, Inc., and other executives and directors of the company. Here is a summary of the case "Firemen's Retirement System of St. Louis v. Arne M. Sorenson (Marriott International, Inc.), 2019-0965-LWW (Del. Ch. 2021)": Name of Plaintiff: Firemen's Retirement System of St. Louis. The Firemen's Retirement System of St. Louis is a retirement plan for firefighters in St. Louis, Missouri. The plan provides retirement benefits to eligible firefighters who have served the city and its residents. The system is managed by a board of trustees and is funded by contributions from the city, the firefighters, and investment returns. The Firemen's Retirement System of St. Louis aims to provide secure and adequate retirement benefits to its members and to ensure the plan's financial stability. According to Samuel et al., the system has the power to take legal action to protect its assets and the interests of its members, such as in the case Firemen's Retirement System of St. Louis v. Arne M. Sorenson (Marriott International, Inc.), where the system served as the plaintiff in a shareholder derivative action against the CEO and other executives and directors of Marriott International, Inc. The plaintiff alleged that the

Bland 2 defendants had breached their fiduciary duties to the company and its shareholders by failing to adequately monitor and manage the company's data security systems, which led to a massive data breach that compromised the personal information of millions of Marriott customers. Defendant: Arne M. Sorenson (Marriott International, Inc.) Arne M. Sorenson was the CEO of Marriott International, Inc., a multinational hospitality company that operates hotels, resorts, and residences worldwide. As the CEO of Marriott, Sorenson was responsible for overseeing the company's operations, developing and executing its strategic vision, and ensuring its financial stability. In the Firemen's Retirement System of St. Louis v. Arne M. Sorenson (Marriott International, Inc.), 2019-0965-LWW (Del. Ch. 2021), Sorenson was named as a defendant in a shareholder derivative (Samuel et al.). Where Filed: Delaware Chancery Court. The Delaware Chancery Court is widely recognized as one of the leading courts in the United States for corporate and commercial law, and courts across the country frequently cite its decisions. According to Samuel et al., the action was brought in the case Firemen's Retirement System of St. Louis v. Arne M. Sorenson (Marriott International, Inc.), 2019-0965-LWW (Del. Ch. 2021) in the Delaware Chancery Court. This was likely because Marriott International, Inc. was incorporated in Delaware, and the court's expertise in corporate law made it a natural choice for the case. The decision of the Delaware Chancery Court, in this case, is likely to be widely cited and will likely have a significant impact on how companies and their directors and officers approach data security and the handling of data breaches. Industry Defendant Represents: Hospitality (Marriott International, Inc.). Marriott International, Inc. is a major player in the global hospitality industry. In the Firemen's Retirement System of St. Louis v. Arne M. Sorenson (Marriott International, Inc.),

Bland 3 2019-0965-LWW (Del. Ch. 2021), Marriott was the defendant and was being sued by the Firemen's Retirement System of St. Louis (Samuel et al.). The lawsuit was a shareholder derivative action brought in response to a data breach at Marriott in 2018. According to Samuel et al., the breach exposed the personal information of millions of Marriott guests, including their names, addresses, phone numbers, email addresses, passport numbers, and other sensitive information. As a leading player in the hospitality industry, Marriott has a significant impact on the industry and the economy. The outcome of this lawsuit had important implications for the hospitality industry and companies that handle sensitive personal information, as it set a precedent for how companies are expected to manage data security and respond to data breaches. What are the allegations: The plaintiff, Firemen's Retirement System of St. Louis, brought a shareholder derivative lawsuit against Arne M. Sorenson, the CEO of Marriott International, Inc., and other company executives (Samuel et al.). The plaintiff alleged that the defendants failed to implement adequate cybersecurity measures, which resulted in a data breach that affected hundreds of millions of Marriott customers. The plaintiff claimed that the defendants breached their fiduciary duties to the company and its shareholders by failing to take appropriate steps to protect the company's sensitive data and information. Laws or standards cited: The plaintiff cited violations of the Delaware General Corporation Law and common law standards of care and loyalty. Damages asked for: The plaintiff sought an award of monetary damages to compensate the company for the losses it incurred due to the data breach, as well as injunctive relief to improve Marriott's cybersecurity practices (Samuel et al.). Additionally, the plaintiff sought an award of attorney's fees and costs incurred in pursuing the lawsuit. Conclusion

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Bland 4 The Delaware Court of Chancery ultimately held that the defendants were not liable for the data breach and that the plaintiff had failed to state a valid claim for breach of fiduciary duty. The court found that the defendants had taken reasonable steps to protect the company's data security and had not acted in bad faith or intentionally disregarded the company's interests. The case is notable because it addresses the issue of corporate data security and the extent to which corporate executives and directors can be held liable for data breaches that occur on their watch.

Bland 5 Works Cited Samuel, C.L. et al. (no date) Firemen's Retirement System of St. Louis v. Arne M. Sorenson (Marriott International, Inc..) , Court Listener . Available at: https://www.courtlistener.com/opinion/5287886/firemens-retirement-system-of-st-louis- v-arne-m-sorenson-marriott/?type=o&q=class%2B%2Baction %2Bcybersecurity&order_by=score%2Bdesc&stat_Precedential=on&page=2 (Accessed: February 6, 2023).

Timothy_Bland_Overview of Regulatory Law and Industry Standards

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