Rackspace Urges Texas Court to Throw Out Lawsuit from Former Customer

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Rackspace filed a response to a lawsuit by e-commerce company i3 Brands in a Texas district court this week, asking for the suit to be dismissed or stayed.

i3 Brands is seeking more than $1 million in damages from Rackspace, saying it provided “inadequate and non-existent security” and alleging negligence and breach of contract. The lawsuit was filed at the end of January, but Rackspace was officially served on March 7.

There are a litany of errors, disputed facts and other reasons for the proceedings to be quashed, Rackspace says, including a contractual requirement for i3 Brands to seek arbitration prior to legal action in the dispute.

See also: Rackspace Bets on Multi-Cloud Boom with New Professional Services

“This frivolous lawsuit was filed shortly after Rackspace turned the customer over to collections after years of the customer consistently having a past due balance and not timely paying on its account,” Rackspace said in a comment on the lawsuit provided to the WHIR. “Rackspace was forced to suspend the customer’s account twice in 2016 due to its nonpayment.

It was only after Rackspace threatened account suspension in 2016 that the customer alleged a potential security breach. Upon an extensive investigation, Rackspace’s network security team found no evidence of a security breach in 2016, and the customer refused to submit any evidence to support its claim that a security breach had occurred. Contrary to the allegations in the lawsuit, the customer never reported an alleged security breach to Rackspace in 2014, and Rackspace has seen no evidence that the customer experienced a security breach at any time during the customer’s contract.

Additionally, after incurring a large past due balance, the customer prematurely cancelled its contract with Rackspace without notice, breaching the agreement between the parties. The customer currently owes Rackspace $266,665.68 for past due products, services and early termination fees. You can find more detailed information concerning these issues in a condensed version of the public filing, here.”

Security company Trustwave has also been fighting a former customer seeking $100,000 in damages in court over an investigation the plaintiff says failed to contain a data breach. Parts of that suit were thrown out in September, leaving Trustwave to defend itself against a reduced range of claims.

Rackspace continues to pursue enterprise customers by offering its “Fanatical Support,” and launched a new professional services offering this week to support multi-cloud adoption.

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