Prior to 3.1, Rails didn't have built-in support for password hashing or user auth beyond http auth, so it was handled by libraries (like devise or authlogic), generated code (such as with restful-auth, which was popular in 2007), or custom code. I don't think it's very common for legacy codebases to be migrated to has_secure_password, but it's not impossible. There is not built in migration for has_secure_password, AFAIK.

LivingSocial is a big enough company I wouldn't be surprised if their authentication code was all or mostly custom.