Plaintiffs seeking to pursue negligence claims for the disclosure of their personal information in a data breach often face hurdles in pleading a sufficient injury. The claimants’ failure to plead a sufficient injury frequently is the basis for dismissal. However, in a very interesting recent decision, the Georgia Supreme Court reversed the intermediate appellate court’s affirmance of the dismissal of the plaintiffs’ data breach claims, finding that the claimants had sufficient standing to assert their claims where they alleged that the disclosure of their personal information left them at an “imminent and substantial risk of identity theft.” As discussed below, the Court’s holding arguably makes data breach claims under Georgia law less susceptible to dismissal. However, as also discussed below, there are important limitations to the Court’s holding.
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Ninth Circuit’s Standing Ruling in Remanded Spokeo Case Could Boost Plaintiffs
As courts have wrestled with standing issues in a variety of kinds of cases, the central question has been whether or not under the standard the U.S. Supreme Court enunciated in the Spokeo case the plaintiff alleged an injury that is sufficiently “concrete.” The Supreme Court remanded the Spokeo case itself to the Ninth Circuit for further proceedings to determine whether the plaintiff’s allegations met the high court’s standard. On August 15, 2017, the Ninth Circuit issued its ruling in the remanded case that the injury the plaintiff alleged was sufficiently concrete to meet the Supreme Court’s test. This ruling could boost plaintiffs as they seek to resist defendants’ efforts for an early dismissal in cases in which plaintiffs are alleging a statutory violation, such as Fair Credit Reporting Act (FCRA) cases, Telephone Consumer Protection Act cases, and Truth in Lending Act cases. The Ninth Circuit’s opinion can be found here.
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Deepening Circuit Split on Data Breach Suit Standing
In the latest decision in which class action consumer data breach claimants have been successful in establishing the requisite standing to pursue their claims, on August 1, 2017, the D.C. Circuit held that the claimants’ risk of future harm is sufficient to meet Article III standing requirements. This decision is the latest in a growing number of federal circuit decisions finding that data breach claimants have satisfied standing requirements, but it also deepens a circuit split that could mean eventual U.S. Supreme Court review of the issue. The D.C. Circuit’s August 1 opinion in the Attias v. Care First case can be found here.
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Sixth Circuit: Data Breach Victims’ Heightened Risk of Future Harm Establishes Article III Standing
One of defendants’ most significant arguments in opposing data breach victims’ negligence and breach of privacy claims has been that the claimants that have not suffered actual fraud or identity theft can show no cognizable injury and therefore lack Article III standing to assert their claims. Appellate decisions in the Seventh and Ninth Circuit have previously taken a bite out of this defense, in rulings holding that the victims’ fear of future harm is sufficient to establish standing. Now the Sixth Circuit in a case involving alleged victims of a data breach at Nationwide Mutual Insurance Company has joined these other circuits, holding that the claimants’ heightened risk for fraud and mitigation costs were sufficient to establish Article III standing. The Sixth Circuit’s September 12, 2016 opinion, which can be found here, represents the latest in a series of developments evincing courts’ increasing willingness to recognize fear of potential future harm as sufficient to establish standing, which in turn may make it easier for the plaintiffs’ claims in these kinds of data breach cases to go forward.
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U.S. Supreme Court: To Establish Standing, Statutory Claimant Must Allege “Concrete” Injury
In a closely-watched case, the U.S. Supreme Court held that to establish standing to sue, a claimant who alleged that inaccurate information on the Spokeo website about him violated the Fair Credit Reporting Act must show that the supposed FCRA violation caused him “concrete” harm. Defense-side advocates had hoped that the Court would strike down the plaintiffs’ claims in the case and help stem the flow of proliferating “no injury” class action litigation under the FCRA and other federal statutes such as the TCPA and the ADA. However, the Court’s did not strike down the plaintiffs’ claim, but instead remanded the case for the Ninth Circuit to determine whether or not the claimant’s allegations met the “concrete harm” requirements to establish standing. Though the holding is narrow, there is language in the Court’s opinion that may prove helpful for defendants in other cases. A copy of the Court’s May 16, 2016 opinion in Spokeo, Inc. v. Robins can be found here.
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Why the Supreme Court’s Recent Class Action Decision is Important and What May Be Coming Next
After the Supreme Court issued its decision last week in Campbell-Ewald Co. v. Gomez (here), in at least some quarters the story about the decision spread under the heading that the Court had issued an important Telephone Consumer Protection Act ruling. The case in which the Court issued its decision does indeed involve a TCPA damages claim. However, the Court’s analysis did not address the plaintiff’s TCPA claim as such. The Court’s ruling – which addressed the issue of whether or not an unaccepted offer of judgment moots a class action plaintiff’s claim – is nevertheless important.
As discussed below, the Court’s ruling in the Campbell-Ewald case sets the stage for further litigation on the question of whether, by taking a different approach than the defendant did here, class action defendants might yet be able to moot a class action suit by “picking off” the named plaintiff’s claim. The Court’s decision in the Campbell-Ewald case may also prefigure the Court’s consideration of standing issues in the Spokeo case, another case that raises basic justiciability issues and that remains pending on the Court’s docket for this term.
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Creditors’ Rights to Pursue Derivative Claims against Company Directors Under Delaware Law
In a detailed May 4, 2015 opinion (here), Vice Chancellor Travis Laster of the Delaware Chancery Court extensively reviewed the rights of an insolvent company’s creditors to pursue derivative claims against the company’s directors. As Francis Pileggi put it in a May 6, 2015 post on his Delaware Corporate and Commercial Litigation blog
New Supreme Court Case Could Have Huge Impact on Class Action Litigation
On April 27, 2015, in a development that could have significant implications for a wide variety of class action lawsuits, the United States Supreme Court granted the petition of for a writ of certiorari of online search firm Spokeo. The cert grant sets the stage for the Court