class action

Standing Only Gets You So Far. Scottrade Offers Tactics to Win the Data Breach Class Action War

A recent skirmish about standing in data breach class actions (this time in the Eighth Circuit), involving securities and brokerage firm Scottrade, suggests that, even if plaintiffs win that limited question, there are other key battles that can win the war for defendants.  As we reported with Neiman Marcus, P.F. Chang’s, Nationwide, and Barnes & Noble, the Eighth Circuit’s decision in Kuhn v. Scottrade offers important proactive steps that organizations should consider taking that can mitigate post-breach litigation exposure.  READ MORE

Plaintiffs’ Lawyer Predicts $1 Billion Settlement in Data Breach Case – But Where’s the “Harm”?

This week, a high profile plaintiffs’ firm (Edelson) stated that “if done right,” the data breach class actions against Equifax should yield more than $1 billion in cash going directly to more than 143 million consumers (i.e., roughly $7 per person).

No defendant to date has paid anything close to $1 billion.  In fact, the largest class settlements in breach cases hardly get close:  Target Stores paid $10 million (cash reimbursement for actual losses) and The Home Depot paid $13 million (cash reimbursement for actual losses + credit monitoring).  Will Equifax be different?

Part of the answer revolves around the increasingly debated role and importance of “consumer harm” in resolving data breach disputes. READ MORE

Will I Get Sued After a Data Breach? D.C. Circuit Broadens Scope of Data That Gives Rise to Identity Theft in CareFirst

In the latest sign that data breach class actions are here to stay—and, indeed, growing—the D.C. Circuit resuscitated claims against health insurer CareFirst BlueCross and Blue Shield, following a 2015 breach that compromised member names, dates of birth, email addresses, and subscriber identification numbers of approximately 1.1 million individuals.  The decision aligns the second most powerful federal appellate court in the nation with pre-Spokeo decisions in Neiman Marcus and P.F. Chang and post-Spokeo decisions in other circuits (Third, Seventh, and Eleventh).  In short, an increased risk of identity theft constitutes an imminent injury-in-fact, and the risk of future injury is substantial enough to support Article III standing.

The D.C. Circuit’s holding is an important development.  First, the D.C. Circuit went beyond credit card numbers and social security numbers to expand the scope of data types that create a risk to individuals (i.e., names, birthdates, emails, and health insurance subscriber ID numbers).  Second, the decision makes clear that organizations should carefully consider the interplay between encryption (plus other technical data protection measures) and “risk of harm” exceptions to notification, including exceptions that may be available under HIPAA and GLBA statutory regimes. READ MORE

Data Breach Standing Goes Nationwide; Sixth Circuit Says Plaintiffs Have Standing to Sue

Data Breach Class Action Standing Galaria et al. v. Nationwide Mutual Insurance Company Sixth Circuit opinion

The Sixth Circuit joined the growing trend of appellate courts holding that plaintiffs had demonstrated standing for data breach class actions in Galaria et al. v. Nationwide Mutual Insurance Company.  In a recent order, the Sixth Circuit highlighted yet another fact that supports standing, that clients should consider in their post-breach response efforts:  a recommendation that consumers set up fraud alerts and place security freezes on credit reports, without an accompanying offer to pay for the security freeze itself.


7th Circuit Revives P.F. Chang’s Data Breach Class Action Suit

data breach

Last week, the Seventh Circuit revived a data breach class action against P.F. Chang’s restaurant in an important opinion that continues a plaintiff-friendly trend that began with the court’s opinion in the Neiman Marcus case that we previously reported on here.  The court used statements that P.F. Chang’s made in response to the breach and protective remediation measures it implemented to draw inferences that customers were at a risk of identity theft and harm, and then used those inferences to find that plaintiffs had standing to proceed with their litigation.  The case raises new issues that organizations should consider in crafting post-breach communications, and important takeaway lessons that may help increase the likelihood of obtaining dismissal of data breach class actions at the pleadings stage.


Germany Permits Consumer Protection Associations to File Class Actions for Violations of Data Protection Law

International Privacy Law

On December 17, 2015, the German Parliament passed a new act which permits consumer protection associations, industry and commerce chambers or other approved business associations to file privacy class actions. The law is expected to become published and be in force shortly.