As reported on the Hunton Retail Law Blog, on April 26, 2021, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal on Article III standing grounds of a data breach class action predicated on an alleged increased risk of identity theft. McMorris v. Carlos Lopez & Assocs., LLC, No. 19-4310, 2021 WL 1603808 (2d Cir. Apr. 26, 2021). Notably, the district court that dismissed the action raised the issue of standing sua sponte in advance of a scheduled class settlement fairness hearing.
McMorris involved the alleged disclosure of employee information—including Social Security numbers, home addresses, dates of birth, telephone numbers, educational degrees and dates of hire—after one of the defendant’s employees accidentally emailed this information to all of the employees within the company (approximately 65).
Notably, the plaintiffs did not claim they suffered fraud or identity theft because of the inadvertent disclosure, nor did they claim their information was shared with anyone outside of the company or that third parties otherwise had taken or misused it. Nonetheless, the plaintiffs claimed they were “at imminent risk of suffering identity theft” and that they cancelled credit cards, purchased credit monitoring and identity theft protection services and spent time assessing whether they should apply for new Social Security numbers after the e-mail incident.
On those facts, the court found the plaintiffs lacked Article III standing. The court characterized the decision as one that “join[s] all [] sister circuits that have specifically addressed the issue in holding that plaintiffs may establish standing based on an increased risk of identity theft or fraud following the unauthorized disclosure of their data.” The court, however, found that the plaintiffs “failed to show that they are at a substantial risk of future identity theft or fraud sufficient to establish Article III standing” on the facts alleged.
The court articulated a “non-exhaustive” list of three factors to consider when courts are “confronted with allegations that plaintiffs are at an increased risk of identity theft or fraud based on an unauthorized data disclosure”:
- Whether the plaintiffs’ data has been exposed as the result of a targeted attempt to obtain that data;
- Whether any portion of the dataset has already been misused, even if the plaintiffs themselves have not yet experienced identity theft or fraud; and
- Whether the type of data that has been exposed is sensitive such that there is a high risk of identity theft or fraud.
Applying those factors, the court found that, despite the sensitivity of information involved, the plaintiffs did not claim their information was subject to a targeted data breach or allege any facts showing their information (or that of any others) was misused. Accordingly, the court affirmed the dismissal on Article III standing grounds.
Read the court’s full ruling.
Search
Recent Posts
Categories
- Behavioral Advertising
- Centre for Information Policy Leadership
- Children’s Privacy
- Cyber Insurance
- Cybersecurity
- Enforcement
- European Union
- Events
- FCRA
- Financial Privacy
- General
- Health Privacy
- Identity Theft
- Information Security
- International
- Marketing
- Multimedia Resources
- Online Privacy
- Security Breach
- U.S. Federal Law
- U.S. State Law
- U.S. State Privacy
- Workplace Privacy
Tags
- Aaron Simpson
- Accountability
- Adequacy
- Advertisement
- Advertising
- American Privacy Rights Act
- Anna Pateraki
- Anonymization
- Anti-terrorism
- APEC
- Apple Inc.
- Argentina
- Arkansas
- Article 29 Working Party
- Artificial Intelligence
- Australia
- Austria
- Automated Decisionmaking
- Baltimore
- Bankruptcy
- Belgium
- Biden Administration
- Big Data
- Binding Corporate Rules
- Biometric Data
- Blockchain
- Bojana Bellamy
- Brazil
- Brexit
- British Columbia
- Brittany Bacon
- Brussels
- Business Associate Agreement
- BYOD
- California
- CAN-SPAM
- Canada
- Cayman Islands
- CCPA
- CCTV
- Chile
- China
- Chinese Taipei
- Christopher Graham
- CIPA
- Class Action
- Clinical Trial
- Cloud
- Cloud Computing
- CNIL
- Colombia
- Colorado
- Commodity Futures Trading Commission
- Compliance
- Computer Fraud and Abuse Act
- Congress
- Connecticut
- Consent
- Consent Order
- Consumer Protection
- Cookies
- COPPA
- Coronavirus/COVID-19
- Council of Europe
- Council of the European Union
- Court of Justice of the European Union
- CPPA
- CPRA
- Credit Monitoring
- Credit Report
- Criminal Law
- Critical Infrastructure
- Croatia
- Cross-Border Data Flow
- Cross-Border Data Transfer Flow
- Cyber Attack
- Cybersecurity
- Cybersecurity and Infrastructure Security Agency
- Data Brokers
- Data Controller
- Data Localization
- Data Privacy Framework
- Data Processor
- Data Protection Act
- Data Protection Authority
- Data Protection Impact Assessment
- Data Transfer
- David Dumont
- David Vladeck
- Delaware
- Denmark
- Department of Commerce
- Department of Health and Human Services
- Department of Homeland Security
- Department of Justice
- Department of the Treasury
- Department of Treasury
- Disclosure
- District of Columbia
- Do Not Call
- Do Not Track
- Dobbs
- Dodd-Frank Act
- DPIA
- E-Privacy
- E-Privacy Directive
- Ecuador
- Ed Tech
- Edith Ramirez
- Electronic Communications Privacy Act
- Electronic Privacy Information Center
- Elizabeth Denham
- Employee Monitoring
- Encryption
- ENISA
- EU Data Protection Directive
- EU Member States
- European Commission
- European Data Protection Board
- European Data Protection Supervisor
- European Parliament
- Facial Recognition
- Facial Recognition Technology
- FACTA
- Fair Information Practice Principles
- Federal Aviation Administration
- Federal Bureau of Investigation
- Federal Communications Commission
- Federal Data Protection Act
- Federal Trade Commission
- FERC
- FinTech
- Florida
- Food and Drug Administration
- Foreign Intelligence Surveillance Act
- France
- Franchise
- Fred Cate
- Freedom of Information Act
- Freedom of Speech
- Fundamental Rights
- GDPR
- Geofencing
- Geolocation
- Georgia
- Germany
- Global Privacy Assembly
- Global Privacy Enforcement Network
- Gramm Leach Bliley Act
- Hacker
- Hawaii
- Health Data
- Health Information
- HIPAA
- HITECH Act
- Hong Kong
- House of Representatives
- Hungary
- Illinois
- India
- Indiana
- Indonesia
- Information Commissioners Office
- Information Sharing
- Insurance Provider
- Internal Revenue Service
- International Association of Privacy Professionals
- International Commissioners Office
- Internet
- Internet of Things
- IP Address
- Ireland
- Israel
- Italy
- Jacob Kohnstamm
- Japan
- Jason Beach
- Jay Rockefeller
- Jenna Rode
- Jennifer Stoddart
- Jersey
- Jessica Rich
- John Delionado
- John Edwards
- Kentucky
- Korea
- Latin America
- Laura Leonard
- Law Enforcement
- Lawrence Strickling
- Legislation
- Legislature
- Liability
- Lisa Sotto
- Litigation
- Location-Based Services
- London
- Madrid Resolution
- Maine
- Malaysia
- Marketing
- Markus Heyder
- Maryland
- Massachusetts
- Mexico
- Microsoft
- Minnesota
- Mobile App
- Mobile Device
- Montana
- Morocco
- MySpace
- Natascha Gerlach
- National Institute of Standards and Technology
- National Labor Relations Board
- National Science and Technology Council
- National Security
- National Security Agency
- National Telecommunications and Information Administration
- Nebraska
- NEDPA
- Netherlands
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- New Zealand
- Nigeria
- Ninth Circuit
- North Carolina
- Norway
- Obama Administration
- OECD
- Office for Civil Rights
- Office of Foreign Assets Control
- Ohio
- Online Behavioral Advertising
- Opt-In Consent
- Oregon
- Outsourcing
- Pakistan
- Parental Consent
- Paul Tiao
- Payment Card
- PCI DSS
- Penalty
- Pennsylvania
- Personal Data
- Personal Health Information
- Personal Information
- Personally Identifiable Information
- Peru
- Philippines
- Phyllis Marcus
- Poland
- PRISM
- Privacy By Design
- Privacy Policy
- Privacy Rights
- Privacy Rule
- Privacy Shield
- Protected Health Information
- Ransomware
- Record Retention
- Red Flags Rule
- Rhode Island
- Richard Thomas
- Right to Be Forgotten
- Right to Privacy
- Risk-Based Approach
- Rosemary Jay
- Russia
- Safe Harbor
- Sanctions
- Schrems
- Scott Kimpel
- Securities and Exchange Commission
- Security Rule
- Senate
- Serbia
- Service Provider
- Singapore
- Smart Grid
- Smart Metering
- Social Media
- Social Security Number
- South Africa
- South Carolina
- South Korea
- Spain
- Spyware
- Standard Contractual Clauses
- State Attorneys General
- Steven Haas
- Stick With Security Series
- Stored Communications Act
- Student Data
- Supreme Court
- Surveillance
- Sweden
- Switzerland
- Taiwan
- Targeted Advertising
- Telecommunications
- telemarketing
- Telephone Consumer Protection Act
- Tennessee
- Terry McAuliffe
- Texas
- Text Message
- Thailand
- Transparency
- Transportation Security Administration
- Trump Administration
- United Arab Emirates
- United Kingdom
- United States
- Unmanned Aircraft Systems
- Uruguay
- Utah
- Vermont
- Video Privacy Protection Act
- Video Surveillance
- Virginia
- Viviane Reding
- Washington
- WeProtect Global Alliance
- Whistleblowing
- Wireless Network
- Wiretap
- ZIP Code