Fla. Courts Require Actual Injury to Demonstrate Standing in Data Breach Cases

Nicole Rekant and Stevan Pardo write:

The proliferation of data breach cases in Florida courts has focused on Article III standing. To meet the pleading standard under Article III, a plaintiff must allege sufficient facts to show the injury-in-fact is concrete, particularized, actual, and imminent, not conjectural or hypothetical. An allegation of imminent injury may suffice if the threatened injury is “certainly impending” or there is a “substantial risk” harm will occur, as in Clapper v. Amnesty International USA, 568 U.S. 398, 414 n.5 (2013). The injury alleged also must be “fairly traceable to the challenged action of the defendant,” see Resnick v. AvMed, 693 F. 3d 1317 (11thCir. 2012). A showing that a plaintiff’s injury is indirectly caused by a defendant’s actions satisfies the fairly traceable requirement under Resnick. However, allegations of possible future injury are not sufficient. Eleventh Circuit data breach cases such as Resnick established the legal principle that a plaintiff who alleges only speculative, not actual, identity theft will not have standing.

For those who didn’t know this already, one of thedarkoverlord’s hacks wound up in court with an opinion unfavorable to plaintiffs on Article III standing:

Florida cases continue to maintain this threshold for standing. In Stapleton on behalf of C.P. v. Tampa Bay Surgery Center, 2017 WL 3732102 (M.D. Fla. Aug. 30, 2017), a hacker breached a surgery center’s database and published 142,000 patients’ sensitive information online. The plaintiffs did not allege that any of the sensitive information was used. Instead, they alleged they were at an increased risk of having their identity stolen and were forced to incur credit monitoring/identity theft protection costs. After the data breach, the center provided free identity protection services to the plaintiffs and other potentially affected patients.

The court found that the plaintiffs’ allegations were insufficient to show an injury was certainly impending or that they had a substantial risk of imminent injury. First, the plaintiffs were unable to identify a single patient whose sensitive information was misused as a result of the data breach. Second, the center lessened the plaintiffs’ risks of imminent injury by providing free credit monitoring to all potentially affected persons. Third, the court concluded that the plaintiffs’ allegations relied on a chain of inferences that were too attenuated to constitute imminent harm. The plaintiffs asked the court to find that their sensitive information was viewed online, that someone downloaded that information and would use it, and that the center’s protections would not prevent the misuse. The court did not find an injury was impending and dismissed the amended complaint.

Maybe I should go back and take a closer look at that case. Did the court know that the database had been dumped by the hackers, so that it was possibly in many people’s hands? Would that increase the risk of imminent injury? As I reported on May 4, 2017 when the hackers publicly dumped the database and tweeted a link to it:

The .csv-formatted database contains more than 142,000 patients records. And yes, date of birth and SSN were in plain text. There did not appear to be any health insurance information in this particular database.

So the entity provided credit monitoring services? So what if they did? With all that personal information in plain text and available for download, nothing stops criminals or bad actors from sitting on the information until the year is over and then starting to misuse it. But of course, the defense would argue that that is not “imminent” injury, and hence, there is no Article III standing.

Somehow this system continues to not work well for consumers. And somehow, Congress, in its perpetual ineffective dysglory, continues to not address the concerns.

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