Seventh Circuit Affirms Dismissal of Schnuck Markets Data Breach Lawsuit

Ashley Miller writes:

The United States Court of Appeals for the Seventh Circuit recently affirmed the dismissal of a putative class action brought by financial institutions against Schnuck Markets, Inc., following a data breach impacting Schnuck beginning late 2012. The plaintiffs attempted to assert claims of negligence, negligence per se, various contract claims, and violation of Illinois consumer protection laws, alleging damages in the form of employee time to investigate and resolve fraud claims, payments to indemnify customers for fraudulent charges, and lost interest and transaction fees based on changes in customer card usages.

The principal issue in the case centered on interpretation of the economic loss rule (“ELR”), and “whether Illinois or Missouri tort law offers a remedy to card-holders’ banks against a retail merchant who suffered a data breach, above and beyond the remedies provided by the network of contracts that link merchants, card-processors, banks, and card brands to enable electronic card payments.”

Read more on Alston & Bird Privacy & Data Security Blog.

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