Third Circuit Offers Blueprint for Defeating Data Breach Class Actions

Jeffrey N. Rosenthal and David J. Oberly discuss how the Third Circuit offers defense attorneys a way to possibly get some data breach lawsuits dismissed. They write, in part:

Taken together, Reilly and Horizon operate to create a diving line between circumstances where standing might exist in the Third Circuit.

Under Horizon, standing can often be established where plaintiffs are able to allege violations of federal privacy law—which are considered de facto injuries, and thus sufficient to confer standing even in the absence of any economic loss or other injury

Conversely, where only common law claims are asserted, alleged injuries relating to an increased risk of fraud and identity theft (as well as costs incurred to mitigate such risks)—which involve only claims of future injuries, but where no injury or harm has occurred—may be too speculative to establish standing.

The other significant takeaway from these two cases is the Horizon court’s rejection of the use of remedial mitigation efforts to assist breach victims as evidence of an injury sufficient to establish standing.

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