The Atlanta Lawyer August/September 2016 | Page 21
LEGAL MINUTE
Article III Standing Remains a Hotly Litigated Issue
within Compelling Data Privacy Breach Cases
Sam Crochet
Hall Booth Smith, P.C.
[email protected]
Due to the recent proliferation of widely publicized
data breach cases, defense attorneys have focused
heavily on early-stage motions to dismiss for lack
of Article III standing. Meanwhile, the plaintiffs' bar
has countered this approach by generating creative
theories of injury in an attempt to sidestep the constitutional requirement. In recent months, federal
courts have delivered controversial rulings on standing,
which reflect the unpredictable and ever-changing
legal framework behind the issue.
In mid-July of this year, the defense community scored
a victory in the ongoing debate as to when theft of
an individual’s data becomes a concrete injury for
purposes of establishing standing to sue. In Torres
v. Wendy's, A Florida plaintiff filed a federal class action against Wendy’s following an early-2016 data
breach. To support his case, the plaintiff claimed he
experienced two fraudulent charges on his debit card,
but offered no evidence they were not reimbursed
by his bank. The plaintiff further argued he suffered
a concrete injury due to identity theft alone, which
he contended was sufficient to trigger standing. The
Court granted Wendy's Motion to Dismiss, reasoning that, since the plaintiff did not allege personal
monetary harm stemming from the two fraudulent
charges, he failed to allege actual harm sufficient to
establish an injury-in-fact. The Court also addressed
the plaintiff's claim he had standing due to the threat
of future harm given the potential fraud and identity
theft. Traditionally, courts have ruled harm must be
"certainly impending," if it has not yet manifested,
in order to confer standing. The Court relied on this
precedent, ruling the “plaintiff’s alleged harm [was]
highly speculative and the asserted injuries [did] not
appear 'certainly impending'."
injury, is not enough to trigger standing. In June, the
New York Court denied a Motion to Dismiss where the
defendant violated a state privacy statute, even though
the harm amounted to only invasion of privacy and
unjust enrichment (no concrete financial loss).
In this case, Boelter v. Hearst Communications, Inc., the
plaintiff subscribed to the defendant's magazine. The
plaintiff alleged the defendant violated a state privacy
statute (Michigan's Video Rental Privacy Act) by selling
her personal information to a third party. The defendant immediately requested the Judge dismiss the
complaint for lack of standing, arguing the plaintiff's
allegations failed to assert a concrete injury-in-fact and
alleged only bare procedural violations of the law. In
response, the plaintiff argued the defendant's sale