Clapper and Data Breach Litigation


In Clapper v. Amnesty International USA, 133 S. Ct. 1138 (2013), the Supreme Court recently held that individuals claiming injury from the federal government’s right to conduct electronic surveillance under the Foreign Intelligence Surveillance Act (FISA), 50 U.S.C. § 1881a, lacked standing to pursue their claims. In reaching its holding, the Court made statements that should prove useful for data breach defendants trying to defeat claims based on a plaintiff’s lack of standing. While Clapper does not necessarily foreshadow the Court’s position on standing in data breach litigation, the decision is useful for defendants in the data breach context.

FISA allows the federal government to acquire information by authorizing the surveillance of individuals who are not “United States persons” and are reasonably believed to be located outside the United States. Surveillance under FISA is subject to judicial authorization, congressional supervision, and compliance with the Fourth Amendment.

The Clapper plaintiffs were U.S. individuals and entities – attorneys, and human rights, labor, legal, and media organizations – who claimed that they engage in sensitive international communications with individuals whom they believe are likely targets of surveillance. They filed suit seeking a declaration that FISA was unconstitutional.

The plaintiffs’ claims were dismissed for lack of standing in the District Court, but the Second Circuit reversed, stating there was an “objectively reasonable likelihood” that the plaintiffs’ communications would be intercepted. The Second Circuit also found that the plaintiffs established “present injuries in fact – economic and professional harms – stemming from a reasonable fear of future harmful government conduct.”

The claims in Clapper rested on two theories, both of which were rejected by the Supreme Court.  First, the plaintiffs claimed injury because of an objectively reasonable likelihood that their communications would be intercepted. The Court dismissed this claimed harm as too highly attenuated. Notably, the Court declared that the Second Circuit’s “objectively reasonable likelihood” standard is inconsistent with the Court’s requirement that threatened injury be certainly impending for injury in fact. For example, plaintiffs had not demonstrated that the Federal Government would: a) target the individuals with whom plaintiffs sought to communicate; b) succeed in intercepting the individuals’ communications; c) intercept such communications under § 1881a (as opposed to surveillance under another statute); and d) intercept communications between the plaintiffs and the targeted individuals.

The plaintiffs’ second theory was that they were injured because the risk of surveillance required them to take costly and burdensome countermeasures to protect the confidentiality of their communications. The Second Circuit had concluded these countermeasures constituted injury in fact, but the Supreme Court disagreed. The Court reasoned that allowing such fears to constitute injury would allow an “enterprising” plaintiff to “manufacture standing. . . based on their fears of hypothetical future harm that is not certainly impending.”

Clapper is helpful for entities defending data breach litigation, particularly in its rejection of the Second Circuit’s “objectively reasonable likelihood” standard as being incompatible with the requirement that injury be “certainly impending.” A data breach plaintiff’s complaints that his or her compromised data causes an increased danger of identity theft runs squarely into the Court’s caveats regarding standing based on an “attenuated chain of possibilities.”

Also important is the Court’s holding that a plaintiff cannot base injury on the present costs of preventing hypothetical harm that is not “certainly impending.” The Court’s reasoning is directly applicable to a data breach plaintiff’s arguments that efforts to mitigate against the possible effects of a data breach (such as the cost and inconvenience of cancelling credit cards, closing checking accounts, obtaining credit reports and purchasing identity and/or credit monitoring) are insufficient to confer standing.

Data beach plaintiffs no doubt will argue that Clapper must be confined to its facts and the FISA context, where national security considerations that are not present in data breach litigation are at issue. But Clapper’s discussion on standing is broad, and plaintiffs likely will have a difficult time cabining its standing holdings. Thus, defendants in data breach actions have a powerful weapon in Clapper, but will still have to battle arguments that would confine Clapper to its context.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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