On October 1, the Eastern District of North Carolina dismissed a putative data breach class action because the plaintiffs failed to allege facts showing that their stolen data had actually been used (or was likely to be used) in identity theft or fraud, thus precluding their ability to establish injury-in-fact.
- The plaintiffs, participants in a health benefits plan administered by the defendants, brought claims on behalf of themselves and nearly 18,000 other plan participants following an August 2017 data breach that resulted in the potential exposure of plan participants’ personally identifiable information (“PII”).
- Following the breach, some of the plaintiffs stopped making 401(k) contributions and others received multiple unauthorized credit inquiries on their credit reports.
- Plaintiffs alleged, among other things, that defendants’ negligence in allowing the data breach caused them injuries in the form of: (1) loss of opportunity to control their own PII; (2) diminution in the value of their PII; (3) out-of-pocket costs associated with the prevention of identity theft or fraud; (4) lost wages and productivity opportunity costs resulting from their efforts to address and mitigate actual and future consequences of the breach; (5) unauthorized use of stolen PII; and (6) continued risk to their PII.
- The court held that none of these alleged injuries was sufficiently concrete to constitute an injury-in-fact under Article III, reasoning that “the mere compromise of personal information without more, fails to satisfy the injury-in-fact element” of Article III standing.
- Specifically, the court found that the alleged injuries of out-of-pocket costs and opportunity costs were “self-imposed harms in response to a speculative threat” that could not serve as a basis for injury-in-fact and that the remaining injury theories—including the unauthorized credit inquiries 18 months after the breach—were too speculative to give rise to Article III standing.
- The case is Kimbriel et al. v. ABB, Inc. et al. Read more here.
