United States: The Future Of Standing In Data Breach Class Actions

Last Updated: December 22 2016
Article by Christine A. Stoddard and Kristin A. Shepard

In today's world, as technology costs decrease and personal information becomes more valuable on the black market, data breaches have seemingly joined the ranks of death and taxes as certainties. Add to that litigation: companies suffering data breaches face exposure to lawsuits by consumers, employees, and even financial institutions. One particular concern for companies is the possibility of costly consumer class actions. Though such lawsuits still account for fewer than 5 percent of all class actions faced by large companies, nearly a quarter of corporate counsel expect data breach class actions to become the next big trend in litigation.

To date, data breach consumer class actions have met with mixed results in court. Standing is a common hurdle; under Article III, plaintiffs must show they have suffered concrete, particularized, and imminent harm, along with a causal relationship between the injury and the challenged action and that the injury can be redressed by a favorable decision. This can be difficult in the context of a data breach where information has been stolen but not used, leaving courts to debate whether the risk of future identity theft is sufficient to show the injury-in-fact necessary to establish standing. Many courts have found it is not, following the Supreme Court's opinion in Clapper v. Amnesty International USA, 133 S. Ct. 1138 (2013), a case dealing with the FISA Amendments Act of 2008 in which the Court found allegations of potential future injury insufficient to demonstrate standing. Recently, though, some plaintiffs have begun surviving these threshold challenges, and, by the end of last year, questions regarding standing in data breach class actions remained open. As 2016 comes to a close, it seems much is still unknown; although more appellate courts have begun weighing in on the issue, the future of the Supreme Court and eventual replacement of Justice Scalia may alter the provisional landscape.

Thus far, the Sixth and Seventh Circuits have held that consumer data breach class actions satisfied Article III's standing requirement. For example, in Remijas v. Neiman Marcus Group, LLC, No. 14-3122, and Lewert v. P.F. Chang's, No. 14–3700, the Seventh Circuit determined that customers whose credit card information was compromised established standing because they faced an imminent risk of identity theft and fraudulent charges, which are the primary reasons hackers steal data. The court also noted that the time and money spent resolving issues that had already arisen were cognizable injuries for Article III purposes. Likewise, in Galaria v. Nationwide, Nos. 15-3386/3387, the Sixth Circuit found that the substantial risk of harm of identity theft and fraud, along with mitigation costs that had already been incurred, sufficed to establish standing in a consumer class action stemming from a November 2012 hacking incident in which the social security and drivers' license numbers of approximately 1 million customers were allegedly stolen from defendant's network. The Sixth Circuit Galaria panel split 2:1, with Circuit Judge White writing for the majority and joined by District Court Judge Lipman sitting by designation; Circuit Judge Batchelder dissented. The Sixth Circuit denied defendant's petition for rehearing en banc.

Meanwhile, plaintiffs have appealed lower courts' dismissals of putative data breach class actions for lack of standing to the Fourth, Eighth, and District of Columbia Circuits – arguing that these circuits should follow the Sixth and Seventh Circuit's approach. In September 2016, the Fourth Circuit heard oral argument in Beck v. McDonald, No. 15-1395/15-1715, which arose from the theft of a VA Hospital laptop that contained plaintiffs' medical information. Alleruzzo v. Supervalu, No. 16-2378/16-2528, which arose from a hack that allegedly compromised payment card information for customers at more than 1,000 grocery stores, has been fully briefed in the Eighth Circuit and will be argued in 2017. Attias v. CareFirst, No. 16-7108, a putative class action following a data breach of the defendant health care insurer, is pending in the District of Columbia Circuit and will be briefed in early 2017.

With President-elect Donald Trump set to take office next month and a Supreme Court nomination looming, the Sixth and Seventh Circuit decisions finding plaintiffs demonstrated standing may be short-lived. Trump's widely-publicized list of potential nominees contains 21 conservative justices that Republicans hope will follow in the footsteps of their predecessor. Justice Scalia famously sought to curtail class actions, authoring decisions such as Wal-Mart Stores, Inc. v. Dukes, Comcast v. Behrend, and AT&T Mobility LLC v. Concepcion, all of which took aim at limiting plaintiffs' ability to bring such lawsuits. Even more notable is the fact that all three rulings were decided by a 5-4 vote, leaving Justice Scalia's replacement with a significant opportunity to influence the Court's future class action jurisprudence.Will a conservative new Supreme Court Justice derail the data breach class action freight train? Stay tuned in 2017!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.