Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...
Nov. 19 — Testing companies failing to disclose to students' that their personally identifiable information was sold at a profit to educational organizations doesn't provide injury sufficient for Article III standing, the U.S. Court of Appeals for the Seventh Circuit affirmed Nov. 18.
In yet another blow to putative class actions alleging privacy violations, Judge Michael S. Kanne agreed with the trial court that the plaintiffs didn't establish how ACT Inc. and The College Board “deprived them of the economic value” of their PII.
Every year, the appeals court said, “millions” of high school students take the ACT and the SAT to gain admission to a college or university. As a part of the examination process, some test takers allow the testing agencies to share or send their PII with educational organizations. According to the plaintiffs—former participants in this information exchange program—alleged that they were harmed when the testing agencies didn't disclose that the students' PII was sold for profit.
Alleging invasion of privacy, unfair and deceptive business practices, unjust enrichment and breach of contract, the plaintiffs filed a putative class action complaint. The defendants' sale of the plaintiffs' PII didn't “cause” plaintiffs to pay the examination fees because the fees were paid to take the exams, the district court found. It explained that a plaintiff's injury must be “based on the plaintiffs' loss, not the defendant's gain.”
After a failed bid for leave to amend their complaint, the plaintiffs appealed, arguing again that the defendants deceived them by failing to disclose the sale of their PII and sought damages from the income derived from the alleged deception. The appeals court disagreed.
The Seventh Circuit explained that “a plaintiff who would have been no better off had the defendant refrained from the unlawful acts of which the plaintiff is complaining does not have standing under Article III of the Constitution to challenge those acts in a suit in federal court.” Here, the appeals court said, in both potential scenarios—sharing the PII with and without a fee—the plaintiffs' PII would have been shared with the participating organization in the same manner.
Further, it said the class complaint failed to show how the plaintiffs were deprived of the economic value of their PII. The plaintiffs claimed injury “based solely on a gain to defendants and without alleging a loss to themselves,” the appeals court said, finding that the plaintiffs'' only claim of economic value is “a portion of the value created by Defendants after Plaintiffs authorized the sending or sharing of their information.” Instead of being harmed, the plaintiffs “actually benefited from participation in the information exchange program,” the appeals court concluded.
Judges William J. Bauer and Ilana Rovner joined the opinion.
Larry D. Drury, Chicago represented the plaintiffs. SmithAmundsen LLC represented ACT. Sidley Austin LLP represented the College Board.
To contact the reporter on this story: Jimmy H. Koo in Washington at email@example.com
To contact the editor responsible for this story: Donald G. Aplin at firstname.lastname@example.org
The full text of the court's opinion is available at http://www.bloomberglaw.com/public/document/Silha_v_ACT_Inc_No_151083_2015_BL_379598_7th_Cir_Nov_18_2015_Cour.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)