May 12 --The loss of data without actual misuse doesn't constitute an injury that would provide standing to plaintiffs who sued federal government contractor Science Applications International Corp. following a 2011 data breach, the U.S. District Court for the District of Columbia ruled May 9 (In re Science Applications Int'l Corp. Backup Tape Data Theft Litig., D.D.C., No. 1:12-mc-00347-JEB,partially dismissed 5/9/14).
Most courts that have addressed the issue of standing in data breach cases “have agreed that the mere loss of data--without evidence that it has been either viewed or misused--does not constitute an injury sufficient to confer standing,” Judge James E. Boasberg said.
In September 2011, an employee of McLean, Va.-based SAIC reported backup tapes containing electronic health records as stolen from his vehicle . Those backup tapes contained the personal information and medical records of nearly 5 million individuals enrolled in TRICARE, the Department of Defense health insurance system for military members, dependents and retirees.
The majority of the plaintiffs have alleged “mere loss of data” and must be dismissed, the court said. But it allowed the claims of two plaintiffs to proceed because they sufficiently alleged that their information was “accessed or abused.”
Citing Clapper v. Amnesty International USA, 133 S. Ct. 1138 (2013) , the district court concluded that an increased risk of harm by itself doesn't constitute an injury in fact.
“At this point, the likelihood that any individual Plaintiff will suffer harm remains entirely speculative,” the court said. The plaintiffs' alleged injuries depend on the actions of an independent third party, the thief who stole the backup tapes, it said.
Nor do measures taken to prevent a speculative future harm, such as credit monitoring, confer standing, the court concluded.
Most of the plaintiffs fared no better with their claim that they were injured because the data breach invaded their privacy. With the exception of a few plaintiffs who alleged that their data were used, the majority of the plaintiffs haven't alleged that the personal information was viewed or disclosed, the court said.
The plaintiffs also alleged that they were injured by the loss of value of their information and the forfeiture of the value of their insurance premiums. But they didn't allege that they intended to sell their information, and they failed to allege that the market value of their insurance coverage was less than what they paid, the court said.
Only two plaintiffs plausibly alleged injuries causally connected to the breach, the court said.
Following the breach, one plaintiff received notices from American Express thanking him for applying for loans he never applied for, and loan applications typically require personal information such as that contained on the lost backup tapes, the court said. Another plaintiff, whose phone number was unlisted, received unsolicited phone calls targeting a medical condition in her medical records following the breach.
The plausibility of those two plaintiffs' allegations, “however, does not lead to the conclusion that wide-scale disclosure and misuse of all 4.7 million TRICARE customers' data is plausibly 'certainly impending,' ” the court said.
Finkelstein Thompson LLP and the Coffman Law Firm served as interim co-lead class counsel. Arnold & Porter LLP and Reed Smith LLP represented SAIC. The Department of Justice represented the federal defendants.
Full text of the court's opinion is available at http://www.bloomberglaw.com/public/document/IN_RE_SCIENCE_APPLICATIONS_INTERNATIONAL_CORP_SAIC_BACKUP_TAPE_DA.
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)