Veterans Out of Luck in Stolen Laptop Case

By Melissa Heelan Stanzione

A veterans hospital that lost a laptop with the unencrypted data of more than 7,400 patients is off the hook for Privacy Act violations, the Fourth Circuit held Feb. 6 ( Beck v. McDonald , 2017 BL 34989, 4th Cir., No. 15-1715, 2/6/17 ).

The court joined the First and Fifth Circuits in holding that an increased risk of future identity theft isn’t a concrete enough injury to sue over. There is a circuit split on the issue, with the Sixth, Seventh and Ninth Circuits holding an increased risk is sufficient to justify a lawsuit.

Here, a group of former patients claimed the hospital failed to follow proper policies and procedures for storing data by not encrypting the laptop that was stolen.

Data on the laptop included names, birth dates, the last four digits of Social Security numbers and physical descriptions.The patients claimed their risk of future identity theft was increased by the loss of the data, and that they should be able to sue.

Speculation Not Enough

This argument is “too speculative” Judge Albert Diaz wrote for the U.S. Court of Appeals for the Fourth Circuit.

There’s no evidence the information on the laptop has been accessed or that it was stolen with the intent to steal their information, it said.

Furthermore, the more time that passes, the more speculative the “threatened injuries” become, the court said.

Judges Paul V. Niemayer and Irene M. Keeley, sitting by designation from the U.S. District Court for the Northern District of West Virginia, joined the opinion.

Mike Kelly Law Group, LLC, represented the patients. The South Carolina U.S. attorney’s office represented the hospital.

To contact the reporter on this story: Melissa Heelan Stanzione in Washington at mstanzione@bna.com

To contact the editor responsible for this story: Jessie Kokrda Kamens at jkamens@bna.com

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