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Gibbons Law Alert

Tagged: Standing

Seventh Circuit Affirms Dismissal of Data Privacy Class Action on Article III Standing Grounds

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Posted in Class Action Defense

On March 31, 2017

Since the United States Supreme Court decided Spokeo, Inc. v. Robins in May 2016, lower courts have struggled to consistently determine whether a plaintiff has standing to sue in federal court, which, as the Spokeo court explained, “requires a concrete injury even in the context of a statutory violation.” That is, even when Congress has made something unlawful and authorized an award of statutory damages for the unlawful act, the mere violation of that law is not itself sufficient to confer standing to sue under Article III of the U.S. Constitution. But precisely what is required to demonstrate sufficient “injury” under Article III remains unclear after Spokeo, especially in the data-breach and data-privacy contexts. In Gubala v. Time Warner Cable, Inc., however, a unanimous Seventh Circuit decision, authored by Judge Posner, held that the defendant’s possible failure to comply with a requirement contained in the Cable Communications Policy Act (requiring the destruction of personally identifiable information (“PII”) if the information is no longer necessary for the purpose for which it was collected) did not afford the plaintiff Article III standing to sue for violation of the statute where his personal information was not released or disseminated in any way. The plaintiff in Gubala had subscribed to Time Warner cable services in 2004, which required him to...

New Jersey Federal Court Relies on Spokeo to Dismiss FACTA Class Action For Failure to Allege Concrete Harm

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Posted in Class Action Defense

On November 22, 2016

The U.S. District Court for the District of New Jersey recently relied on the U.S. Supreme Court’s opinion in Spokeo v. Robins to grant a Rule 12(b)(1) motion to dismiss a statutory violation-based class action complaint for failure to allege a concrete injury. In Kamal v. J. Crew Group Inc., et al. the Court concluded that the plaintiff lacked standing to sue under the Fair and Accurate Credit Transactions Act (“FACTA”) because, as in Spokeo, the claims were based on a purely statutory injury, i.e., the plaintiff did not allege a “concrete and particularized” injury.

Eighth Circuit Relies on Spokeo to Hold That Retention of Personal Information, Without More, Does Not Satisfy Article III’s Injury-in-Fact Requirement

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Posted in Class Action Defense

On October 3, 2016

The United States Supreme Court decision in Spokeo v. Robins, in which the Court considered whether a claim of statutory damages was sufficient to confer Article III standing, left much to be desired in terms of guidance for lower courts and litigants. Nonetheless, the Eighth Circuit’s recent refusal to revive a putative class action over Charter Communications Inc.’s allegedly indefinite retention of consumer data illuminated a way for defendants to trim claims of bare statutory violations, while clarifying how Spokeo should be applied.

Data Breach Victims Grounded: Third Circuit Affirms Dismissal of Putative Class Action Based on Economic-Loss Doctrine and Absence of Explicit Contractual Obligations

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Posted in General Litigation

On September 21, 2016

The Third Circuit’s recent decision affirming the district court’s dismissal of a proposed class action in its entirety highlights the difficulties faced by Plaintiffs pursuing data-security class actions in situations where the claims are not based upon explicit contractual language. This is an important decision for defense counsel to keep in mind in considering options to get rid of a class action before it takes off.

Supreme Court in Spokeo Holds Plaintiffs Must Allege More Than a Bare Procedural Violation to Stand Up for Their Rights

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Posted in Class Action Defense

On June 23, 2016

After much anticipation, the United States Supreme Court issued its decision in Spokeo v. Robins, a case that many believed would finally establish a definitive ruling as to whether a federal statute which awards statutory damages to those impacted is sufficient to confer Article III standing. The question is particularly relevant in the class action context where class members could be awarded statutory damages in the absence of any actual damages. Unfortunately, although the Court considered the scope of the injury-in-fact requirement, the 6-2 decision still leaves the standing question open to interpretation by courts and by both plaintiffs and defendants.

Fourth Circuit Confirms that Data Breach Claims are Covered Under Traditional CGL Policies

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Posted in Insurance

On May 5, 2016

Policyholders may still enforce an insurer’s duty to defend under a Commercial General Liability (“CGL”) policy for claims arising out of a data security breach, according to a recent Fourth Circuit decision. While the decision was issued in an unpublished opinion (a mere 18 days after oral argument), the decision represents a significant victory for policyholders seeking insurance coverage for claims arising out of data breaches resulting in the disclosure of personal information.

Supreme Court Holds Unaccepted Offer of Judgment for Complete Relief to Named Plaintiff in Putative Class Action Does Not Moot Claims

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Posted in Class Action Defense

On February 18, 2016

The Supreme Court of the United States recently issued its ruling in Campbell-Ewald v. Gomez, a closely watched appeal in which the Court held that a complete offer of relief to a named plaintiff in a class action does not moot the individual’s claim. As explained by Justice Ginsburg, writing for the majority and drawing upon lessons taught to a “first-year law student,” an unaccepted settlement offer “creates no lasting right or obligation,” “has no force,” and, thus, “is a legal nullity, with no operative effect” that “does not moot a plaintiff’s case.” The Court’s opinion follows up on its 2013 decision in Genesis Healthcare Corp. v. Symczyk, in which it assumed that an offer of complete relief, even if unaccepted, moots a plaintiff’s individual claim to the extent the plaintiff’s Fair Labor Standards Act (“FLSA”) collective-action allegations could not stand on their own.

Super Bowl Tickets Not the Ticket to Federal Class Action, as Third Circuit Finds No Standing for Uninjured Plaintiffs

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Posted in Class Action Defense

On January 28, 2016

“[T]he disappointment of wanting to attend a concert or athletic event only to discover that the event has sold out,” does not confer constitutional standing. That was the take away from the Third Circuit Court of Appeals recent precedential decision, Finkelman v. Nat’l Football League. Addressing the always-thorny contours of constitutional standing to bring a federal lawsuit, the Court held, in the face of high Super Bowl ticket prices, that neither non-purchasers of tickets nor purchasers of “scalped” tickets at elevated prices, had standing to sue under Article III. This opinion sets up yet another obvious roadblock in the path of plaintiffs looking to bring claims—whether or not as class actions—when their perceived injuries are either non-existent or so tenuous as to make “difficulties in alleging an injury-in-fact . . . insurmountable.”

Third Circuit Holds That Absent Class Members Need Not Show Standing and Reiterates Comcast’s Reiteration of Basic Rule 23 Principles

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Posted in Class Action Defense

On October 29, 2015

In a precedential opinion in Neale v. Volvo Cars of North America, the U.S. Court of Appeals for the Third Circuit held that putative class members need not establish Article III standing, and emphasized that the Supreme Court’s decision in Comcast v. Behrend, 133 S. Ct. 1426 (2013) “was not breaking any new ground” because “the predominance analysis was specific to the antitrust claim at issue.”

Class Action Plaintiffs Have Standing Based on Actual Injuries and Costs of Mitigation Following Corporate Hacking, Says Seventh Circuit

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Posted in Class Action Defense

On August 6, 2015

The Court of Appeals for the Seventh Circuit recently held that class action plaintiffs alleging injuries due to corporate hacking scandals have standing to pursue those claims in federal court, based on both actual injuries suffered repairing damage done by fraudulent charges, as well as costs of mitigating potential future harm, such as credit monitoring. Remijas v. Neiman Marcus Group, LLC, No. 14-3122 (7th Circ. July 20, 2015). As with other cases that come to the same conclusion, the court placed great emphasis on the fact that the data thieves were specifically targeting personal data, as well as the company’s admission of the breach and offer of a year of credit monitoring to those whose information had been exposed.

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