Seventh Circuit rejects commonly cited data breach defense

August 6, 2015 by

Data SecurityThe Seventh Circuit has held that Neiman Marcus customers affected by a hacking incident are likely to suffer some form of future fraud.

This should curtail defendants’ use of a Supreme Court ruling that plaintiffs suing over a potential injury must prove impending certainty.  With its decision, the Seventh Circuit became the first federal appeals court to address whether the U.S. Supreme Court’s decision in Clapper v. Amnesty International — which held that plaintiffs suing over a future potential injury must show that it is “certainly impending” — applies in a data breach suit.

While some courts have held that plaintiffs whose information has been compromised in a breach have sufficient standing, defendants have successfully used Clapper, which rejected a challenge to 2008 amendments to the Foreign Intelligence Surveillance Act, to have other suits tossed for failure to state a concrete injury. According to the plaintiffs bar, the circuit court decision will make it harder for them to do so.

The Seventh Circuit’s ruling overturned a district court’s dismissal of customers’ claims against Neiman Marcus over a 2013 data breach. The federal appeals court said the high court’s ruling in Clapper applied to a much more speculative situation, differentiating it from the breach that Neiman Marcus announced had occurred.

The case is Remijas et al. v. The Neiman Marcus Group LLC, case number 14-3122, in the U.S. Court of Appeals for the Seventh Circuit.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

Legal Disclaimer

The information contained in this blog does not constitute legal advice, and does not create an attorney-client relationship. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this blog.