Case Report – Another data breach claim dismissed

11 Sep

An American court has dismissed another data breach claim because the plaintiffs did not allege any damage other than the cost of obtaining credit monitoring services.

The plaintiffs provided their personal information to the defendant, a bank, in an online application for services. Their information was hosted by a third party and was subject to a malicious hacking attack in 2005. The Seventh Circuit upheld the bank’s motion to dismiss based on the inadequacy of the plaintiffs’ pleadings. It made the following comment on the recent court decisions that weigh against recovery of credit monitoring costs borne as a result of a data breach:

Although some of these cases involve different types of information losses, all of the cases rely on the same basic premise: Without more than allegations of increased risk of future identity theft, the plaintiffs have not suffered a harm that the law is prepared to remedy.

The outcome and reasoning in this case is similar to that in Kahle v. Litton Loan Servicing LP, discussed here.

Pisciotta v. Old National Bancorp (23 August 2007, 7th Cir.).

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