Insights on security breach litigation,damages

authentication, comerica, commercially reasonable security, contracting, experimetal, FFIEC, layered security, multifactor authentication, patco, phishing, reasonable, Red Flags Rule, Security, security breach, security breach litigation, token, UCC 4A-202

The Duty to Authenticate Identity: the Online Banking Breach Lawsuits

By InfoLawGroup LLP on April 17, 2012

We have entered an era where our commercial transactions are increasingly being conducted online without any face-to-face interaction, and without the traditional safeguards used to confirm that a party is who they purport to be. The attenuated nature of many online relationships has created an opportunity for criminal elements to steal or spoof online identities and use them for monetary gain. As such, the ability of one party to authenticate the identity of the other party in an online transaction is of key importance.To counteract this threat, the business community has begun to develop new authentication procedures to enhance the reliability of online identities (so that transacting parties have a higher degree of confidence that the party on the other end of an electronic transaction is who they say they are). At the same time, the law is beginning to recognize a duty to authenticate. This blogpost post looks at two online banking breach cases to examine what courts are saying about authentication and commercially reasonable security.

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damages, data breach, Hannaford, motion to dismiss Hannaford data breach payment card PCI DSS, payment card, PCI DSS

Federal Appeals Court Holds Identity Theft Insurance/Credit Monitoring Costs Constitute "Damages" in Hannaford Breach Case

By InfoLawGroup LLP on October 24, 2011

In a significant development that could materially increase the liability risk associated with payment card security breaches (and personal data security breaches, in general), the U.S. Court of Appeals 1st Circuit (the "Court of Appeals") held that payment card replacement fees and identity theft insurance/credit monitoring costs are adequately alleged as mitigation damages for purposes of negligence and an implied breach of contract claim. The decision in Hannaford could be a game changer in terms of the legal risk environment related to personal data breaches, and especially payment card breaches where fraud has been perpetrated. In this post, we summarize the key issues and holdings of the Court of Appeals.

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Breach, damages, litigation, personal information, privacy, security breach litigation

California Federal Court Holds that Damages Properly Alleged in RockYou Data Breach Case

By InfoLawGroup LLP on April 19, 2011

In what may be a sign of an evolving judicial atmosphere and approach concerning data breach lawsuits, a Federal judge in the Northern District of California District Court recently refused to dismiss various causes of action related to a data breach involving RockYou. In particular, the Court explored the issue of whether the plaintiff sufficiently alleged "harm" arising out of the data breach. This blog post takes a look the highlights of the Court's decision.

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Breach, consumer fraud law, damages, duty, employee, employee privacy, employer, litigation, negligence, notification, social security number

IL Appellate Court: No Duty Exists to Safeguard SSNs for Purposes of a Negligence Claim

By InfoLawGroup LLP on February 03, 2011

InfoLawGroup recently discovered a new data breach case, one of the first that we are aware of in the United States, that dives deep into the issue of whether a common law duty exists to safeguard personal information. In Cooney, et. al v. Chicago Public Schools, et. al¸ an Illinois appellate court actually rendered a decision holding that no such duty exists under Illinois law. In this blogpost we take a closer look at the court's rationale for dismissing the plaintiffs' negligence claim, as well as the other interesting holdings of the court.

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damages, Hannaford, litigation, payment card, PCI DSS, security breach

"Damages" Last Stand - Maine Supreme Court Puts an End to the Hannaford Bros. Breach Suit

By InfoLawGroup LLP on September 22, 2010

The Maine Supreme Court has rendered its opinion on the "damages" issue in the Hannaford Bros. consumer security breach lawsuit. Again, the plaintiffs have been unable to establish that they suffered any harm as a result of the Hannaford security breach. Specifically, the Court ruled that "time and effort" alone spent to avoid or remediate reasonably foreseeable harm do not constitute "a cognizable injury for which damages may be recovered." In this blogpost we take a closer look at the Court's rationale.

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