Data Breach Litigation – A New Wave Of Class Actions By Financial Institutions

Rarely does a day go by without news of a data security breach.  According to the Identify Theft Resource Center, there have been a total of 447 data breaches to date this year, which represents a 20.5% increase over the same time period last year (371 breaches).  The majority of courts ruling on individual common law claims arising from data security breaches has dismissed the claims primarily based on lack of standing or lack of damages for failing to prove actual harm.  However, the tide is turning starting with the U.S. District Court for the Northern District of California denying a motion to dismiss recognizing an ascertainable value and/or property right inherent in consumers' personally identifiable information.  Claridge v. RockYou, 785 F. Supp. 2d 855 (N.D. Cal. 2011).