2nd Circuit Hears Data Breach Argument: Is Fear Of Harm Sufficient For Article III Standing?

The 2nd Circuit recently heard oral argument in Whalen v. Michael Stores, Inc., No. 16-260, a data breach case involving credit card data. Whether or not the 2nd Circuit follows the 7th Circuit's lead (established in the Neiman Marcus and P.F. hang's decisions) will likely have far reaching consequences for the development of Article III standing jurisprudence in data breach cases.

The data breach in Whalen resulted from malware that skimmed credit and debit card information from point of sale terminals, capturing credit and debit card numbers and the associated expiration dates. The plaintiff filed a class action lawsuit seeking damages related to the 2013 payment card breach at Michael Stores. Although the plaintiff alleged that cardholders' names were also captured, Michael Stores' investigation revealed that cardholders' names, addresses and PINs were not compromised.