Last week, the Seventh Circuit handed down another friendly ruling for data breach class action plaintiffs, reversing a district court’s dismissal of a class action complaint over a 2014 data breach at P.F. Chang’s restaurants.  In reversing the district court’s holding that the plaintiffs had not demonstrated Article III standing, the Seventh Circuit ruled that the risk of future fraudulent charges and identity theft created by the breach as reported by P.F. Chang’s constituted a “certainly impending” future injury sufficient to confer Article III standing.  This decision builds on an earlier ruling from the Seventh Circuit that revived a data breach suit filed against Neiman Marcus, and will create further incentives for future plaintiffs to file data breach class action lawsuits in the federal courts of Illinois, Indiana, and Wisconsin, when jurisdictionally possible.

Continue Reading Seventh Circuit, Relying on Defendant’s Post-Breach Statements, Allows Data Breach Class Action to Proceed

A federal judge in the Northern District of Illinois has denied Neiman Marcus Group LLC’s (“Neiman”) motion to dismiss a consumer class action lawsuit arising from a December 2013 data breach at the retailer that exposed about 350,000 credit cards.  As we previously reported, the plaintiffs sued Neiman alleging various claims arising from fraudulent

Last Wednesday, the FTC took the next step in its ongoing Section 5 enforcement proceedings against LabMD, filing a formal notice seeking an appeal of Administrative Law Judge Chappell’s initial decision before the full Commission.  Judge Chappell’s initial decision, announced on November 13, dismissed the FTC’s complaint against LabMD, finding that the FTC failed

On Friday, November 13, Federal Trade Commission (FTC) Chief Administrative Law Judge Chappell issued an Initial Decision dismissing the FTC’s complaint against LabMD, on the ground that the Commission’s staff had failed to carry its burden of demonstrating a “likely substantial injury” to consumers resulting from LabMD’s allegedly “unfair” data security practices. While Judge Chappell’s decision represents a victory for LabMD as the first company to successfully challenge an FTC Section 5 data security enforcement proceeding, the ruling may prove short-lived, as staff likely will appeal the case to the full Commission, which will review the decision de novo. Nevertheless, the Commission’s eventual handling of this proceeding could articulate a more precise standard for likely substantial injury that could guide future Section 5 “unfairness” jurisprudence.
Continue Reading Administrative Law Judge Dismisses FTC’s LabMD Complaint, Finding Insufficient Evidence of “Substantial Injury” to Consumers

Last week, the Third Circuit revived a multi-district privacy lawsuit against Google, finding that the trial court erred in dismissing the plaintiffs’ privacy claims under California state law.  The case centers around the plaintiffs’ allegations that Google violated state and federal law by circumventing the Safari browser’s default “cookie blocker” settings to track users’ online activity while publicly professing to respect users’ Safari browser settings.  While the Third Circuit affirmed the trial court’s dismissal of federal claims under the Wiretap Act, the Stored Communications Act (SCA), and the Computer Fraud and Abuse Act (CFAA), the court vacated the district court’s dismissal of the plaintiffs’ claims under California tort law and the California constitution’s right to privacy.

The plaintiffs’ claims originated from a 2012 Wall Street Journal article describing a researcher’s findings that Google, despite the Safari browser’s default settings intended to blocking tracking cookies, had utilized methods to circumvent these settings and track Safari users’ Internet browsing habits via tracking cookies.  At the same time, the plaintiffs alleged, Google made a series of public statements, including statements within its privacy policy, indicating that it respected the Safari browser’s cookie-blocking settings.  Google subsequently entered into settlements with the Department of Justice and a consortium of state attorneys general over its practices.  Twenty-four plaintiffs also filed putative class action suits against Google and third-party advertisers, alleging violations of federal and state privacy law.  The suits were combined into the instant litigation in the District of Delaware, and in October 2013, the district court dismissed the complaint in its entirety, finding that the plaintiffs failed to state a claim.

Continue Reading Third Circuit Resurrects State Law Claims Against Google in Safari Cookie Tracking Lawsuit

On October 9, the Eleventh Circuit affirmed in Ellis v. Cartoon Network, Inc. that a person who downloads and uses a free mobile application to view freely available content is not, without more, a “subscriber” under the Video Privacy Protection Act (“VPPA”).

Cartoon Network offers a free mobile app that people can download to watch

In one of the first decisions evaluating Telephone Consumer Protection Act (TCPA) claims under the FCC’s recent omnibus TCPA order, the Northern District of California dismissed a putative class action lawsuit alleging that AOL violated the TCPA when users of its Instant Messenger service (AIM) sent text messages to incorrect recipients.  After the court dismissed

The Third Circuit released its decision in FTC v. Wyndham Worldwide Corp. earlier today, affirming the district court’s decision that the FTC has the authority to regulate companies’ data security practices under the “unfair practices” prong of Section 5 of the FTC Act.  The highly anticipated precedential opinion dismissed Wyndham’s arguments that the FTC lacks the authority to regulate cybersecurity practices, finding instead that neither Congressional legislation nor the FTC’s prior statements contradicted the FTC’s attempts to assert its cybersecurity powers.  The court also held that Wyndham received fair notice of the potential application of the unfairness standard under Section 5 to data security practices, rejecting Wyndham’s argument that it should receive notice of which specific cybersecurity practices are required to satisfy the Section 5 standard.  Finally, the court held that the FTC sufficiently alleged a “substantial injury” to consumers, as required under Section 5’s unfairness prong.  An analysis of the highlights of the Third Circuit’s opinion is available after the jump.
Continue Reading Third Circuit Upholds FTC’s Data Security Authority in FTC v. Wyndham