April 2006

By Lisa J. Sotto and Aaron P. Simpson

A Minnesota district court recently found that a financial institution was not negligent for failing to encrypt personal information contained on a laptop computer that was stolen from an employee’s home office. In Guin v. Brazos Higher Education Service Corp., the court dismissed the negligence action brought against a student loan provider by a customer. In granting the defendant’s summary judgment motion, the court ruled that the company did not breach a duty of care under the Gramm-Leach-Bliley Act (“GLB”) to customers whose unencrypted data may have been contained on the laptop.

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