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Privacy v. Data Security

The year 2005 really marked the beginning of the “era of data breaches,” and with it, the “era of data breach lawsuits.” The ChoicePoint data breach in late 2004, which first became newsworthy in early 2005, was the catalyst. See, “The ChoicePoint Data Security Breach (Feb. '05): What It Means for You,” Privacy Rights Clearinghouse. That breach involved approximately 163,000 records, which by 2005 standards was a “major” data breach, and ChoicePoint was the first organization to notify the data subjects of the breach under the first (and only) data breach notification law in the country ' the California law known back then by privacy experts simply as SB 1386. The media floodgates that opened in the aftermath of ChoicePoint's notification set off a chain reaction that ultimately resulted in similar data breach notification statutes being passed in 47 states, the District of Columbia, and three U.S. Territories, as well as under various federal statutes, including the Gramm-Leach Bliley Act and HIPAA (Health Insurance Portability and Accountability Act). It also resulted in what is now commonplace in the wake of major data breaches ' class action “privacy” litigation on behalf of data subjects, seeking millions of dollars in damages, under a dizzying array of legal theories.

What's perhaps not widely realized is that, more than 10 years later, significant obstacles to would-be class action plaintiffs still exist. In fact, there is still a divide among various U.S. circuit courts as to what is necessary to even establish standing by data subjects in these cases. Many pundits have been theorizing for years that this issue of standing is finally about to be resolved in favor of plaintiffs. But even in the few courts where plaintiffs have achieved favorable decisions on standing, there still has never been a single jury verdict in a consumer class action data breach case. One reason for that is because not a single court in the country has ever even certified a class in such a case. Not one ' in more than 10 years.

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