On June 25, 2010, Judge Richard Berman of the U.S. District Court of the Southern District of New York granted summary judgment to The Bank of New York Mellon Corp. in Hammond v. The Bank of New York Mellon Corp., dismissing in its entirety a putative class action lawsuit arising from the loss of backup tapes containing personal information in the spring of 2008. In coming to his decision, Judge Berman rejected the plaintiffs’ arguments that they had standing to pursue their claims for negligence, negligence per se, breach of implied contract, breach of fiduciary duty as well as for violations of certain state consumer protection laws. He held that “Plaintiffs lack standing because their claims are future-oriented, hypothetical and conjectural.” The court also held that even assuming, arguendo, that plaintiffs could be said to have standing to pursue such claims, each of their claims would fail because the plaintiffs failed to show that they suffered any actual harm as a result of the tape loss incident.
Judge Berman’s dismissal represents yet another in a long, and still growing, line of cases standing for the proposition that without more, the mere exposure of personal information is not an adequate basis for a lawsuit. Indeed, Judge Berman’s written opinion cited similar dismissals in over twenty such decisions in the opening paragraph.
The Hammond decision is not unique on account of its central themes because the law in this area, except with respect to whether such plaintiffs have standing, is clear at this point. But the decision is noteworthy for the following reasons:
- The opinion demonstrates that the lack of standing argument is still alive and well (and potentially trending toward the victorious) after being vigorously debated and variously decided in nearly every identity exposure case;
- In addition to the lack of damages, the court rejected the plaintiffs’ negligence, breach of fiduciary duty and breach of implied contract claims in large part due to the lack of direct dealings between The Bank of New York Mellon and the plaintiffs, which negated the plaintiffs’ claims of any duty or relationship between the parties;
- Although several plaintiffs experienced unauthorized credit transactions after the tapes were lost, they acknowledged during discovery that they had not suffered identity theft or any fraud as a result of the tape loss thereby dooming their claims; and
- This second victory on behalf of The Bank of New York Mellon further demonstrates Proskauer’s depth of experience and expertise in this area.
It will likely only be a matter of time before another court evaluating the merits of an identity exposure case looks to the Hammond decision for guidance, and we’ll report on that case too. In the meantime, stay tuned, and remember that mere disclosure of personal information, without more, does not a lawsuit make.