On May 28, 2010, in an unpublished decision, the U.S. Court of Appeals for the Ninth Circuit affirmed the California district court’s dismissal of a class action lawsuit against retailer Gap, Inc. because, among other things, the plaintiff failed to show that the loss of his personal information harmed him in a legally cognizable way. We previously wrote about the district court’s dismissal here.

On appeal, the Ninth Circuit agreed with the district court’s dismissal of each of the plaintiff’s causes of action, including claims for negligence, breach of contract, unfair competition, invasion of privacy and violation of California’s Social Security number protection law (Cal. Civ. Code § 1798.85). The Court’s relatively brief opinion went a little something like this:

  • Negligence. Requires Plaintiff to show actual damages. He failed to do that because even if time and money spent on credit monitoring are sufficient, Plaintiff failed to provide any evidence of the time and money he spent on credit monitoring. AFFIRMED.
  • Breach of contract. Similarly requires Plaintiff to show actual damages. Plaintiff failed to show any appreciable harm, and nominal damages will not suffice according to binding Ninth Circuit precedent. AFFIRMED.
  • Unfair competition. Another claim that requires Plaintiff to show actual damages. Actual damages mean loss of money or property, and there is no evidence to support such a loss. AFFIRMED.
  • Invasion of privacy. California courts have yet to extend this cause of action to accidental or negligent conduct. In addition, it is not clear that an increased risk of a privacy invasion, rather than an actual privacy invasion, suffices. AFFIRMED.
  • Violation of Cal. Civ. Code § 1798.85. The law prohibiting requiring an individual to use his Social Security number to access a Web site absent some additional authentication mechanism is not directed at subsequent requests for information once a user enters the Web site. AFFIRMED.

The Ninth Circuit’s decision echoes those issued in every “identity exposure” lawsuit to date: an increased risk of identity theft does not a lawsuit make! This decision hopefully will also allow Gap and friends to relax (a little) after a prolonged litigation battle.