This past week, the Ponemon Institute announced their publication of the results of their fifth annual study on the costs of data breaches for U.S.-based companies. The study was sponsored by the PGP Corporation. A similar report for U.K.-based companies was also released. This year's report, entitled 2009 Annual Study: Cost of a Data Breach, displays the results of the Ponemon Institute's research of data breach incidents occurring in 2009.
Overall, as with previous years, the study found that U.S. organizations continue to experience increased costs associated with the data breaches they experience.
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On January 5, 2010, Judge William Hibbler of the U.S. District Court for the Northern District of Illinois became the latest federal district judge to share his views about whether an increased risk of future harm based on the inadvertent exposure of personal information is a legally cognizable harm. In Rowe v. UniCare Life & Health Insurance Co., No. 1:09-cv-2286 (N.D. Ill. Jan. 5, 2010), Judge Hibbler . . . hinted that the plaintiff's claims for violations of the Fair Credit Reporting Act ("FCRA") and the Illinois Insurance Information and Privacy Act, as well as his common law claims of invasion of privacy, negligence and breach of implied contract, may ultimately be dismissed if the plaintiff failed to show a basis for damages other than his alleged increased risk of future harm, such as identity theft.
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On December 7, 2009, a federal district court sitting in New Jersey dismissed a securities fraud class action lawsuit against Heartland Payment Systems arising from a massive breach of credit and debit card information and, in doing so, reinforced the difficulties private plaintiffs face in bringing data breach lawsuits under the federal securities laws.… Continue Reading
In Amburgy v. Express Scripts, Inc., Magistrate Judge Frederick R. Buckles of the U.S. District Court for the Eastern District of Missouri held that "plaintiff's asserted claim of 'increased-risk-of-harm' fails to meet the constitutional requirement that a plaintiff demonstrate harm that is 'actual or imminent, not conjectural or hypothetical.' Plaintiff has therefore failed to carry his burden of demonstrating that he has standing to bring this suit."
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A typical corporate data security policy classifies consumer contact information as confidential, but not “highly confidential” or “sensitive.” Should mere contact information be afforded greater protection? One case on point has dragged on since late 2007, when Ameritrade reported that a database of its customers’ contact information (including names, physical addresses, email addresses and phone … Continue Reading
On August 24 and 25, 2009, the Department of Health and Human Services (“HHS”) and the Federal Trade Commission (“FTC”), respectively published rules on when and how covered entities regulated by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and vendors of personal health records (“PHR”) must notify individuals of security breaches concerning … Continue Reading
Where the only harm alleged is mere "speculation as to a possible risk of injury," a claim cannot survive a 12(b)(6) motion to dismiss, according to a District of Connecticut decision issued on August 31, 2009. McLoughlin v. People's United Bank, Inc., and Bank of New York Mellon, Inc., No. 3:08-cv-00944-VLB (D. Conn. Aug. 31, 2009), thus follows a long and growing line of cases which simply hold that where there is no actual harm, there can be no case.
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In the context of wireless network security, we hear a lot about WEP vs WPA, but these technologies are not widely understood, especially among attorneys. WEP and WPA are two alternative ways to secure a wireless network from unauthorized interception, and WPA is more secure than WEP. In fact, researchers have reported consistently for several … Continue Reading
the Federal Fair Credit Reporting Act preempted an identity exposure plaintiff's state law claims for, among other things, negligence, breach of contract, and violation of the New York Deceptive Trade Practices Act
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On Monday, the Northern District of California granted Gap, Inc.'s Motion for Summary Judgment in Ruiz v. Gap, Inc., et al., Case No. 07-5739 SC, holding that Ruiz's allegations of an increased risk of identity theft "do[] not rise to the level of appreciable harm necessary to assert a negligence claim under California law."
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A new benchmark study released by the Ponemon Institute indicates that the costs associated with data breaches in the U.S. continue to rise. The Fourth Annual U.S. Cost of Data Breach Study ("Study") found that the average cost of a data breach has risen to $202 per customer record lost or stolen, up from $138 per customer record lost of stolen in 2005, the first year that the study was conducted. According to the Privacy Rights Clearinghouse, since 2005, more than 250 million customer records containing confidential personal information have been lost or stolen.
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