Data Breach Lawsuits: Why is the Failure Rate so High?

malware-297722_640Usually, within days, weeks, or months after a business notifies the public of their data breach, it’s almost an absolutely sure bet that the clients will retaliate with a filed lawsuit. Usually these lawsuits seek class-action status, which means that one or more victims are representing a larger group of victims. One example would be Home Depot, who had a lawsuit filed against them for exposing 56 million payment cards.

Nevertheless, most of the time, the judges and courts simply dismiss these lawsuits. One example would be the recent eBay data breach lawsuit that was dismissed. eBay had a lawsuit filed against them for exposing passwords and personal information for 145 million users.

Law3Why are so many cases dismissed?

The most common reason why so many data breach lawsuits are dismissed is mainly due to the ‘Article III’ standing. ‘Article 3′ states that the ‘plaintiffs bar’, which is a group of attorneys symbolizing plaintiffs, must prove that the defendants suffered an actual or threatened injury, which doesn’t cover the consequences of a data breach.

Efforts are being put to validate a data breach as a harmful act against an individual. However, unless the Supreme Court changes their mindset and accepts data breaches as a form of threat or harm to a person, data breach lawsuits will continue to get dismissed far into the future.

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Category: Data Breach

- May 11, 2015
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