Target Ruling Lowers Bar for Standing in Data Breach Suits

December 22, 2014 – In The News

Scott L. Vernick was quoted in the Law360 article, “Target Ruling Lowers Bar for Standing in Data Breach Suits.” Full text can be found in the December 22, 2014, issue, but a synopsis is below.

A federal judge in Minnesota ruled last week that a putative class of Target consumers had alleged sufficient economic damage to proceed with their claims over the retailer’s December 2013 data breach.

The ruling is likely to lead to other plaintiffs and courts seizing the opportunity to prolong the life of data breach suits, and companies facing claims either now or in the future over breaches are likely to find little comfort in the judge’s decision.

“Overall, it's not a helpful trend from the standpoint of the defense bar,” said Scott Vernick, a noted privacy attorney. “It's a nice blueprint for the plaintiffs' bar that shows that if they can demonstrate out-of-pocket losses, they have a better chance of getting past a dismissal motion.”

According to attorneys, another potentially troubling aspect of the Target ruling is the insistence that while the retailer’s defense set “a too-high standard for plaintiffs to meet at the motion-to-dismiss stage,” the issues were likely to be brought before the court again after the class-certification stage.

“If the court comes back to standing after class certification, that's not very helpful from the defense bar's perspective because what would be the point of going through that whole process if there's no standing?” Vernick said.

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