Appeals Court Decision in Hannaford Data Breach Case Could Signal New Approach

October 24, 2011 – In The News
Business Insurance

Scott Vernick discussed the recent decision made in John Anderson v. Hannaford Bros. Co. regarding a Maine-based grocery store and plaintiffs who allegedly experienced more than 1,800 unauthorized charges to their accounts as a result of a 2007 data breach.

The breach of Hannaford Bros. Co.'s electronic payment processing system may have affected 4.2 million debit and credit card numbers from those who made purchases in one of its 270 stores.

Twenty-six separate suits were filed against the store and were consolidated into one claim.

The October 20 ruling stated that the financial losses of the plaintiffs are recoverable as mitigation damages as long as they are reasonable.

Scott Vernick stated that until the ruling, potential class actions relating to data breaches generally have been dismissed early on, either because the plaintiffs did not have standing to sue or there was no threat of actual injury.

Vernick, although not involved in the case, said he believes this may be the first federal appeals court to allow such a case to proceed on the basis of alleged damages.

"The real question," Vernick said, is "does this begin to signal a turn, and if it does, why does it and what it mean?"

View entire article