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Class Action Quarterly Update: Privacy and Data Protection | Arent Fox
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Second Circuit Rules Against Privacy Policy Language Claims
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Firmer Footing for Data Breach Standing, Thanks to the Second Circuit | Locke Lord LLP
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[co-author: Lara McMahon]
In
McMorris v. Carlos Lopez & Associates, LLC, a data breach case, the Second Circuit held that plaintiffs may demonstrate standing based on a theory of “increased risk” of future identity theft or fraud following an unauthorized disclosure of their data. With this holding, the Second Circuit joins the Sixth, Seventh, Ninth, and D.C. Circuits in recognizing that a plaintiff can establish an Article III injury based solely on an increased risk of identity theft or fraud.
1 While the Third, Fourth, Eighth, and Eleventh Circuits
2 have declined to find standing on the facts of a case alleging an increased risk of future injury, they have not altogether foreclosed the viability of the increased-risk theory.
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In April 2021, the Second Circuit issued a decision recognizing an increased risk of future, unrealized identity theft or fraud as a basis for establishing Article III standing.
Background
The case,
McMorris v. Carlos Lopez & Assocs., LLC, No. 19-4310, 2021 WL 1603808 (2d Cir. Apr. 26, 2021), involved the inadvertent disclosure of personal data by an employee of Defendant, Carlos Lopez & Associates LLP. The employee accidentally emailed all 65 of Defendant’s employees a spreadsheet containing the personal data of approximately 130 current and former employees of Defendant, including Social Security numbers, dates of birth, home addresses, telephone numbers, educational degrees, and dates of hire. This action constituted a data breach under New York, California, Florida, New Jersey, Texas, and Maine laws which generally define a data breach to include the disclosure of personally identifiable information, such as