Smiling PigPlaintiffs’ lawyers across the land have trumpeted the U.S. Supreme Court’s decision in Spokeo as a victory (or at least not a loss). Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).  At least one plaintiff’s lawyer has gone so far as to suggest that defense lawyers who raise Spokeo-based arguments should fear sanctions.  As a Southern colleague of mine would say, those lawyers are trying to make a silk purse of a sow’s ear.

Although many post-Spokeo decisions have not yielded dismissal, many have, and they have done so based largely on Spokeo, which does more than reaffirm prior notions of standing and rather strengthens them in a way that is quite beneficial to corporate defendants facing trumped-up claims with no real harm.  One of the most recent defense victories post-Spokeo is Meyers v. Nicolet Rest. of De Pere, LLC, 2016 U.S. App. LEXIS 22139 (7th Cir. Dec. 13, 2016).
Continue Reading Spokeo Was a Loss for Plaintiffs, Seventh Circuit Reaffirms

A relatively new breed of data breach class action involves financial institutions suing merchants for expenses associated with credit card data breaches. Although merchants may not have contractual privity with the card issuers (and instead may have contractual privity with the credit card brands or payment processors), the financial institutions in these cases claim that the retailers should still compensate the financial institutions for costs associated with fraudulent charges and reissuance of credit cards as a result of a data breach. In the most recent decision involving these sorts of claims, an Illinois federal judge found the financial institutions’ claims against the Shnucks grocery store chain too vague to survive Rule 12 dismissal. See Cmty. Bank of Trenton v. Schnuck Mkts., 2016 U.S. Dist. LEXIS 133482 (S.D. Ill. Sept. 28, 2016). The court reasoned that although “the parties are charting relatively new territory in the data breach context by presenting a case between financial institutions and a merchant (as opposed to customers and a merchant), . . . the Court notes that the generality made it difficult to assess the plausibility of such claims.” Id. at *8-9.
Continue Reading Schnucks Shakes Card Issuer Data Breach Class Action, For Now

On July 20, 2015, the Seventh Circuit reinstated a data breach class action in Remijas v. Neiman Marcus Group, LLC, No. 14-3122, after a 2013 malware attack on Neiman Marcus’s computer systems that resulted in the theft of customers’ credit and debit card information. The plaintiffs argued that they had constitutional standing to pursue their claims against the retailer based on an alleged increased risk of future fraudulent charges and greater susceptibility to identity theft. This decision is troubling and could have a potentially significant and wide-ranging impact on pending and future class actions brought in the wake of similar data breaches. In fact, plaintiffs’ lawyers already are citing the decision in other data breach class actions facing Rule 12 standing challenges. See, e.g., In re Barnes & Noble Pin Pad Litigation, No. 12-08617, U.S. Northern District of Illinois.
Continue Reading Seventh Circuit Resurrects Data Breach Class Action and Stymies Standing Challenge

PCI DSS. If your company deals with credit cards and you don’t know what those letters stand for, you should. While the public relations nightmares, response costs and expensive class action defense fees associated with major data breaches garner most of the headlines in the mainstream media, many companies that are victims of data breaches also face significant compliance costs, penalties and fines as a result of contractual relationships with credit card companies, credit card processors and banks. These all stem from a company’s failure to comply with PCI DSS.

So what is PCI DSS? It’s the Payment Card Industry Data Security Standard, which is the proprietary information security standard for organizations that handle branded credit cards from the major card brands, including Visa, MasterCard, American Express and Discover. PCI DSS compliance is an ongoing process and is far too complicated to discuss in detail here. For an overview of PCI DSS and the complete requirements, you can go here. But for our purposes, we will just focus on the risks of not complying.
Continue Reading PCI DSS Compliance: A Difficult Task Worth Doing