Ninth Circuit Revives Data Breach Claims Against Zappos
The Ninth Circuit on Thursday found that 24 million Zappos.com customers subject to a 2012 hack had standing because of the “imminent” risk of identity theft.
March 08, 2018 at 04:36 PM
3 minute read
The original version of this story was published on The Recorder
A federal appellate court has revived claims against online shoe retailer Zappos.com Inc. related to a 2012 data breach where hackers stole the personal information of more than 24 million customers.
The U.S. Court of Appeals for the Ninth Circuit on Thursday found that the “imminent” risk of identity theft from the Zappos breach was enough to establish standing to sue for those customers who had not yet been the victim of fraud. The decision reversed a ruling from U.S. District Judge Robert Clive Jones of the District of Nevada who dismissed the claims from plaintiffs who hadn't alleged any instances of identity theft at the time of the suit.
Ninth Circuit Judge Michelle Friedland penned the unanimous opinion, joined by colleague Judge John Owens and U.S. District Judge Elaine Bucklo of the Northern District of Illinois sitting by designation. Friedland's opinion leaned heavily on the Ninth Circuit's 2010 decision in Krottner v. Starbucks, a case where the court found Starbucks Corp. employees “alleged a credible threat of real and immediate harm” after a company laptop containing their personal information was stolen.
Thursday's decision in the Zappos case was the first to re-examine the Krottner decision since the U.S. Supreme Court handed down its 2013 decision in Clapper v. Amnesty International USA, which held that “an objectively reasonable likelihood” of future harm is not enough to establish standing. Friedland concluded that Krottner is still good law and controlled the Zappos case.
“Unlike in Clapper, the plaintiffs' alleged injury in Krottner did not require a speculative multi-link chain of inferences,” Friedland wrote. “And although the Supreme Court focused in Clapper on whether the injury was 'certainly impending,' it acknowledged that other cases had focused on whether there was a 'substantial risk' of injury,” she wrote.
The hackers in the Zappos case allegedly stole customers' names, account numbers, passwords, email addresses, billing and shipping addresses, telephone numbers, and credit and debit card information in 2012. Thursday's opinion found that plaintiffs alleged risk of future identity theft is “fairly traceable” to Zappos' failure to prevent the breach.
“That hackers might have stolen plaintiffs' PII in unrelated breaches, and that plaintiffs might suffer identity theft or fraud caused by the data stolen in those other breaches (rather than the data stolen from Zappos), is less about standing and more about the merits of causation and damages,” Friedland wrote.
Stroock & Stroock & Lavan partner Stephen Newman in Los Angeles, who handled oral arguments at the Ninth Circuit for Zappos, directed a request for comment to the company, which didn't immediately respond Thursday afternoon. Likewise, the plaintiffs' lawyer, D. Gregory Blankinship of Finkelstein Blankinship Frei-Pearson & Garber in White Plains, New York, didn't immediately respond to a phone message.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllPierson Ferdinand's New Partner Talks Startup's IP Risks, Deepfake Regulation and More
UK-Based Legal Entity Management Startup Kuberno Announces £9.5 Million Series A Investment
Trending Stories
- 1Infant Formula Judge Sanctions Kirkland's Jim Hurst: 'Overtly Crossed the Lines'
- 2Trump's Return to the White House: The Legal Industry Reacts
- 3Election 2024: Nationwide Judicial Races and Ballot Measures to Watch
- 4Climate Disputes, International Arbitration, and State Court Limitations for Global Issues
- 5Judicial Face-Off: Navigating the Ethical and Efficient Use of AI in Legal Practice [CLE Pending]
- 6How Much Does the Frequency of Retirement Withdrawals Matter?
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250