Article III standing is a fundamental precondition to any federal lawsuit. The “first and foremost of standing's three elements,” in the words of the Supreme Court, is injury in fact: an actual or imminent, and concrete and particularized, invasion of a legally protected interest. Spokeo v. Robins, 136 S. Ct. 1540, 1547-48 (2016). This element, however, is not always analyzed consistently: Two opinions handed down in May and June by the U.S. Court of Appeals for the Second Circuit, in Whalen v. Michaels Stores, and John v. Whole Foods Market Group, appear to apply different principles in interpreting injury in fact. Perhaps as a result of their different analyses, the opinions ordered different appellate dispositions.

'Whalen v. Michaels Stores'

In April 2014, Michaels Stores confirmed that a cybersecurity breach in its system had resulted in the theft of customers' information. Whalen v. Michaels Stores, 2017 WL 1556116, at *1 (2d. Cir. 2017).1 But only “payment” information, such as credit card number—and not “personal” information, such as address—”was at risk in connection with this issue.” Mary Jane Whalen had been a customer of Michaels during the period of cybersecurity vulnerability and her credit card was later charged, fraudulently, by a third party in Ecuador. Whalen filed a putative class action against Michaels based on violations of state law.

Whalen asserted several theories as to injury in fact, all of which were rejected by Judge Joanna Seybert below, who granted the defendant's motion to dismiss. Whalen v. Michael Stores, 153 F. Supp. 3d 577, 580-83 (E.D.N.Y. 2015). Three of these theories were in sharp focus on appeal: (1) the actual theft and use of Whalen's credit card information; (2) the risk of future identity fraud; and (3) her alleged loss of “time and money resolving the attempted fraudulent charges and monitoring her credit.” Whalen, 2017 WL 1556116, at *2. Judges Guido Calabresi, Susan L. Carney, and Carol Bagley Amon, sitting by designation, affirmed dismissal of Whalen's claims in a summary order. The court ruled that Whalen had not adequately alleged injury in fact, because she (1) never actually had to pay for any fraudulent charges; (2) cancelled her card, thereby negating the risk of future fraud; and (3) “pleaded no specifics about any time or effort that she herself ha[d] spent monitoring her credit.”

'John v. Whole Foods Market'

In June 2015, the New York City Department of Consumer Affairs issued a press release claiming that Whole Foods often mislabeled the weight, and thus inflated the price, of certain prepackaged foods. John v. Whole Foods Market Group, 858 F.3d 732, 734 (2d. Cir. 2017). The press release observed that 80 different types of prepackaged food were mislabeled and that 89 percent of such food's labels violated federal labeling standards. Sean John, a “routine” shopper at Whole Foods who “regularly” purchased prepackaged foods there, filed a putative class action against Whole Foods and attached the aforementioned press release to his complaint. Importantly, the complaint “d[id] not identify a specific food purchase as to which Whole Foods overcharged John.”

District Judge Paul Engelmayer dismissed John's complaint for lack of injury in fact, finding there to be “no non-speculative basis on which to conclude that the particular packages of Whole Food[s] products John…bought were overweighted.” In re Whole Foods Market Group Overcharging Litigation., 167 F. Supp. 3d 524, 535 (S.D.N.Y. 2016) (emphasis in original). Judges Amalya L. Kearse, Dennis Jacobs, and Ray Lohier vacated Englemayer's order, ruling that, “drawing all reasonable inferences in his favor,” John's more general allegation that he regularly purchased prepackaged food that was “systematically and routinely mislabeled and overpriced” was sufficient to meet the “low threshold required to plead injury in fact.” 858 F.3d at 737 (internal quotation marks omitted).

Analysis

These two cases both reached the Second Circuit with the same posture: on appeal from a successful facial challenge to the lower court's subject matter jurisdiction at the pleading stage.2 But the opinions reached different results and applied different analyses. The John court applied a less rigorous threshold for establishing injury in fact and was more willing to draw inferences in plaintiff's favor. The more deferential principles that the John court included in its analysis, as discussed below, are absent from Whalen's analysis.