Security experts say that there are two types of companies in the United States: “those that have been hacked and those that don’t know they’ve been hacked.”1 More and more companies have been experiencing data breaches, and “the absolute size of the breaches is increasing exponentially.”2 Predictably, consumers who believe their personal and/or financial information was compromised by a data breach have been suing the breached companies. But there is a threshold question with which courts have been grappling in recent data breach cases: Have the consumer plaintiffs suffered an actual harm sufficient to establish standing to sue in federal court under Article III of the Constitution?
Last month, a Minnesota federal judge preliminarily approved a class action settlement between Target Corporation and a class of consumers asserting claims arising from the 2013 breach of Target’s computer network, which affected the personal and/or financial information of up to 110 million customers. Target agreed to pay a total of $10 million to consumers “whose credit or debit card information and/or whose personal information was compromised as a result of the data breach” and to implement and maintain specified data security measures for a period of five years.3
