Generally, to be able to proceed with an action in federal court, Article III of the Constitution requires that the plaintiffs demonstrate that they have suffered an injury-in-fact, i.e., injury that is concrete, particularized, and actual or imminent; that is fairly traceable to the challenged action; and that is redressable by a favorable ruling. Nat’l Collegiate Athletic Ass’n v. Gov. of N.J., 730 F.3d 208, 218 (3d Cir. 2013). At the initial pleadings stage, Article III standing for data-breach class actions generally hinges upon the plaintiffs’ ability to plead prong one: injury-in-fact.

Two class actions currently pending in the United States Court of Appeals for the Third Circuit, In re Horizon Healthcare Services Inc. Data Breach Litigation (D. N.J. Mar. 31, 2015), appeal docketed, No. 15-2309, and Storm v. Paytime, 90 F.Supp. 3d 359 (M.D. Pa. 2015), appeal docketed, No. 15-3690, are being monitored closely by cybersecurity attorneys and their corporate clients. In both of these data-breach cases, the plaintiffs are appealing the district court’s dismissal of their respective complaints because the district courts found that the plaintiffs lack Article III standing and suffered no injury-in-fact, relying heavily upon Reilly v. Ceridian Corp., 664 F.3d 38 (3d Cir. 2011), the controlling Third Circuit precedent.

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