Wednesday, October 31, 2007

Seventh Circuit Finds Standing where Plaintiff's Data Had Been Compromised but not yet Misused

Per Pisciotta v. Old Nat. Bancorp, 499 F.3d 629 (7th Cir. Aug. 23, 2007):

The district court granted ONB's motion for judgment on the pleadings and denied the plaintiffs' motion for class certification as moot. Specifically, the district court concluded that the plaintiffs' claims failed as a matter of law because “they have not alleged that ONB's conduct caused them cognizable injury.”

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The district court looked to five cases from other district courts across the Country that had rejected claims for “the cost of credit monitoring as an alternative *633 award for what would otherwise be speculative and unrecoverable damages.” Id. Finding their reasoning persuasive, the district court concluded that “[t]he expenditure of money to monitor one's credit is not the result of any present injury, but rather the anticipation of future injury that has not yet materialized.”

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We have, of course, an independent responsibility to examine our subject matter jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). As we have noted, in reaching the conclusion that dismissal was appropriate, the district court in this case relied on several cases from other district courts throughout the Country. Many of those cases have concluded that the federal courts lack jurisdiction because plaintiffs whose data has been compromised, but not yet misused, have not suffered an injury-in-fact sufficient to confer Article III standing. We are not persuaded by the reasoning of these cases. As many of our sister circuits have noted, the injury-in-fact requirement can be satisfied by a threat of future harm or by an act which harms the plaintiff only by increasing the risk of future harm that the plaintiff would have otherwise faced, absent the defendant's actions. We concur in this view. Once the plaintiffs' allegations establish at least this level of injury, the fact that the plaintiffs anticipate that some greater potential harm might follow the defendant's act does not affect the standing inquiry.


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