'No Harm No Foul' Becoming The Norm In Data Breach Lawsuits

from the no-blood-no-foul dept

Back in April, a judge ruled that Wells Fargo should not be penalized for a data breach because there was no evidence that those who acquired the data had done anything criminal with it. This seemed like poor reasoning; Wells Fargo had no control whether anyone would use the data in a criminal manner, but it did have control over how it stored the data. In that case, data was lost because it was stored in an unencrypted format on a laptop. Certainly some could argue that that was negligent. But it looks like this line of reasoning is becoming standard. A recent suit brought against data broker Axciom for letting customer data slip out was dismissed since the plaintiffs couldn't prove that anything bad had been done with it. Again, either the company was negligent in letting personal data out, or it wasn't; that should be the measure upon which these cases are decided, not what was done later with the data. There is a flipside, which is that if plaintiffs started winning these cases, data breach lawsuits could easily become the latest class action charade (We can see the commercials now, "Has your personal data been leaked? Call the law offices of..."). But companies can't keep getting let off the hook just because harm can't be proven, or they'll have little incentive to protect the data.

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  1. identicon
    Judge Wapner, 20 Oct 2006 @ 5:57am

    It's about damages

    I think the legal principle here is that generally people who are claiming recompensatory damages in a suit must themselves prove that they were initially damaged. Because the point of the lawsuit is to recoup those iniital damages. If there is no initial damage, what's to recoup?

    Take the example of two cars on the off-ramp on an interstate, at the stop at the end, waiting to turn right. Both drivers are checking for traffic coming from the left, across the overpass. How many times have you been the car behind, and the car in front of you acts like he's gonna go, and so you check to the left to check traffic, see it's clear, and then turn your head to start up and go, only to find out that the idiot in front of you for whatever reason has inexplicably stopped and isn't REALLY going? Often where fender-benders occur at this point it's because the driver behind THOUGHT the first driver was going and clearing out of the way, and then the driver behind neglected to make that confirmation check of "where the heck is the guy in front of me" AFTER checking the traffic to the left but BEFORE actually putting pedal to the metal.... the result being that the driver behind negligently bumps the fender of the guy in front of him.

    Now no issue here that the guy behind is at fault, despite the fact that the guy in front is a wussy idiot for not going when it was completely clear.

    Issue being.... when the guy in front goes to court to sue the guy behind, he must prove that he had DAMAGES. Meaning, a court isn't going to say to the guy in the rear car, hey Mister, you COULD HAVE totalled this man's car if you'd been going 50 mph rather than 5 mph. He isn't going to say, hey Mister, you COULD HAVE put this guy in the hospital and caused thousands of dollars in medical bills and this guy deserves thousands more because he COULD HAVE had all this pain and suffering.

    Nope, the guy in front must prove that his car was even damaged. Must prove that he was hurt. Bring in his estimates and bills from his auto shop and his doctor. Why?

    Because in the United F***ing States of America, no one is supposed to be deprived of life liberty pursuit of happiness and all that without DUE PROCESS.

    The burden of proof is on the plaintiff -- as it should be.

    Wake the f*** up and quit being such a whiner boy.

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