{"id":1356,"date":"2024-04-09T08:46:13","date_gmt":"2024-04-09T12:46:13","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=1356"},"modified":"2024-04-09T08:46:13","modified_gmt":"2024-04-09T12:46:13","slug":"texas-federal-court-throws-out-data-breach-class-action","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/04\/09\/texas-federal-court-throws-out-data-breach-class-action\/","title":{"rendered":"Texas Federal Court Throws Out Data Breach Class Action"},"content":{"rendered":"

\"\"<\/a>By Gerald L. Maatman, Jr., Jennifer A. Riley, and Emilee N. Crowther<\/b><\/p>\n

Duane Morris Takeaways<\/i><\/b>: In Austin v. Fleming, Nolen & Jez, LLP<\/i>, No. 4:23-CV-00901, 2024 U.S. Dist. LEXIS 60696 (S.D. Tex. Apr. 2, 2024), Judge Andrew S. Hanen of the U.S. District Court for the Southern District of Texas granted<\/a> Defendant\u2019s motion for summary judgment in a data breach class action. The Court found that the time Plaintiff\u2019s allegations about the time spent – (i) researching the data breach, (ii) exploring credit monitoring and identity theft options, (iii) self-monitoring her accounts, and (iv) seeking legal counsel – were not compensable damages and could not support her claims.\u00a0 This case serves as an important reminder that named Plaintiffs in data breach class actions must have suffered an actual, viable, concrete injury to sustain their claims.<\/i><\/p>\n

Case Background<\/b><\/p>\n

On February 6, 2023, a cybercriminal breached Defendant\u2019s servers and obtained some of its confidential client data.\u00a0 Id<\/i>. at *1.\u00a0 The cybercriminal then demanded Defendant pay money to avoid the publication of Defendant\u2019s confidential client data on the dark web.\u00a0 Id<\/i>.\u00a0 After Defendant sent out data breach notice letters to their potentially affected clientele, the named Plaintiff, a former client of Defendant, filed a class action complaint against Defendant asserting claims for negligence, breach of confidence, breach of implied contract, and breach of implied covenant of good faith and fair dealing.\u00a0 Id<\/i>.<\/p>\n

Defendant moved for summary judgment on the basis that Plaintiff had not, and could not, establish that she had suffered any damages as a result of the data breach.\u00a0 Id<\/i>.\u00a0 In response, Plaintiff presented an affidavit from a putative class member who had suffered monetary damages due to identity theft.\u00a0 Id<\/i>.<\/p>\n

The Court\u2019s Decision<\/b><\/p>\n

The Court ruled that Plaintiff could not rely on a putative class member\u2019s purported damages to support her claims prior to class certification, and as such, any evidence supporting the claims of other class members was \u201cirrelevant.\u201d\u00a0 Id<\/i>. at 4.\u00a0 As a result, the Court only considered Defendant\u2019s motion for summary judgment as it pertained to Plaintiff\u2019s individual claim against the Defendant. Id<\/i>.<\/p>\n

The Court held that none of the following allegations of harm were sufficient for Plaintiff to maintain her claims — \u201ctime spent verifying the legitimacy and impact of the data breach, exploring credit monitoring and identity theft insurance options, self-monitoring her accounts and seeking legal counsel regarding her options for remedying and\/or mitigating the effects of the data breach.\u201d\u00a0 Id<\/i>. at *5-6.<\/p>\n

Accordingly, the Court found that because Plaintiff could not show \u201cthat she was injured by the data breach\u201d or that \u201cshe suffered any damages,\u201d summary judgment was proper.\u00a0 Id<\/i>. at *6.<\/p>\n

Implications For Companies<\/b><\/p>\n

The Court\u2019s ruling in Austin v. Fleming<\/i> underscores the importance of damages and a viable injury-in-fact in data breach class actions.\u00a0 The first line of defense in any data breach class action challenging whether the named Plaintiff suffered an actual, concrete injury.\u00a0 Used effectively, companies can parlay a Plaintiff\u2019s claimed damages in data breach class actions as quick off-ramp out of litigation.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Emilee N. Crowther Duane Morris Takeaways: In Austin v. Fleming, Nolen & Jez, LLP, No. 4:23-CV-00901, 2024 U.S. Dist. LEXIS 60696 (S.D. Tex. Apr. 2, 2024), Judge Andrew S. Hanen of the U.S. District Court for the Southern District of Texas granted Defendant\u2019s motion for summary … <\/p>\n

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