Home Depot Moves To Dismiss Consumer Data Breach Claims For Lack Of Standing

Home Depot has staked its defense of consumer claims arising from the 2014 theft of payment card data from the home improvement retailer on the asserted absence of injuries sufficient to confer standing to sue. Because consumers rarely sustain out-of-pocket losses when their payment card numbers are stolen, lack of standing is typically the primary ground for seeking dismissal of consumer data breach claims. While many courts have been receptive to arguments seeking dismissal of consumer data breach claims for lack of standing, decisions in recent cases - including, most significantly, the Target data breach case - have found that non-pecuniary harms constitute sufficient injury to confer standing. The survival of the consumer claims will depend on which line of precedent the Home Depot court follows.

Arguments as to standing are grounded in Article III, Section 2 of the United States Constitution, which limits the jurisdiction of federal courts to "cases" or "controversies." To constitute a case or controversy, a claim cannot arise from a speculative or potential harm, but rather must concern an actual or imminent injury. Thus, in Clapper v. Amnesty International USA, 133 S. Ct. 1138 (2013), the Supreme Court ruled that mere interception of private data - in that case, by the National Security Agency, through its wiretaps of telephone and email communications - did not confer standing to sue. Clapper held that speculation that intercepted data might be misused did not confer Article III standing; actual use or misuse of the intercepted information was required. Defendants in privacy cases, citing Clapper, have succeeded in dismissing data breach claims for lack of standing where data breach plaintiffs have not alleged actual misuse of their data. See, e.g., Polanco v. Omnicell, Inc., 988 F. Supp. 2d 451 (D.N.J. 2013); In re Barnes & Noble Pin Pad Litig., No. 12-8617, 2013 WL 4759588 (N.D. Ill. Sep. 3, 2013); Yunker v. Pandora Media, Inc., No. 11-3113, 2013 WL 1282980 (N.D. Cal. Mar. 26, 2013).

Home Depot's brief in support of its motion to dismiss relies heavily on Clapper to support its argument that none of the named plaintiffs have suffered actionable injuries. Home Depot contends that consumers could not have been injured when card issuers hold consumers harmless for fraudulent charges and Home Depot offered free credit monitoring to affected customers. The Home Depot brief dismisses plaintiffs' attempts to plead non-monetary harms...