Appeals Court Upholds Dismissal in Scottrade Class Action Lawsuit
While a federal appeals court found that the plaintiffs had grounds to sue over a 2013 data breach at Scottrade, the court ruled the plaintiffs had failed to show they suffered any actual damages.
The U.S. Court of Appeals for the Eighth Circuit ruled that Matthew Kuhns did have standing to bring a breach-of-contract claim against Scottrade.
“Kuhns alleges that a portion of the fees paid in connection with his Scottrade account were used to meet Scottrade’s contractual obligations to provide data management and security to protect his [personal identifying information],” wrote James Loken for the panel. “When Scottrade breached those obligations, Kuhns received brokerage services of lesser value.”
However, the court ultimately ruled the plaintiffs had not adequately proven any real financial losses over the 2013 breach, in which the personal information of up to 4.6 million Scottrade customers had been stolen by hackers.
At the time of the incident, Scottrade said only names and street addresses had been stolen and that other sensitive information, including Social Security numbers and email addresses, had not been taken or used for fraudulent purposes. The brokerage firm had also offered customers a year of free identity protection services and worked with a cybersecurity firm to strengthen their systems.
Four class action lawsuits had initially been filed over the data breach in California, Florida and Missouri, where they were consolidated. A Missouri judge had dismissed the action last year and stated plaintiffs had not proved standing, as they had not shown damages.