Ruling Makes It Easier to Sue Company after Data Breach

Ruling Makes It Easier to Sue Company after Data Breach

August 3, 2015         Written By Lynn Oldshue

A new ruling from the 7th Circuit Court of Appeals has made it easier for consumers to sue big companies after data breaches. The ruling reverses a case dismissal from 2014, where plaintiffs suing Neiman Marcus were told that they could not sue the company after a data breach because they did not have “concrete, particularized and actual or imminent” injuries.

This case is turning heads across the legal spectrum because it reinstates two previously dismissed claims–one with regards to the aforementioned Neiman Marcus lawsuit, and the other with the infamous Clapper case involving phone records and national security. In both former cases, the judges ruled the victims did not sustain injuries consistent with the requirements of filing a class action lawsuit, and thus, they were not allowed to continue with their lawsuits.

This ruling may change everything.

Until this time, consumers have been left with very few options with regards to reimbursement after a data breach. Most companies simply offered free credit monitoring services to the affected cardholders. Now, consumers may have the opportunity to file class action lawsuits against these companies to get compensated for their losses or vulnerabilities.

In most cases, the legal team gains the most financial benefit from a class action lawsuit. Nevertheless, avoiding a class action lawsuit may be enough of a reason for companies to boost their data security efforts and provide better compensation for their consumers after a hack.

The information contained within this article was accurate as of August 3, 2015. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and may be compensated if you take action with any of our affiliate partners.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for for twelve years. She majored in public relations at Mississippi State University.
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