Last month, the Eleventh Circuit Court of Appeals dismissed claims brought in a putative class action seeking damages for disclosure of credit card information in a data breach resulting from a cyberattack.  In I Tan Tsao v. Captiva MVP Restaurant Partners, LLC., the court held that the named plaintiff could not establish standing to sue based on allegations that the data breach created a “continuing increased risk of harm from identity theft and identity fraud” or that the plaintiff took affirmative steps to mitigate such potential harm. [1]  This decision follows the reasoning set forth in the court’s recent en banc decision in Muransky v. Godiva Chocolatier, Inc, in which similar allegations were rejected as insufficient to support standing in a case seeking statutory damages from technical violations of the Fair and Accurate Credit Transactions Act, and adds to the circuit split on the issue.[2]
Continue Reading 11th Circuit Rejects Standing Based on Heightened Risk of Identity Theft in Data Breach Suit

Last month, in Guo Wengui v. Clark Hill, PLC, the United States District Court for the District of Columbia granted Plaintiff’s motion to compel production of Defendant’s third-party forensic investigation report following a cybersecurity incident.[1]  The court held that the forensic report was not covered by the attorney-client privilege or the work product doctrine, providing a cautionary tale for companies conducting post-breach investigations.
Continue Reading D.C. District Court Rejects Privilege Claim for Post-Data Breach Forensic Report

On January 12, 2021, the United States District Court for the Central District of California granted Marriott’s motion to dismiss in Arifur Rahman v. Marriott International, Inc. et al[1], a class action filed against the company following its disclosure of a data breach in March 2020.  The court held that Plaintiff lacked standing to sue, breathing life into a defense that has been unsuccessful in several recent cases.

Background

The litigation against Marriott stemmed from its announcement that two employees of a Marriott franchise in Russia accessed personal information of 5.2 million guests.  The company further acknowledged that the compromised information included names, addresses, emails, phone numbers, and other personal details such as birth dates.  In April 2020, Plaintiff Arifur Rahman (“Plaintiff”), on behalf of a class, alleged six causes of action against Marriott International (“Defendant”): (1) negligence; (2) violation of the California Consumer Privacy Act; (3) breach of contract; (4) breach of implied contract; (5) unjust enrichment; and (6) violation of the California Unfair Competition Law.
Continue Reading The Central District Court of California Grants Marriott International’s Motion to Dismiss in Data Breach Suit

Cybersecurity and data privacy, topics that were already top of mind for companies at the start of 2020, were pushed even further to the forefront due to the COVID-19 pandemic, significant data security enforcement actions, and the SolarWinds breach discovered in December.

The increased prevalence of remote work made it all the more critical for

The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2021”.

Cybersecurity, a topic that was already top of mind for boards and corporate stakeholders at the start of the year, was pushed even further to the fore in the wake of the

In July 2019, the UK Information Commissioner’s Office (“ICO”) issued two notices of intent (“NOIs”) to fine British Airways (“BA”) and Marriott International Inc. (“Marriott”) for violations of the EU General Data Protection Regulation (“GDPR”), both related to high-profile personal data breaches. The NOIs proposed staggering fines of £183.39 million and £99.2 million, respectively, which would have constituted the largest penalties levied under the GDPR to date. More than a year later, the UK ICO finally issued the long-awaited penalty notices in relation to both investigations, imposing in both cases fines that, while still significant, were greatly reduced from what had initially been indicated – £20 million in the case of BA (a massive reduction of more than £163 million), and £18.4 million in the case of Marriott (an equally surprising reduction of more than £79 million).
Continue Reading UK ICO Data Breach Fines – What Can We Learn From British Airways and Marriott?

On August 20, 2020, the Department of Justice (“DOJ”) announced that it had charged Joseph Sullivan, the former Chief Security Officer (“CSO”) of Uber Technologies Inc. (“Uber”), with obstruction of justice and misprision of a felony for allegedly attempting to cover up Uber’s 2016 data incident during the course of an investigation by the Federal Trade Commission (“FTC”).
Continue Reading DOJ Charges Former Uber Executive for Alleged Role in Attempted Cover-Up of 2016 Data Breach

In a landmark enforcement action related to a bank data breach, the Office of the Comptroller of the Currency (“OCC”) assessed an $80 million civil monetary penalty and entered into a cease and desist order with the bank subsidiaries of Capital One on August 6, 2020.  The actions follow a 2019 cyber-attack against Capital One.  The Federal Reserve Board also entered into a cease and desist order with the banks’ parent holding company.  The OCC actions represent the first imposition of a significant penalty against a bank in connection with a data breach or an alleged failure to comply with the OCC’s guidelines relating to information security.
Continue Reading OCC Imposes $80 Million Penalty in Connection with Bank Data Breach

On June 25, 2020, a federal district court in the Eastern District of Virginia held that a bank must produce in discovery a report generated by its cybersecurity forensic investigator following a 2019 data breach involving unauthorized access to personal information of customers and individuals who had applied for accounts.[1]  Even though the report was produced at the direction of outside counsel, the court rejected arguments that the forensic report is protected from disclosure by the work product doctrine.  Instead, the court determined that the report was not produced primarily in anticipation of litigation based on several factors, including the similarity of the report to past business-related work product by the investigator and the bank’s subsequent use and dissemination of the report.  This decision raises questions about the scope of work product protection for forensic expert and other similar reports in the context of an internal investigation.
Continue Reading Federal Court Compels Production of Data Breach Forensic Investigation Report

The UK Supreme Court, in a unanimous decision delivered on April 1,[1] has overturned the decision of the Court of Appeal which had found that Morrisons Supermarkets plc (“Morrisons”) could be held vicariously liable for the unauthorized actions of an employee who had deliberately leaked the personal data of thousands of Morrisons’ employees online. In its judgment, the Supreme Court explained that the Court of Appeal had “misunderstood the principles governing vicarious liability”.[2] For more information on the background of this case and the High Court and Court of Appeal judgments, please see our article here. The full text of the Supreme Court judgment can be read here.
Continue Reading Relief for Employers as Supreme Court Rules no Liability in Morrisons Data Breach Case