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Hutton v. Nat'l Bd. of Examiners in Optometry, Inc.

United States Court of Appeals for the Fourth Circuit

January 23, 2018, Argued; June 12, 2018, Decided

No. 17-1506, No. 17-1508

Opinion

 [*616]  KING, Circuit Judge:

These consolidated appeals arise from a breach of personal information maintained in a database of the defendant, the National Board of Examiners in Optometry, Inc. (the "NBEO"). Three optometrists, Rhonda L. Hutton, Tawny P. Kaeochinda, and Nicole Mizrahi (the "Plaintiffs"), [**2]  as representatives of the putative class of victims, specify in two complaints that their personal information and that of the class members was stolen in the NBEO data breach. Hutton and Kaeochinda joined in the initial complaint — which underlies appeal No. 17-1506 —that was filed in the District of Maryland in August 2016. It alleges five claims, including negligence, breach of contract, and breach of implied contract. See Hutton v. Nat'l Bd. of Exam'rs in Optometry, Inc., No. 1:16-cv-3025 (D. Md. Aug. 30, 2016), ECF No. 1 (the "Hutton Complaint").1 The complaint of plaintiff Mizrahi — which underlies appeal No. 17-1508 — was filed in that court in September 2016, and alleges claims of negligence, breach of contract, breach of implied contract, and unjust enrichment. See Mizrahi v. Nat'l Bd. of Exam'rs in Optometry, Inc., No. 1:16-cv-3146 (D. Md. Sept. 13, 2016), ECF No. 1 (the "Mizrahi Complaint").2 All the claims arise from the NBEO's failure to adequately safeguard personal information of the Plaintiffs and the class members.

The district court dismissed the Complaints for lack of subject-matter jurisdiction, based on a failure to establish that the Plaintiffs possessed Article [**3]  III standing to sue. It reasoned, inter alia, that the Complaints had not sufficiently alleged the necessary injury-in-fact and that, in any event, they failed to sufficiently allege that any injuries suffered by the Plaintiffs were fairly traceable to conduct of the NBEO. See Hutton v. Nat'l Bd. of Exam'rs in Optometry, Inc., No. 1:16-cv-3025, 243 F. Supp. 3d 609 (D. Md. Mar. 22, 2017), ECF No. 19 (the "Opinion"). The Plaintiffs have appealed the judgments of dismissal and the appeals have been consolidated. As explained below, we are satisfied that the Plaintiffs have standing to sue and therefore vacate and remand.

In July 2016, optometrists across the United States noticed that Chase Amazon Visa credit card accounts had been fraudulently opened in their names. See Hutton Compl. ¶ 2; see also Mizrahi Compl. ¶ 2.3  [*617]  The creation of those fraudulent accounts —which required the use of an applicant's correct social security number and date of birth — convinced several of the victims that data containing their personal information had been stolen. See Hutton Compl. ¶ 2; see also Mizrahi Compl. ¶ 21. The victims discussed the thefts among themselves in Facebook groups dedicated to optometrists, including, [**4]  for example, a group called "ODs on Facebook." See Hutton Compl. ¶ 2; see also Mizrahi Compl. ¶ 2. The optometrists determined that the only common source amongst them and to which they had all given their personal information — including social security numbers, names, dates of birth, addresses, and credit card information — was the NBEO, where every graduating optometry student had to submit their personal information to sit for board-certifying exams. See Hutton Compl. ¶ 2; see also Mizrahi Compl. ¶ 3. Although the victim optometrists identified other possible sources for the data breach — for example, the American Optometric Association, the American Academy of Optometry, and the Association of Schools and Colleges of Optometry —those organizations had not collected or stored social security numbers, or they confirmed that their databases had never been breached. See Hutton Compl. ¶ 16; see also Mizrahi Compl. ¶ 23.

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892 F.3d 613 *; 2018 U.S. App. LEXIS 15748 **

RHONDA L. HUTTON, O.D.; TAWNY P. KAEOCHINDA, O.D. on behalf of themselves and all others similarly situated, Plaintiffs — Appellants, v. NATIONAL BOARD OF EXAMINERS IN OPTOMETRY, INC., Defendant — Appellee.NICOLE MIZRAHI, individually and on behalf of all others similarly situated, Plaintiff — Appellant, v. NATIONAL BOARD OF EXAMINERS IN OPTOMETRY, INC., Defendant — Appellee.

Subsequent History: On remand at, Motion denied by Hutton v. Nat'l Bd. of Exam'rs in Optometry, Inc., 2018 U.S. Dist. LEXIS 171386 (D. Md., Oct. 2, 2018)

Settled by, Costs and fees proceeding at, Motion granted by Hutton v. Nat'l Bd. of Exam'rs in Optometry, Inc., 2019 U.S. Dist. LEXIS 120558 (D. Md., July 15, 2019)

Prior History:  [**1] Appeals from the United States District Court for the District of Maryland, at Baltimore. (1:16-cv-03025-JKB; 1:16-cv-03146-JKB). James K. Bredar, Chief District Judge.

Hutton v. Nat'l Bd. of Exam'rs in Optometry, Inc., 243 F. Supp. 3d 609, 2017 U.S. Dist. LEXIS 42008 (D. Md., Mar. 22, 2017)

Disposition: VACATED AND REMANDED.

CORE TERMS

personal information, allegations, Complaints, injury-in-fact, credit card, traceability, fraudulent, identity theft, standing to sue, speculative, Optometry, social security number, optometrists, consolidate, Exam'rs, district court, maiden name, redressability, unsolicited, quotation, marks, credit card account, married name, compromised, imminent, injuries, stolen, score, lack of standing, subject-matter

Civil Procedure, Justiciability, Standing, Burdens of Proof, Constitutional Law, Case or Controversy, Elements, Injury in Fact, Appeals, Standards of Review, De Novo Review, Jurisdiction, Subject Matter Jurisdiction, Jurisdiction Over Actions, Pleadings, Complaints, Requirements for Complaint