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Galaria v. Nationwide Mut. Ins. Co. - 663 F. App'x 384 (6th Cir. 2016)

Rule:

Injury is the first and foremost of standing's three elements. To establish injury in fact, a plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical. Where plaintiffs seek to establish standing based on an imminent injury, the Supreme Court has explained that threatened injury must be certainly impending to constitute injury in fact, and that allegations of possible future injury are not sufficient. However, the Supreme Court has also found standing based on a substantial risk that the harm will occur, which may prompt plaintiffs to reasonably incur costs to mitigate or avoid that harm, even where it is not literally certain the harms they identify will come about.

Facts:

Plaintiffs Mohammad Galaria and Anthony Hancox brought these putative class actions after hackers breached the computer network of Defendant Nationwide Mutual Insurance Company and stole their personal information. In their complaints, Plaintiffs allege claims for invasion of privacy, negligence, bailment, and violations of the Fair Credit Reporting Act (FCRA). The district court dismissed the complaints, concluding that Plaintiffs failed to state a claim for invasion of privacy, lacked Article III standing to bring the negligence and bailment claims, and lacked statutory standing to bring the FCRA claims. In this consolidated appeal, plaintiffs challenge the dismissal of the negligence, bailment, and FCRA claims. 

Issue:

Did the district court err in finding that plaintiffs lack Article III standing to bring the negligence and bailment claims, and lacked statutory standing to bring the FCRA claims?

Answer:

Yes

Conclusion:

The court held that the complaint adequately alleged Article III standing because they alleged that the theft of their personal data placed them at a continuing, increased risk of fraud and identity theft, that their injuries were fairly traceable to defendant's conduct, and a favorable verdict would provide redress. The district court erred in concluding that it lacked subject-matter jurisdiction over plaintiffs' Fair Credit Reporting Act claims because the district court's conclusion that plaintiffs lacked statutory standing was based on an assessment of the merits of the claims.

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