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Reilly v. Ceridian Corp. - 664 F.3d 38 (3d Cir. 2011)

Rule:

Costs incurred to watch for a speculative chain of future events based on hypothetical future criminal acts are no more "actual" injuries than an alleged increased risk of injury. That a plaintiff has willingly incurred costs to protect against an alleged increased risk of identity theft is not enough to demonstrate a concrete and particularized or actual or imminent injury.

Facts:

Plaintiff employees of a payroll customer sued defendant payroll services company for the harm plaintiffs allegedly suffered as a result of the hacking of defendant's data base and the theft of plaintiffs' personal information. The U.S. District Court for the District of New Jersey granted defendant's motion to dismiss for lack of standing, and alternatively, for failure to state a claim. Plaintiffs alleged that they: (1) had an increased risk of identity theft, (2) incurred costs to monitor their credit activity, and (3) suffered from emotional distress. 

Issue:

Did allegations of hypothetical, future injury establish standing under the “actual case controversy” requirement of Article III?

Answer:

No

Conclusion:

The court agreed with the district court that plaintiffs' allegations of hypothetical, future injury were insufficient to establish standing under Article III. Unless and until their conjectures regarding the unknown hacker came true, plaintiffs had not suffered any injury; there was no misuse of the information, and thus, no harm. The alleged increased risk of future injury was even more attenuated because it was dependent on entirely speculative, future actions of an unknown third-party. There was no evidence that the intrusion was intentional or malicious. Plaintiffs alleged no misuse, and therefore, no injury. Indeed, no identifiable taking occurred; all that was known was that a firewall was penetrated. The court declined to analogize the case to cases in the medical device, toxic tort or environmental injury contexts. Plaintiffs' alleged time and money expenditures to monitor their financial information did not establish standing since they, too, were based on hypothetical future criminal acts.

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