Second Circuit Addresses Critical Issue in Data Breach Class Actions: Article III Standing Based on Allegations of Future Misuse of Personal Data

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On April 26, 2021, the Second Circuit Court of Appeals decided the case of McMorris v. Carlos Lopez & Assocs., No. 19-4310, 2021 WL 1603808 (2d Cir. Apr. 26, 2021) and addressed one of the most critical issues in private data breach class actions – whether victims of a data breach can establish Article III standing by alleging they are at an increased risk of identity theft or fraud, even if their personal data has not yet been misused.

Although the district court’s ruling that plaintiffs did not establish standing was upheld, the Second Circuit found that victims of a data breach can establish standing based on a risk of future identity theft or fraud. The court also put forward a three-factor test to determine if standing exists when misuse of plaintiffs’ data has not yet occurred.

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Vermont First State to Pass Data Broker Law

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Vermont lawmakers recently passed a first-of-its-kind data broker law, which protects consumers from credit freeze fees, data fraud and clarifies data security requirements.

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