The Cybersecurity Law Report

Incisive intelligence on cybersecurity law and regulation

Articles By Topic

By Topic: Judicial Decisions

  • From Vol. 3 No.3 (Feb. 8, 2017)

    Third and Seventh Circuits Shed New Light on Spokeo Standing Analysis

    After the Supreme Court’s 2016 Spokeo decision opened the possibility for statutory violations to form the basis for standing in data privacy cases even without a concrete harm, lower courts have offered their own interpretations highlighting the tension in the Spokeo holding. The Seventh Circuit and Third Circuit appellate courts recently came to different conclusions looking at claims of violations of different statutes, shedding new light on the issue. This article explores and explains these decisions. See also “Spokeo’s Impact on Data Breach Cases: The Class Action Floodgates Have Not Been Opened, But the Door Has Not Been Locked” (May 25, 2016).

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  • From Vol. 2 No.24 (Nov. 30, 2016)

    How to Respond to Law Enforcement Demands for Geolocation Data and Data Stored Abroad

    When faced with a range of demands for data from law enforcement, electronic communications and remote computing service providers must navigate the competing interests of user privacy and legal compliance. They must be prepared in advance to shape their response to a demand based on the type and location of data sought, as they will be expected to act quickly once it is made. During a recent webcast, ZwillGen attorneys Aaron Altschuler and Abby Liebeskind addressed how best to handle law enforcement requests regarding geolocation data and data held overseas in order to avoid liability and protect users. See also “CSIS’ James Lewis Discusses Balancing Law Enforcement and Privacy” (Mar. 16, 2016).

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  • From Vol. 2 No.20 (Oct. 5, 2016)

    Eighth Circuit Sides With Defendants As the Spokeo Standing Battle Continues 

    In the aftermath of Spokeo, courts have had to wrestle with the notion of “concreteness” and the other facets of the standing doctrine in the statutory context. In Braitberg v. Charter Communications, Inc., the Eighth Circuit recently weighed in, finding standing cannot arise from a mere statutory violation alone without a consequent concrete harm. However, Spokeo still arguably leaves the door open for a plaintiff-friendly Article III analysis in the data privacy context or where the lawsuit stems from a hacking incident, Deborah Renner, a partner at BakerHostetler, says in a guest article. She examines the current state of Article III standing decisions in the context of the Eighth Circuit’s most recent pronouncement and discusses some of the most recent arguments likely to stand up on both sides of the bar. See “Making Sense of Conflicting Standing Decisions in Data Breach Cases” (Mar. 30, 2016).

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  • From Vol. 2 No.18 (Sep. 7, 2016)

    Lessons From Consumer Challenges to Email Review Practices

    In three recent cases in front of the same judge, consumers asserting privacy concerns have taken different approaches to challenging how internet giants Google and Yahoo review emails. After class certification was denied in a case against Google, another group of plaintiffs brought a case seeking injunctive relief against Yahoo and a separate group sought permissive joinder on a large scale in a new action against Google. Most recently, in the third case, the same judge granted Google’s motion to sever an attempt to join more than 800 individual plaintiffs. Collectively, the results of these actions emphasize the importance of proper disclosures and illustrate the efficacy of the defense strategy of emphasizing individualized questions of consent. See “Federal Judge Offers Advice on Litigating Data Privacy, Security Breach and TCPA Class Action Suits” (Apr. 27, 2016).

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  • From Vol. 2 No.16 (Aug. 3, 2016)

    Second Circuit Quashes Warrant for Microsoft to Produce Email Content Stored Overseas 

    A federal appeals court recently ruled that the U.S. government could not force a company to turn over third-party communications content stored outside the country. The Second Circuit Court of Appeals agreed with Microsoft that a request to produce customer content held in Ireland was beyond the scope of the Stored Communications Act. “It’s an extremely significant decision [that the Act] does not authorize a U.S. district court to issue a search warrant to seize data being held by ISPs or remote computing services (cloud services) outside the territorial U.S.,” Edward McAndrew, a partner at Ballard Spahr, told The Cybersecurity Law Report. “It is the first ruling of its kind on that issue from a U.S. Court of Appeals.” We analyze the case and its implications. See also “Prosecuting Borderless Cyber Crime Through Proactive Law Enforcement and Private Sector Cooperation” (Mar. 2, 2016).

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  • From Vol. 2 No.13 (Jun. 22, 2016)

    Cyber Insurance Challenges Highlighted by Court’s Denial of P.F. Chang’s Claim

    How far will cyber insurance coverage stretch when there is a breach? Courts are starting to answer this question as cyber insurance policies get tested with breaches. While these policies are marketed as “a panacea for all cybersecurity-related woes,” when policyholders face significant losses, the insurers “hire high-powered lawyers” to avoid paying claims, Scott Godes, a partner at Barnes & Thornburg, told The Cybersecurity Law Report. We analyze the recent district court ruling that a cyber insurance policy fails to cover liabilities to credit card issuers arising from a popular restaurant’s data breach. See also “Building a Strong Cyber Insurance Policy to Weather the Potential Storm”: Part One (Nov. 25, 2015); Part Two (Dec. 9, 2015).

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  • From Vol. 2 No.11 (May 25, 2016)

    Spokeo’s Impact on Data Breach Cases: The Class Action Floodgates Have Not Been Opened, But the Door Has Not Been Locked

    The U.S. Supreme Court’s highly anticipated decision in Spokeo, Inc. v. Robins makes a significant mark on the landscape of data breach cases addressing the threshold Article III standing issue. In this guest article, Thomas Rohback and Patricia Carreiro, a partner and associate, respectively, at Axinn, Veltrop & Harkrider LLP, examine the significance and implications of the May 16, 2016 decision and analyze the floodgate of cases in the past week where both plaintiffs and defendants have run to the court in reliance upon Spokeo. See also “When Do Consumers Have Standing to Sue Over Data Breaches?” (May 11, 2016).

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  • From Vol. 2 No.10 (May 11, 2016)

    When Do Consumers Have Standing to Sue Over Data Breaches?

    When a company is hacked, civil litigation often follows, and the types of claims brought against hacked companies – like in the recent P.F. Chang’s case – include a host of traditional common law and statutory claims. None of these claims can succeed, however, unless plaintiffs can establish standing. This threshold issue has plagued plaintiffs in data breach cases, but a federal appeals court recently ruled in their favor by reversing the dismissal of a class action. In a guest article, Thomas Rohback and Patricia Carreiro, a partner and associate, respectively, of Axinn, Veltrop & Harkrider, analyze the progeny of standing outcomes in data breach cases, including the Lewert v. P.F. Chang’s holding, and examine what this issue and others might look like in future data breach class actions. See also “Making Sense of Conflicting Standing Decisions in Data Breach Cases” (Mar. 30, 2016).

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  • From Vol. 2 No.9 (Apr. 27, 2016)

    Don’t Overlook Commercial General Liability Insurance to Defend a Data Breach

    Even though cyber insurance is becoming more readily available in many cases, companies whose data is hacked should not overlook the possible supplemental coverage provided by their existing commercial general liability insurance, which may cover the cost of defending the litigation that inevitably arises as a result. Some recent decisions appear to hold that CGL insurance does not obligate the carrier to provide such defense costs. However, in a recent case involving Travelers Indemnity Company, the Fourth Circuit upheld a lower court decision requiring the CGL carrier to provide a defense following a data breach. In a guest article, Richard A. Blunk, managing director and general counsel of Thermopylae Ventures, LLC, analyzes Travelers and a related line of cases to examine the possibility of whether other existing insurance coverage may provide data breach litigation defense costs as part of a coordinated corporate risk program. See also “Building a Strong Cyber Insurance Policy to Weather the Potential Storm” Part One (Nov. 25, 2015); Part Two (Dec. 9, 2015).

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  • From Vol. 2 No.7 (Mar. 30, 2016)

    Making Sense of Conflicting Standing Decisions in Data Breach Cases

    Does a data breach constitute a case or controversy for purposes of Article III standing? This is a threshold question that could dramatically change the course for data breach cases, yet the answer remains uncertain. If a court does not find standing, the proposed class cannot seek relief in court and plaintiffs’ relief would be limited to statutory damages and/or penalties imposed, for example, under various state data breach laws. In 2013, the United States Supreme Court’s decision in Clapper v. Amnesty International USA was widely seen to shut the courthouse door on data breach class actions. In 2015, however, some significant case law at the circuit court level called this belief into question. In a guest article, Christina H. Bost Seaton, a partner at FisherBroyles, surveys these developments and a case that could potentially change the landscape.

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  • From Vol. 1 No.17 (Nov. 25, 2015)

    FTC Loses Its First Data Security Case 

    In the FTC’s first loss in a data breach security case, and the first such case to reach a full adjudication, an administrative law judge dismissed the agency’s complaint against LabMD, Inc. regarding two alleged cybersecurity incidents at LabMD.  The ALJ held, in a lengthy Initial Decision, that the FTC did not meet its burden on the first prong of the three-part test in Section 5(n) of the FTC Act – that LabMD’s conduct caused, or is likely to cause, substantial consumer injury.  Phyllis Marcus, counsel at Hunton & Williams, said the ALJ was “holding the FTC Complaint Counsel, rightfully so, to the fire.  Bald allegations of substantial injury or likelihood of substantial injury” to support an unfairness claim will no longer be sufficient if the case stands.  See also “The FTC Asserts Its Jurisdiction and Provides Ten Steps to Enhance Cybersecurity,” The Cybersecurity Law Report, Vol. 1, No. 8 (Jul. 15, 2015).

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  • From Vol. 1 No.16 (Nov. 11, 2015)

    How to Reduce Cybersecurity Risks of Bring Your Own Device Policies (Part Two of Two)

    The now-common practice of employees bringing their own devices into the office offers companies savings, but use of these devices comes with complex risks that must be addressed.  Part one of our two-part series discussed these risks and recommended BYOD policies and training to mitigate the risks.  This second article in the series explores how mobile device management programs and proper protocols for outgoing employees and lost devices can further reduce BYOD risks.  It also explains how BYOD policies can impact litigation, and even result in significant sanctions. 

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  • From Vol. 1 No.16 (Nov. 11, 2015)

    Target Privilege Decision Delivers Guidance for Post-Data Breach Internal Investigations

    In a ruling that may clarify how companies should conduct breach responses to preserve privilege, on October 23, 2015, a federal district court in Minnesota found that certain documents created during Target’s internal investigation of its 2013 payment card breach were protected by the attorney-client privilege and work product doctrine.  The Target case “is one of the first cases we are seeing in the data breach context where the privilege issue has been tested,” Michelle A. Kisloff, a partner at Hogan Lovells, said.  The Court’s denial of class plaintiffs’ motion to compel production of these documents recognized “that data breach victims have a legitimate need to perform an investigation in the aftermath of a breach in which communications are protected by the attorney-client privilege,” Michael Gottlieb, a partner at Bois, Schiller & Flexner, told The Cybersecurity Law Report.  See also “Preserving Privilege Before and After a Cybersecurity Incident (Part One of Two),” The Cybersecurity Law Report, Vol. 1, No. 6 (Jun. 17, 2015); Part Two, Vol. 1, No. 7 (Jul. 1, 2015).

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  • From Vol. 1 No.16 (Nov. 11, 2015)

    Liability Lessons from Data Breach Enforcement Actions

    Inadequate cybersecurity measures can expose companies not only to data breach incidents, but to liability from multiple fronts, including state attorneys general, the FTC and civil litigants.  In a recent panel at the Practising Law Institute, Michael Vatis, a Steptoe & Johnson partner, and KamberLaw partner David Stampley discussed the dynamic enforcement and judicial climate in this space, distilling actionable takeaways from recent settlements with state attorneys general, FTC actions including Wyndham, and evolving consumer litigation jurisprudence.  The enforcement actions and litigations are instructive for companies seeking to fortify their internal information security and data privacy efforts and guard against the risk of liability in the event of a breach.  See also “After a Cyber Breach, What Laws Are in Play and Who Is Enforcing Them?,” The Cybersecurity Law Report, Vol. 1, No. 4 (May 20, 2015). 

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  • From Vol. 1 No.15 (Oct. 28, 2015)

    Federal Courts Offer a Modern Interpretation of the VHS-Era Video Privacy Protection Act

    When does the 1988 Video Privacy Protection Act, which limits what companies can do with personal information about video consumption, apply to companies that post videos online?  The Eleventh Circuit and a New York district court recently dismissed complaints challenging the VPPA – passed in 1988 and designed to protect the privacy of individuals’ VHS rental preferences – narrowing the scope of the Act in the process.  Ellis v. The Cartoon Network, Inc. (11th Cir. Oct. 9, 2015) and Robinson v. Disney Online (S.D.N.Y. Oct. 20, 2015) both dealt with free smartphone apps, and questions regarding who is a “subscriber” and what “personally identifiable information” means under the statute.  Simon J. Frankel, a partner at Covington & Burling, told The Cybersecurity Law Report that “courts are really struggling with how the statute, not written for this context, applies in this context and [they are] trying to draw where the limits are.”  See also “The Tension Between Interest-Based Advertising and Data Privacy,” The Cybersecurity Law Report, Vol. 1, No. 12 (Sep. 16, 2015).

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  • From Vol. 1 No.13 (Sep. 30, 2015)

    Protecting the Crown Jewels Using People, Processes and Technology 

    Guarding against a cybersecurity breach is no longer just a technology issue – heightened encryption and firewall technology is not a panacea for all potential cyber threats.  Instead, adequate countermeasures against cybersecurity threats today require companies to also look to their people and their processes.  During a recent webinar, Pamela Passman and Allen N. Dixon, compliance and IP protection experts at CREATe.org, discussed the current cyber threat landscape, along with practical ways businesses deploy people, processes and technology to get ahead of cyber risks and successfully prevent or neutralize internal and external threats across their entire organization.  The panelists provided steps companies can take to identify and protect their most important corporate assets and address risks from insiders, competitors and third parties by effectively training, managing and monitoring their people, processes and technology.  See also “Strategies for Preventing and Handling Cybersecurity Threats from Employees,” The Cybersecurity Law Report, Vol. 1, No. 1 (Apr. 8, 2015). 

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  • From Vol. 1 No.11 (Aug. 26, 2015)

    In the Wyndham Case, the Third Circuit Gives the FTC a Green Light to Regulate Cybersecurity Practices

    The Wyndham decision makes clear that there is a “‘top cop’ regulatory agency looking over privacy and security practices of private business: the Federal Trade Commission,” Cynthia Larose, a member of Mintz Levin, told The Cybersecurity Law Report.  On August 24, 2015, the Third Circuit denied Wyndham’s motion to dismiss an FTC complaint against it and held that the FTC can pursue Wyndham for allegedly weak data security practices that led to three breaches.  “The FTC is here to stay in the data privacy and security space,” Michael Gottlieb, a partner at Boies, Schiller & Flexner, said.  We examine the decision and its implications.  See also “The FTC Asserts Its Jurisdiction and Provides Ten Steps to Enhance Cybersecurity,” The Cybersecurity Law Report, Vol. 1, No. 8 (Jul. 15, 2015).

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