A Rigorous Analysis of Class Certification Issues in Consumer Data Breach Litigation

In this article, published in Bloomberg Law’s Privacy & Security Law Report, Michael Kheyfets from Edgeworth Economics and Michelle Visser, David Cohen, and Adam Winship from Ropes and Gray discuss “the importance of rigorous economic analysis to assess the plausibility of class-wide impact and damages in data breach class actions within the context of harms plaintiffs typically claim in these cases.”

The authors write that “data breach defendants face uncertainty in the wake of recent Sixth and Seventh Circuit cases that found that alleged risks to consumer data breach plaintiffs of future harm, when coupled with efforts by consumers to mitigate that risk, satisfied the Clapper standard.”

In approaching this issue, the authors discuss the relevant economic framework as well as “three theories of economic harm often presented by plaintiffs in these matters, including the cost of (i) fraudulent misuse of stolen information, (ii) time spent mitigating the potential effects of a breach, and (iii) data security, which plaintiffs claim they did not receive.”

Reproduced with permission from Privacy & Security Law Report, 16 PVLR 104 (Jan. 16, 2017). Copyright 2017 by The Bureau of National Affairs, Inc. (800-372-1033) (http://www.bna.com)