Earlier this month, an appellate panel of the federal DC Circuit unanimously held that individuals affected by a healthcare insurer’s data breach in 2014 could pursue claims against the insurer stemming from the cyberattack. In the process, the panel deepened a circuit split on the question of whether data breach victims have standing to pursue claims based solely on exposure of their sensitive personal information, while also adding significant risk of cyber-liability for companies that collect and store medical records of individuals.
In Attias v. CareFirst, Inc., the plaintiffs asserted claims on behalf of a purported class of one million customers of CareFirst, Inc. (“CareFirst”), a healthcare insurer in the Washington, DC metro area. In the 2014 cyberattack, hackers penetrated 22 computers and compromised the identifying health data of one million customers, including customer names, addresses, email addresses, subscriber ID numbers, and Social Security numbers. The plaintiffs did not allege that they had suffered any direct financial injury as a result of their identifying health data being exposed, but did allege they suffered an “increased risk of identity theft” as a result of CareFirst’s alleged negligent conduct. The district court granted CareFirst’s motion to dismiss, which asserted that the plaintiffs lacked standing to bring their alleged claims because they had not asserted either a present injury arising from the data breach or a “high enough likelihood of future injury.” Continue Reading D.C. Circuit Holds Cyber-Theft of Customers’ Medical Identifying Information Created Sufficient Increased Risk of Harm to Establish Standing