The Nebraska Supreme Court recently ruled on claims for a variance from the requirements of Omaha’s zoning code based alleging unnecessary hardship. The case is a helpful reminder of the importance of seeking legal advice before making substantial investments or changes relating to land use
Recently, health insurer CareFirst Inc. filed a petition with the Supreme Court of the United States to resolve a disagreement among federal appellate courts on the issue of whether victims of data breaches may sue in federal court when they do not allege a present injury. This suit, on appeal from the United States Court of Appeals for the District of Columbia Circuit, will largely center on the idea of standing, a threshold requirement for any plaintiff hoping to sue in federal court. More specifically, CareFirst Inc. alleges the D.C. Circuit erred in reasoning that a plaintiff has standing to sue in federal court simply by virtue of the fact and nature of the data that was accessed by hackers. The data included names, birth dates, email addresses, and subscriber identification numbers.
Pursuant to the federal law, standing requires that a plaintiff suffer some sort of injury to sue. Future injuries may be actionable. However, courts will require that there be a substantial risk of injury. For data breach victims that have not seen evidence of identity theft or fraud, the main question is whether theft of private information as a result of a data breach creates a substantial risk of an identity theft to be actionable.
This August, the United States Court of Appeals for the Eighth Circuit, which hears cases from federal courts in Iowa and Nebraska, ruled in Alleruzzo v. SuperValu, Inc. that a district court properly dismissed many plaintiffs from a data breach action. In that case, hackers gained access to customers’ card information from a grocery store network. This included names, card numbers, expiration dates, card verification values codes, and personal identification numbers. Several customers filed suit under a variety of theories, but only alleged that one customer suffered a single fraudulent charge. Due to lack of injury, the case was dismissed by the district court.
On appeal, the plaintiffs argued that theft of their card information created a substantial risk that they will suffer identity theft in the future. The court initially noted that because card information does not contain social security numbers and birth dates, the information cannot plausibly be used to open new accounts, a form of identity theft most harmful to consumers. It also analyzed a 2007 Government Accountability Office report, which concluded that based on available information, most breaches have not resulted in detected incidents of identity theft. Since the plaintiffs presented no facts from which the court could conclude that plaintiffs suffered a substantial risk of future identity theft, they had no standing to sue in federal court.
The Eighth Circuit and the D.C. Circuit are not the only courts to consider the issue. Like the Eighth Circuit, the United States Court of Appeals for the Fourth Circuit, in Beck v. McDonald, concluded that the risk of identity theft was too hypothetical to allow plaintiffs to sue. Meanwhile, the United States Courts of Appeals for the Sixth and Seventh Circuit have stated, in Reijas v. Neiman Marcus and Galaria v. Nationwide Mutual, that data breach victims suffered an imminent risk of identity theft when the breach occurred.
While the Supreme Court has not yet agreed to hear CareFirst’s arguments, this is certainly an issue to keep watching. Should courts continue to state that data breach victims have standing to sue businesses by virtue of the fact that hackers gained access to the data, such litigation can be expected to rise as data breaches continue.
Erickson | Sederstrom’s Richard J. Gilloon and Nicholas F. Sullivan, together with Kevin D. Weakley and Leilani R. Leighton from the Kansas law firm Wallace Saunders Austin Brown & Enochs, obtained a $1.59 million dollar judgment for their client, Hassanin Aly, against Hanzada for Import and Export Company, Ltd. (“Hanzada”).
Hon. William M. Connolly, who retired after serving twenty-two years on the Nebraska Supreme Court, has joined Erickson|Sederstrom as Of Counsel with a practice in Mediation and Arbitration.
Judge Connolly will utilize his experience on the Nebraska Supreme Court and 29 years of prior experience as a trial lawyer to help parties reach just resolutions through the mediation and arbitration processes. Judge Connolly will also offer appellate consulting services to firms and attorneys seeking assistance to develop appellate strategies, review and edit briefs, and prepare for oral argument.
The Iowa Court of Appeals recently affirmed a district court’s denial of a motion for new trial based on juror misconduct. In Resetich v. State Farm, the Leanna Resetich was involved in a car accident in which she sustained injuries. Her and her husband eventually sued State Farm for underinsured motorist coverage and loss of consortium. The jury returned a verdict for $48,000, and assessed Ms. Resetich’s fault at 45%. Consequently, the judge reduced the plaintiff’s judgment to $26,500.
The plaintiffs then filed a motion for a new trial alleging, among other things, juror misconduct. In support of the assertions, they produced a juror’s sworn statement attesting that the jurors had already considered Ms. Resetich’s fault in calculating the $48,000 verdict, an action prohibited by the jury instructions. The district court refused to admit the affidavit and denied the motion for new trial. Plaintiffs appealed.
On appeal, the court noted that I.C.A. § 5.606(b) prohibits the use of juror testimony unless it refers to extraneous prejudicial information or outside influences that improperly affected jurors. In order to protect the sanctity of the juror room, any thoughts, emotions, or internal matters are not admissible. The court reasoned that jurors’ understanding or lack thereof represented the internal workings of the jury, which was barred by the evidence statute. Thus, the district court properly excluded the juror’s affidavit and denied the motion for new trial on the grounds of juror misconduct.
For any litigant, this result is upsetting. I.C.A. §5.606(b) is a statute used in different forms across the country to protect jurors. To avoid a confused jury, it is important to have an attorney that fights for clearly worded jury instructions and protects an appellate record in case unfair instructions are sent to the jury room.
If you are considering suit or facing a complaint, attorneys at Erickson | Sederstrom may be able to assist you on a variety of legal topics. Attorney MaKenna Dopheide may be reached at (402) 397-2200.
In a case of first impression for the United States Court of Appeals for the Eighth Circuit, the court ruled that, in most cases, the Americans with Disabilities Act (ADA) does not cover obesity alone. In Morriss v. BSNF Railway Company, Mr. Morriss sued the railroad when his offer of employment was revoked after a physical. The would-be employee failed a physical when his Body Mass Index (BMI) was found to violate company policy, even though he did not have any current health concerns or work restrictions. The company, concerned about health and safety risks to which an employee with a high BMI may be susceptible, had instituted a policy refusing to hire candidates with a high BMI for safety-sensitive positions. Mr. Morriss sued, arguing the company discriminated against him in violation of the ADA. The company was granted summary judgment, and Mr. Morriss appealed.
The ADA prohibits a covered employer from discriminating against any “qualified individual on the basis of disability”. Of the several definitions of “disability”, the Eighth Circuit focused on whether Mr. Morriss had an actual or perceived physical impairment. A physical impairment, as defined by the EEOC, means a physiological disorder affecting one or more body systems. As a result, the court concluded that an individual’s weight is considered covered when it falls outside the normal range and occurs as a result of a physiological disorder. Because Mr. Morriss had no evidence that his weight was the result of a physiological disorder, the court affirmed the district court’s decision. While this decision does not mean that ADA coverage is out of reach for claimants with obesity, it certainly excludes a substantial amount of claims. When conducting physicals, Iowa and Nebraska employers with similar policies should take care that the candidate does not have any underlying disorder causing obesity or a covered disability arising from obesity to avoid liability under the ADA.