wildercb/PrivacyTextBooks1.2 · Datasets at Hugging Face

text stringlengths 0 118
identity theft because “the likelihood that any individual Plaintiff will suffer
harm remains entirely speculative.” The court elaborated that whether the
plaintiffs will be harmed is “entirely dependent on the actions of an
unknown third party—namely, the thief. At this point, we do not know who
she was, how much she knows about computers, or what she has done with
the tapes.” The court later noted that “Unfortunately, there is simply no way
to know until either the crook is apprehended or the data is actually used.”66
The problem is that thieves like this are rarely apprehended. Although
the court noted that it is “reasonable to fear the worst in the wake of such a
theft,” the court still concluded that “Plaintiffs thus do not have standing
based on risk alone, even if their fears are rational.” The court also stated:
“Nor is the cost involved in preventing future harm enough to confer
standing, even when such efforts are sensible. There is, after all, nothing
unreasonable about monitoring your credit after a data breach.” But the
court ultimately concluded it was bound by Clapper and could not
recognize harm for increased risk for identity theft.67
Other courts have held that Clapper doesn’t foreclose finding harm on
these theories. For example, in Remijas v. Neiman Marcus Group, the
Seventh Circuit held that the plaintiffs could pursue their lawsuit when
hackers broke into Neiman Marcus’s database.68 As the court stated: “Why
else would hackers break into [an organization’s] database and steal
consumers’ private information? Presumably, the purpose of the hack is,
sooner or later, to make fraudulent charges or assume those consumers’
identities.”69
The story before Clapper was that courts were deeply divided and about
whether data breaches caused harm. The story after Clapper didn’t change
very much—courts remained divided.
In 2016, another Supreme Court case attempted to add more clarity to
the issue of standing. In Spokeo, Inc. v. Robins, the Court declared that there
must be “concrete” harm for standing, yet it acknowledged that “intangible
harm,” and even the “risk” of harm, could be sufficient to establish a
concrete harm if intangible injury has a “close relationship to a harm that
has traditionally been regarded as providing a basis for a lawsuit in English
or American courts.70 The Supreme Court, however, failed to elaborate
much further. No guidance was provided to distinguish intangible harms
that are sufficient for standing from ones that are not. Spokeo ended up
resolving nothing.
After Spokeo, the courts have remained divided on the issue of standing.
The law is thus deadlocked with two drastically different resolutions on
standing and harm.
One of the major challenges in data breach cases is that hackers are
rarely caught. Their precise motives might never be known. Personal data
can circulate in dark corners for a long time because information, such as
dates of birth, mothers’ maiden names, and Social Security Numbers,
doesn’t change. Because there are many breaches, it also becomes difficult
to trace a harm to one particular breach. The hackers aren’t going to
voluntarily step forward and explain where they got their data and what
they are going to do with it. Courts that demand that plaintiffs prove harm
in this way are demanding the impossible.
FAILURE TO HELP VICTIMS
When lawsuits succeed, they rarely do much to compensate victims even if
they occasionally manage to have a small impact deterring future bad
behavior.
Litigation is mostly resolved via settlement. A study of 230 lawsuits for
data security breaches from 2004–2014 showed a settlement rate of 50
percent. The settlement rate during this time was particularly interesting
because most cases during this period were being dismissed for lack of
harm. Even cases that weren’t strong settled for millions of dollars—mainly
because of the high costs of litigating a case, even if victorious.
The settlements do little to help victims, even if they act as a deterrent
for companies. They amount to just cents to a few dollars per victim, and
most victims don’t receive a penny. For example, Ashley Madison, an
online “dating” service for adulterers, settled with users for $11.2 million
for its 2015 breach involving 37 million people’s personal data.71 Anthem,
a large health plan, settled for $115 million for a breach involving nearly 80
million records.72
Just like the safeguards laws and breach notification laws, lawsuits can
ratchet up the cost and pain, but often just by a marginal percentage and not
enough to be a significant additional deterrent. Lawsuits make a breach feel
worse, but they don’t do much for consumers.
As with the other types of data security law, the problems with private
litigation aren’t inherent and unfixable. Private litigation has the potential to
have a positive impact. But thus far, cases are stuck on the issue of harm,
and they are dismissed or settled before they can progress to developing
duties and standards. Litigation is focused almost entirely on the
organizations that are breached, but these organizations are only partly
responsible for the problem.
AN UNHEALTHY OBSESSION WITH THE BREACH
After a data breach, the law will spring into action. Breach notification laws
will often be triggered, requiring notification of a breach. Regulatory
agencies will launch an investigation and might bring an enforcement
action. A blizzard of lawsuits will likely be filed.
This combination—a triple punch in the gut—is expensive and
demanding of resources. That would be okay if the rules and enforcement
fostered a secure data ecosystem. But it’s not working.
Since the ChoicePoint breach was announced in 2005, there have been
two broad trends. First, data breach laws have proliferated. Countless new
laws have been passed, and enforcement has increased. Second, data
breaches are occurring more frequently and at an increasing size and scale.
The same breach-causing mistakes are being made. Even with more data
breach laws than ever on the books, we are still setting records for data
security failures.
One conclusion to draw from the law’s failure is that the situation is
hopeless: The law can’t do much, and we are doomed. But we reach another
conclusion, one that is much more hopeful: The law can do a lot to improve
data security, but it requires a major shift in focus and approach.
Although the law fails for a number of reasons, there is an overarching
theme behind the law’s failure—data security law focuses too much on the
breach.
For example, breach notification laws revolve around the breach.

identity theft because “the likelihood that any individual Plaintiff will suffer

harm remains entirely speculative.” The court elaborated that whether the

plaintiffs will be harmed is “entirely dependent on the actions of an

unknown third party—namely, the thief. At this point, we do not know who

she was, how much she knows about computers, or what she has done with

the tapes.” The court later noted that “Unfortunately, there is simply no way

to know until either the crook is apprehended or the data is actually used.”66

The problem is that thieves like this are rarely apprehended. Although

the court noted that it is “reasonable to fear the worst in the wake of such a

theft,” the court still concluded that “Plaintiffs thus do not have standing

based on risk alone, even if their fears are rational.” The court also stated:

“Nor is the cost involved in preventing future harm enough to confer

standing, even when such efforts are sensible. There is, after all, nothing

unreasonable about monitoring your credit after a data breach.” But the

court ultimately concluded it was bound by Clapper and could not

recognize harm for increased risk for identity theft.67

Other courts have held that Clapper doesn’t foreclose finding harm on

these theories. For example, in Remijas v. Neiman Marcus Group, the

Seventh Circuit held that the plaintiffs could pursue their lawsuit when

hackers broke into Neiman Marcus’s database.68 As the court stated: “Why

else would hackers break into [an organization’s] database and steal

consumers’ private information? Presumably, the purpose of the hack is,

sooner or later, to make fraudulent charges or assume those consumers’

identities.”69

The story before Clapper was that courts were deeply divided and about

whether data breaches caused harm. The story after Clapper didn’t change

very much—courts remained divided.

In 2016, another Supreme Court case attempted to add more clarity to

the issue of standing. In Spokeo, Inc. v. Robins, the Court declared that there

must be “concrete” harm for standing, yet it acknowledged that “intangible

harm,” and even the “risk” of harm, could be sufficient to establish a

concrete harm if intangible injury has a “close relationship to a harm that

has traditionally been regarded as providing a basis for a lawsuit in English

or American courts.70 The Supreme Court, however, failed to elaborate

much further. No guidance was provided to distinguish intangible harms

that are sufficient for standing from ones that are not. Spokeo ended up

resolving nothing.

After Spokeo, the courts have remained divided on the issue of standing.

The law is thus deadlocked with two drastically different resolutions on

standing and harm.

One of the major challenges in data breach cases is that hackers are

rarely caught. Their precise motives might never be known. Personal data

can circulate in dark corners for a long time because information, such as

dates of birth, mothers’ maiden names, and Social Security Numbers,

doesn’t change. Because there are many breaches, it also becomes difficult

to trace a harm to one particular breach. The hackers aren’t going to

voluntarily step forward and explain where they got their data and what

they are going to do with it. Courts that demand that plaintiffs prove harm

in this way are demanding the impossible.

FAILURE TO HELP VICTIMS

When lawsuits succeed, they rarely do much to compensate victims even if

they occasionally manage to have a small impact deterring future bad

behavior.

Litigation is mostly resolved via settlement. A study of 230 lawsuits for

data security breaches from 2004–2014 showed a settlement rate of 50

percent. The settlement rate during this time was particularly interesting

because most cases during this period were being dismissed for lack of

harm. Even cases that weren’t strong settled for millions of dollars—mainly

because of the high costs of litigating a case, even if victorious.

The settlements do little to help victims, even if they act as a deterrent

for companies. They amount to just cents to a few dollars per victim, and

most victims don’t receive a penny. For example, Ashley Madison, an

online “dating” service for adulterers, settled with users for $11.2 million

for its 2015 breach involving 37 million people’s personal data.71 Anthem,

a large health plan, settled for $115 million for a breach involving nearly 80

million records.72

Just like the safeguards laws and breach notification laws, lawsuits can

ratchet up the cost and pain, but often just by a marginal percentage and not

enough to be a significant additional deterrent. Lawsuits make a breach feel

worse, but they don’t do much for consumers.

As with the other types of data security law, the problems with private

litigation aren’t inherent and unfixable. Private litigation has the potential to

have a positive impact. But thus far, cases are stuck on the issue of harm,

and they are dismissed or settled before they can progress to developing

duties and standards. Litigation is focused almost entirely on the

organizations that are breached, but these organizations are only partly

responsible for the problem.

AN UNHEALTHY OBSESSION WITH THE BREACH

After a data breach, the law will spring into action. Breach notification laws

will often be triggered, requiring notification of a breach. Regulatory

agencies will launch an investigation and might bring an enforcement

action. A blizzard of lawsuits will likely be filed.

This combination—a triple punch in the gut—is expensive and

demanding of resources. That would be okay if the rules and enforcement

fostered a secure data ecosystem. But it’s not working.

Since the ChoicePoint breach was announced in 2005, there have been

two broad trends. First, data breach laws have proliferated. Countless new

laws have been passed, and enforcement has increased. Second, data

breaches are occurring more frequently and at an increasing size and scale.

The same breach-causing mistakes are being made. Even with more data

breach laws than ever on the books, we are still setting records for data

security failures.

One conclusion to draw from the law’s failure is that the situation is

hopeless: The law can’t do much, and we are doomed. But we reach another

conclusion, one that is much more hopeful: The law can do a lot to improve

data security, but it requires a major shift in focus and approach.

Although the law fails for a number of reasons, there is an overarching

theme behind the law’s failure—data security law focuses too much on the

breach.

For example, breach notification laws revolve around the breach.