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Paul Zimmerman

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Another Court Dismisses Cyber Data Breach Suit against P.F. Chang’s

Talk to most general counsel in the hospitality industry today and you will likely hear that one of their biggest fears is a cyber-security data breach. While data security is a very real concern, general counsel can find a bit of relief in knowing that courts across the country are not simply rubber stamping the class action lawsuits that have predictably sprung up as a result of these breaches.

Late last year, M&R wrote about the dismissal of a class action cyber-security lawsuit against P.F. Chang’s in Illinois. Continuing with that trend, on March 20, 2015, a U.S. District Court Judge in Washington dismissed all claims in a similar lawsuit against P.F. Chang’s, concluding that the plaintiff had not alleged any actual harm in the wake of a data breach. 

The plaintiff alleged that he sustained damage by overpaying for P.F. Chang’s food, having to protect himself from unauthorized charges to his credit card, and fearing potential harassment in the future. The Court, however, rejected all of these claims. The Court explained that the plaintiff could not recover for his alleged anxiety since fear was “compensable only if [he] were able to show ‘with reasonable probability that he will actually’ suffer the feared harm.” The Court likewise found that the plaintiff did not sustain any damage by having to put himself onto credit fraud watch lists and/or by monitoring his credit, and similarly did not explain how the breach lowered the value of his meal. Finally, the Court refused to find the existence of a fiduciary relationship as between the plaintiff and P.F. Chang’s, thus thwarting any claim for strict liability.

While companies must continue to be mindful of potential cyber-security data breaches, this most recent decision in Washington illustrates the skepticism with which judges across the country have been viewing these types of class action lawsuits. As the Judge noted:

“Recent disclosures of cyber-security problems – such as those involving Target, Sony and/or Home Depot – suggest that, while the breaches make headlines, they do not have much effect on consumer activities.” 

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.