Data Exposure Claim Survives Motion to Dismiss

The D.C. District court has issued a noteworthy opinion in the ongoing consolidated litigation related to last year's potential theft of 26.5 million records (article here, case number 1:06-mc-00506). As described in this article, the plaintiffs in the case alleged damages based on "embarrassment, mental distress, emotional trauma and the threat of future identity theft." Some plaintiffs also requested compensation for having to pay for credit monitoring services. As has been noted previously (e.g., here), Plaintiffs alleging those types of damages generally lose. In fact, earlier this year, the D.C. District court dismissed a data exposure case alleging similar damages based on the proposition that "an allegation of increased risk of identity theft due to lost or stolen personal data, without more, is insufficient to demonstrate a cognizable injury." Randolph v. ING, 486 F. Supp. 2d 1, 7 (D.D.C. 2007). Given that history, the court's decision to let the litigation against the department of veteran's affairs seems, at least initially, to be a departure from what had been settled precedent. While it is unclear what effect this decision will have in the future, because of it, the underlying case is definitely worth watching.