Plaintiffs who were allegedly the victims of identity theft because of the theft of two laptops from their health insurer can pursue their litigation against the firm, said a federal appellate court in partially overturning a lower court's ruling in the putative class action suit that dismissed the case.

According to Wednesday's ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Jean Resnick et al. v. AvMed Inc., in December 2009, two laptop computers containing sensitive information on about 1.2 million current and former AvMed members were stolen from the Gainesville, Fla., office of Miami-based AvMed. This included personal information of Jauna Curry and William Moore, the plaintiffs who were the focus of the ruling.

Ms. Curry's information was used by an unknown party in October 2010, 10 months after the laptop theft, with Bank of America Corp. accounts opened in her name, as well as credit cards that were activated and used to make unauthorized purchases.

Mr. Moore's sensitive information was used in February 2011, 14 months after the laptop theft, with an account opened in his name with E-Trade Financial Corp. that was subsequently overdrawn.

A lawsuit filed against AvMed on charges including negligence, negligence per se, breach of contract, breach of implied contract, breach of the implied covenant of good faith and dealing, breach of fiduciary duty and restitution/unjust enrichment, was dismissed by a lower court, which held that the plaintiffs had failed to charge a “cognizable injury.”

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However, in its 2-1 ruling, the appellate panel said, “Plaintiffs allege that they have become victims of identity theft and have suffered monetary damages as a result. This constitutes an injury in fact under the law.”

The ruling also said that despite the length of time between the laptops' theft and the identity thefts, it is plausible the two events were connected. Plaintiffs “have sufficiently alleged a nexus between the data theft and the identity theft and therefore meet the federal pleading standards,” said the ruling.

“People with nefarious interests are taking advantage of the plethora of opportunities to gain access to private information and use it in ways that cause real harm,” said the ruling. “Even though the perpetrators of these crimes often remain unidentified and the victims are left to clean up the damage caused by these identity thieves, cases brought by these victims are subject to the same pleading standards as are plaintiffs in all civil suits.

“Here plaintiffs have pled a cognizable injury and have pled sufficient facts to allow for a plausible inference that AvMed's failures in securing their data resulted in their identities being stolen.”

The court upheld dismissal of charges of entitlement to relief under Florida law for the claims of negligence per se and breach of the implied covenant of good faith and fair dealing. The case was remanded to the lower court for further proceedings.