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Home Depot efforts to avoid data breach suit hinge on judge's interpretation

Home Depot efforts to avoid data breach suit hinge on judge's interpretation

Home Depot Inc.'s success in having litigation filed by consumers related to its 2014 data breach dismissed could hinge on whether the judge agrees a U.S. Supreme Court case on the issue of standing is relevant, attorneys say.

In a memorandum supporting its motion to dismiss filed in U.S. District Court in Atlanta last week, the retailer said litigation filed by consumers in connection with the breach should be dismissed because plaintiffs have not suffered any injury attributable to the company.

The memorandum says most of the named plaintiffs admit that they have been fully reimbursed for their losses “and do not even allege any monetary loss.”

“The few plaintiffs who allege some economic harm fail to explain why the losses they allege were not reimbursed” and falls “far short” of the U.S. Supreme Court's 2013 decision in Clapper V. Amnesty Int'l USA, which states alleged injuries must be “concrete, particularized, and actual or imminent,” the Home Depot memorandum states.

Michael J. Gottlieb, an attorney with law firm Boies, Schiller & Flexner L.L.P. in Washington who is not involved in the case, said the judge may make his ruling on the issue based on his evaluation of these plaintiffs.

“The courts have not yet provided a uniform theory for how to evaluate allegations of financial harm at the motion to dismiss stage,” Mr. Gottlieb said.

He pointed to the refusal in December by U.S. District Judge Paul A. Magnuson in St. Paul, Minnesota, to dismiss litigation filed by financial institutions against Minneapolis-based Target Corp. in connection with its 2013 data breach.

“At this preliminary stage of the litigation, plaintiffs have plausibly pled a general negligence case,” Judge Magnuson held.

“It's just not clear” how the Atlanta court will view the plaintiffs in the Home Depot case who allege they have been harmed, Mr. Gottlieb said. It “depends on how the court construes those allegations, and whether it takes a more generous approach,” as Judge Magnuson did, or views the issue more strictly.

“The chances are pretty good” the case will be dismissed, said Cynthia LaRose, a member of law firm Mintz, Levin, Cohn, Ferris, Glovsky & Popeo P.C. in Boston who is also not involved in the case.

She added, however, that it will depend on whether the court decides to follow the line of reasoning in the Clapper case.

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