Arkansas Federal Court Agrees with Defense that Plaintiff Failed to Establish Injury-in-Fact and Therefore Lacked Standing to Prosecute the Putative Class Action
Plaintiff filed a putative class action in federal court against Acxiom after a computer hacker compromised the files that the company maintained on its corporate clients, alleging that “Acxiom’s lax security jeopardized her privacy and left her at a risk of receiving junk mail and of becoming a victim of identity theft.” Bell v. Acxiom Corp., ___ F.Supp.2d ___, 2006 WL 2850042 (E.D. Ark. October 3, 2006). Defense attorneys moved to dismiss the class action complaint on the ground that plaintiff lacked standing to prosecute the action. The district court agreed and granted the motion to dismiss.
“Acxiom is a data bank that stores marketing information about its clients’ customers. Acxiom takes this information and ‘match[es] names with lifestyles and demographic information from other sources . . . [to] give . . . [its] client a clear picture of the people buying its products and services.’” Slip Opn., at 1. A computer hacker exploited a weakness in the company’s computer system, downloaded data and sold it to a marketing company who used the names and addresses for direct mail advertising. Plaintiff’s class action alleged that she and others were “at a higher risk of receiving junk mail and of being an identity theft victim” because “Acxiom failed to protect its clients’ data.” Id., at 2. Defense attorneys argued that plaintiff lacked standing because she had not established injury in fact; the court agreed.
The district court noted that the burden of establishing standing lies with the plaintiff. The elements of standing are (1) injury in fact, (2) causal connection between injury and conduct at issue, and (3) that the injury will be redressed by a favorable decision. Slip Opn., at 3. “Assertions of potential future injury do not satisfy the injury-in-fact test. ‘A threatened injury must be certainly impending to constitute injury in fact.’” Id. (citation omitted). Following the application test, the court agreed with defense attorneys that plaintiff’s alleged damages were entirely speculative. The district court explained at pages 5 and 6:
Plaintiff has not plead that she has received a single marketing mailer or had her identity stolen. Moreover, several courts have held that the receipt of unsolicited and unwanted mail does not constitute actual harm. Additionally, while there have been several lawsuits alleging an increased risk of identity theft, no court has considered the risk itself to be damage. (Footnotes omitted.)
In fact, plaintiff could not even demonstrate that any of her information was stolen from Acxiom’s database. Slip Opn., at 6. Accordingly, the motion to dismiss was granted. Id., at 7.
NOTE: Acxiom also moved to dismiss the complaint on the ground that plaintiff “had not stated a claim upon which relief can be granted,” Slip Opn., at 3, but the district court did not reach that issue.