Bohnak v. Marsh & McLennan Companies, Inc.

Background

Nancy Bohnak and Janet Lea Smith brought a proposed nationwide class action against Marsh & McLennan Companies, Inc. and Marsh & McLennan Agency, LLC. They alleged that a data breach exposed personal information held by the defendants, including their names and Social Security or other federal tax identification numbers. The plaintiffs alleged that the defendants failed to adequately protect the information, warn about inadequate security, and use reasonable security procedures.

The complaint asserted state-law claims for negligence, breach of implied contract, and breach of confidence. The plaintiffs sought monetary damages and injunctive relief. The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction and under Rule 12(b)(6) for failure to state a claim.

Subject-Matter Jurisdiction and Standing

The defendants argued that the plaintiffs lacked standing because they had not alleged a concrete injury. The court agreed that the future risk of identity theft, standing alone, was too speculative because the complaint did not allege that the plaintiffs’ or other class members’ information had been misused or that identity theft was imminent.

The court nevertheless held that the plaintiffs plausibly alleged a separate concrete injury from the unauthorized exposure of their private personal information. It found that this alleged harm was sufficiently similar to the privacy harm recognized by the common-law tort of public disclosure of private information. The court therefore denied the motion to dismiss for lack of subject-matter jurisdiction.

Failure to State a Claim

The court then considered whether the complaint plausibly alleged damages supporting the state-law claims. It held that the plaintiffs could only speculate about whether future identity theft would occur and about the amount of any resulting harm. Those alleged damages were not reasonably certain or capable of proof with reasonable certainty.

The court also rejected the plaintiffs’ allegations that they had already lost time and money responding to the increased risk. It found that these losses were not proximately caused by the disclosure itself, which was the only injury supporting standing. The court further held that the plaintiffs could not obtain injunctive relief because they had not shown irreparable injury; the alleged harm was based on the same facts as the requested monetary relief and was therefore compensable with money damages.

Disposition

Judge Alvin K. Hellerstein granted the motion to dismiss for failure to state a claim. The court denied the motion to dismiss for lack of subject-matter jurisdiction, directed the clerk to terminate the motion, and granted judgment to the defendants. The opinion does not state that either disposition was with or without prejudice.