Risk and Anxiety: A Theory of Data Breach Harms

Daniel Solove
Founder of TeachPrivacy

Risk and Anxiety Theory of Data Breach Harms

My new article was just published: Risk and Anxiety: A Theory of Data Breach Harms,  96 Texas Law Review 737 (2018).  I co-authored the piece with Professor Danielle Keats Citron.  We argue that the issue of harm needs a serious rethinking. Courts are too quick to conclude that data breaches don’t create harm.  There are two key dimensions to data breach harm — risk and anxiety — both of which have been an area of struggle for courts.

Many courts find that anything involving risk is too difficult to measure and not concrete enough to constitute actual injury. Yet, outside of the world of the judiciary, other fields and industries have recognized risk as something concrete. Today, risk is readily quantified, addressed, and factored into countless decisions of great importance. As we note in the article: “Ironically, the very companies being sued for data breaches make high-stakes decisions about cyber security based upon an analysis of risk.” Despite the challenges of addressing risk, courts in other areas of law have done just that. These bodies of law are oddly ignored in data breach cases.

When it comes to anxiety — the emotional distress people might feel based upon a breach — courts often quickly dismiss it by noting that emotional distress alone is too vague and unsupportable in proof to be recognized as harm. Yet in other areas of law, emotional distress alone is sufficient to establish harm. In many cases, this fact is so well-settled that harm is rarely an issue in dispute.

We aim to provide greater coherence to this troubled body of law.   We work our way through a series of examples — various types of data breach — and discuss whether harm should be recognized. We don’t think harm should be recognized in all instances, but there are many situations where we would find harm where the majority of courts today would not.

The article can be downloaded for free on SSRN.

Here’s the abstract:

In lawsuits about data breaches, the issue of harm has confounded courts. Harm is central to whether plaintiffs have standing to sue in federal court and whether their claims are viable. Plaintiffs have argued that data breaches create a risk of future injury from identity theft or fraud and that breaches cause them to experience anxiety about this risk. Courts have been reaching wildly inconsistent conclusions on the issue of harm, with most courts dismissing data breach lawsuits for failure to allege harm. A sound and principled approach to harm has yet to emerge, resulting in a lack of consensus among courts and an incoherent jurisprudence.

In the past five years, the U.S. Supreme Court has contributed to this confounding state of affairs. In 2013, the Court in Clapper v. Amnesty International concluded that fear and anxiety about surveillance – and the cost of taking measures to protect against it – were too speculative to constitute “injury in fact” for standing. The Court emphasized that injury must be “certainly impending” to warrant recognition. This past term, the U.S. Supreme Court in Spokeo v. Robins issued an opinion aimed at clarifying the harm required for standing in a case involving personal data. But far from providing guidance, the opinion fostered greater confusion. What the Court made clear, however, was that “intangible” injury, including the “risk” of injury, could be sufficient to establish harm. In cases involving informational injuries, when is intangible injury like increased risk and anxiety “certainly impending” or “substantially likely to occur” to warrant standing? The answer is unclear.

Little progress has been made to harmonize this troubled body of law, and there is no coherent theory or approach. In this essay, we examine why courts have struggled when dealing with harms caused by data breaches. The difficulty largely stems from the fact that data breach harms are intangible, risk-oriented, and diffuse. Harms with these characteristics need not confound courts; the judicial system has, been recognizing intangible, risk-oriented, and diffuse injuries in other areas of law.

We argue that courts are far too dismissive of certain forms of data breach harm. In many instances, courts should find that data breaches cause cognizable harm. We explore how existing legal foundations support the recognition of such harm. We demonstrate how courts can assess risk and anxiety in a concrete and coherent way.

The final published version of the article is now available on SSRN.

 

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This post was authored by Professor Daniel J. Solove, who through TeachPrivacy develops computer-based privacy training, data security training, HIPAA training, and many other forms of awareness training on privacy and security topics.  Professor Solove also posts at his blog at LinkedIn.  His blog has more than 1 million followers.

Privacy+Security ForumProfessor Solove is the organizer, along with Paul Schwartz of the Privacy + Security Forum (Oct. 3-5, 2018 in Washington, DC), an annual event that aims to bridge the silos between privacy and security. 

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