Hammond v. Bank of New York Mellon Corp.

The personal information (e.g., names, Social Security numbers, etc.) of a group of consumers (plaintiffs) was contained on backup tapes owned by the Bank of New York Mellon Corporation (bank) (defendant). On two separate occasions, while the bank was having a third-party vendor transport backup tapes, the backup tapes containing the consumers’ information were lost. The bank sent letters to the consumers (and others) notifying them of the loss. The letters stated that the bank was not sure whether the information had been accessed or used improperly. But the bank offered to provide the consumers with credit monitoring for 24 months, to insure up to $25,000 of identity theft, and to handle inquiries, among other services. The consumers brought a class action against the bank. The consumers asserted various claims sounding in negligence, breach of contract, breach of fiduciary duty, and violations of various state consumer-protection laws. Although none of the consumers were known to have suffered identity theft due to the stolen tapes, the consumers claimed that the future risk of harm entitled them to damages. The bank responded by moving to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that the consumers lacked constitutional standing to bring the claims because there was no case or controversy. In the alternative, the bank moved for summary judgment, arguing that the law did not recognize the consumers’ claims.