California class action over loss of server drives storing personal and medical information dismissed for lack of standing

A federal district court in California has dismissed, for lack of standing, a class action lawsuit against Health Net of California, Inc. and IBM over the loss of nine Health Net server drives that had been used to store personal and medical information for more than 800,000 California residents. Whitaker v. Health Net of California, 2012 WL 174961 (E.D. Cal. 2012). Plaintiffs alleged violation of the Confidentiality of Medical Information Act (CMIA) by Health Net and IBM, and violation of the Customer Records Act (CRA) by Health Net. 

Both Health Net and IBM moved to dismiss the complaint for lack of standing on the grounds that the plaintiffs did not assert they suffered any injury. In response, the plaintiffs argued they did have standing because of the threat posed by the loss of their information. The court agreed with IBM, concluding that because “the threat plaintiffs allege is wholly conjectural and hypothetical; plaintiffs lack standing to bring these claims.”

In line with other “no-harm” class actions we have discussed in past articles, Whitaker emphasizes that even in the class action context, the named plaintiffs must actually allege that they suffered some injury. It is not enough that one of the unnamed class members was injured or that the named plaintiffs’ unnamed family member was injured. The named plaintiff must himself actually suffer an injury and that injury cannot be hypothetical.



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