887 F.3d 826 (7th Cir. 2018), 17-2408, Dieffenbach v. Barnes & Noble, Inc.

Docket Nº:17-2408
Citation:887 F.3d 826
Opinion Judge:Easterbrook, Circuit Judge.
Party Name:Heather DIEFFENBACH and Susan Winstead, Plaintiffs-Appellants, v. BARNES & NOBLE, INC., Defendant-Appellee.
Attorney:Ben Barnow, Attorney, Erich Schork, Attorney, Barnow & Associates, P.C., Chicago, IL, Joseph Siprut, Attorney, Siprut PC, Chicago, IL, for Plaintiffs-Appellants. Peter V. Baugher, Attorney, Baugher Dispute Resolution LLC, Chicago, IL, Kenneth L. Chernof, Attorney, Allyson Himelfarb, Attorney, Arn...
Judge Panel:Before Wood, Chief Judge, and Easterbrook and Hamilton, Circuit Judges.
Case Date:April 11, 2018
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit
SUMMARY

Barnes & Noble discovered that its PIN pads, used to verify payment information, had been compromised. The hackers acquired customers’ names, card numbers and expiration dates, and PINs. Some customers temporarily lost the use of their funds while waiting for banks to reverse unauthorized charges; some spent money on credit-monitoring services; some lost the value of their time devoted to... (see full summary)

 
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887 F.3d 826 (7th Cir. 2018)

Heather DIEFFENBACH and Susan Winstead, Plaintiffs-Appellants,

v.

BARNES & NOBLE, INC., Defendant-Appellee.

No. 17-2408

United States Court of Appeals, Seventh Circuit

April 11, 2018

Rehearing and Rehearing En Banc Denied May 10, 2018[*]

Argued December 6, 2017

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Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 12 C 8617— Andrea R. Wood, Judge .

Ben Barnow, Attorney, Erich Schork, Attorney, Barnow & Associates, P.C., Chicago, IL, Joseph Siprut, Attorney, Siprut PC, Chicago, IL, for Plaintiffs-Appellants.

Peter V. Baugher, Attorney, Baugher Dispute Resolution LLC, Chicago, IL, Kenneth L. Chernof, Attorney, Allyson Himelfarb, Attorney, Arnold & Porter Kaye Scholer LLP, Washington, DC, for Defendant-Appellee.

Before Wood, Chief Judge, and Easterbrook and Hamilton, Circuit Judges.

OPINION

Easterbrook, Circuit Judge.

In 2012 Barnes & Noble discovered that scoundrels had compromised some of the machines, called PIN pads, that it used to verify payment information. They acquired details such as customers’ names, card numbers and expiration dates, and PINs. Some customers temporarily lost the use of their funds while waiting for banks to reverse unauthorized charges to their accounts. Some spent money on credit-monitoring services to protect their financial interests. Some lost the value of their time devoted to acquiring new account numbers and notifying businesses of these changes. Many people use credit or debit cards to pay bills automatically; every time the account number changes, these people must devote some of their time and mental energy to notifying merchants that the old numbers are invalid and new ones must be used. In this suit under state law, plaintiffs seek to collect damages not from the data thieves but from Barnes & Noble. Jurisdiction rests on the Class Action Fairness Act, 28 U.S.C. § 1332(d), because the proposed class contains at least 100 members, the amount in controversy exceeds $5 million,

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and minimal diversity of citizenship exists.

The district court initially held that the representative plaintiffs had suffered no loss at all— that they did not even have standing to sue. 2013 U.S. Dist. LEXIS 125730 (N.D.Ill. Sept. 3, 2013). After this court held in Remijas v. Neiman Marcus Group, LLC, 794 F.3d 688 (7th Cir. 2015), and Lewert v. P.F. Chang’s China Bistro, Inc., 819 F.3d 963 (7th Cir. 2016), that consumers who experience a theft of their data indeed have standing, the district court (acting through a different judge) concluded that the complaint alleges injury. 2016 U.S. Dist. LEXIS 137078 at *8-11 (N.D.Ill. Oct. 3, 2016). But the judge nonetheless dismissed the complaint, ruling that it does not adequately plead damages. Id . at *13-25. See also 2017 U.S. Dist. LEXIS 97161 (N.D.Ill. June 13, 2017) (dismissing an amended complaint).

This seems to us a new label for an old error. To say that the plaintiffs have standing is to say that they have alleged injury in fact, and if they have suffered an injury then damages...

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