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From Health Law Daily, August 18, 2015

Patients have no standing to sue hospital for computer theft

By Mary Damitio, J.D.

Putative class action members did not suffer actual injuries and therefore lacked standing to bring suit after computers were stolen from their health care provider’s office because there was no evidence that the personal information was disclosed to the public or used in an unauthorized manner, an Illinois appellate court ruled in affirming the dismissal of the cases. The members’ claims that they were at a heightened risk for identify theft were insufficient to establish that they suffered any actual harm (Maglio v. Advocate Health and Hospitals Corp., August 6, 2015, Jorgensen, A.).

Background. In July 2013, four, password-protected computers were stolen from Advocate Health and Hospitals Corporation’s administrative building in Park Ridge, Illinois. The computers contained information about four million patients. Advocate subsequently notified the patients of the theft, set up a call center for questions, and offered one year of free credit-monitoring, which included identify theft resolution assistance and identify theft insurance.

Lawsuit. Matias Maglio and Veronica Vides filed separate putative class action complaints against Advocate Health and Hospitals Corporation, individually and d/b/a Advocate Medical Group alleging negligence, invasion of privacy, consumer fraud, and violations of the Illinois Personal Information Protection Act (815 ILCS 530/1 et seq.). The class action complaints alleged that Advocate did not comply with the best practices and industry standards for securing personal information and failed to timely notify patients of the data breach. However, the complaints did not allege that the personal information was used in any unauthorized manner but instead claimed that the class members faced an increased risk of identity theft and/or fraud as a result of the theft.

The complaints were dismissed with prejudice after the trial courts found that the class members had no standing because they had not suffered an injury-in-fact and that the complaints failed to state a claim upon which relief could be granted. The putative class members appealed and the cases were consolidated.

Standing. The appellate court concluded that the class members did not have standing to sue because their injuries were clearly speculative. In order to have standing, a party must allege an “injury-in-fact to a legally cognizable interest.” The injury must be: “(1) distinct and palpable; (2) fairly traceable to the defendant’s actions; and (3) substantially likely to be prevented or redressed by the grant of the requested relief.”

The class members’ claims that they faced an increased risk of identity theft were based on pure speculation and were conclusory because no identify theft had actually occurred. The court also found that there was no known public disclosure of the information and rejected the class members’ arguments that their harm was implicit and occurred when the medical professional failed to keep patient information private.

The case is No. 2-14-0782 and 2-14-0998.

Attorneys: (Foote, Mielke, Chavez & O'Neil, LLC) for Matias Maglio. (BakerHostetler) for Advocate Health and Hospitals Corp.

Companies: Advocate Health and Hospitals Corp.

MainStory: TopStory EHRNews ConfidentialityNews IllinoisNews

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