P.F. Chang’s Data Breach Class Action Lawsuit Dismissed

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Last week, a federal judge dismissed a class action lawsuit alleging P.F. Chang’s China Bistro Inc. compromised the financial information of its customers by allegedly failing to prevent a data breach that the restaurant chain learned about in June.

Lead plaintiff Daniel Lovell alleged in his class action lawsuit that because P.F. Chang’s did not use standard cyber security practices, he overpaid at a P.F. Chang’s restaurant and had to pay to protect himself from financial fraud, stalking and harassment.

Last week, U.S. District Judge Robert S. Lasnik dismissed the P.F. Chang’s data breach class action lawsuit. Judge Lasnik pointed out in his order that the plaintiff had not established how P.F. Chang’s alleged failure to use industry-standard cyber security measures reduced the value of his meal. The judge also pointed out that the plaintiff had not provided any information indicating he had cause to think he would be harassed or stalked in the future due to the alleged breach.

“Anxiety is compensable only if plaintiff were able to show ‘with reasonable probability that he will actually’ suffer the feared harm,” said the judge in his order. “There is no indication that plaintiff has, as yet, suffered any appreciable harm as a consequence of the alleged negligence,” the judge concluded.

Judge Lasnik also dismissed the class action lawsuit’s allegations of breach of fiduciary duty and strict liability. “Plaintiff alleges that defendant had superior knowledge of its cybersecurity practices and that plaintiff was induced to share his confidential financial information in reliance on that superior knowledge,” Judge Lasnik wrote in his order. “While this argument uses all of the right words, the facts of this case are not similar to those in which a fiduciary relationship was found to exist under Washington law,” he concluded.

The judge further dismissed the class action lawsuit’s claims for breach of implied contract, negligent misrepresentation and violations of the Arizona Deceptive Trade Practices Act. Judge Lasnik pointed out that the plaintiff did not claim that the public should be informed about retailers’ cybersecurity practices or their failure to meet industry-standard cybersecurity practices. “Recent disclosures of cybersecurity problems — such as those involving Target, Sony and/or Home Depot — suggest that, while the breaches make headlines, they do not have much effect on consumer activities,” the judge concluded in his order.

Judge Lasnik indicated the plaintiff will be allowed to amend some of the P.F. Chang’s data breach class action lawsuit claims, but not others. “If plaintiff believes he can, consistent with his Rule 11 obligations, remedy the pleading and legal deficiencies identified above with regards to the negligence, implied contract, negligent misrepresentation, and/or consumer protection law claims, he may file an amended complaint within twenty-one days of the date of this order. Because no set of facts could create a fiduciary relationship or give rise to strict liability in these circumstances, those claims are dismissed with prejudice.”

Lovell is represented by Dan Drachler of Zwerling Schachter & Zwerling LLP and Joel Fleming and Jason Leviton of Block & Leviton LLP.

The P.F. Chang’s Data Breach Class Action Lawsuit is Lovell v. P.F. Chang’s China Bistro Inc., Case No. 2:14-cv-01152, in the U.S. District Court for the Western District of Washington.