Nationwide Insurance Hack Class Action Lawsuits Dismissed

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An Ohio federal judge dismissed two class action lawsuits brought against Nationwide Mutual Insurance Co. on Feb 10. The class action lawsuits were filed after a cyber attack in October 2012 exposed the private information of a million consumers who had requested insurance quotes from Nationwide. The judge found that the plaintiffs had failed to show that they had been damaged by the breach.

Two plaintiffs, Mohammad S. Galaria of Minnesota and Anthony Hancox of Kansas, filed the Nationwide data breach class action lawsuits early last year. The complaints alleged that Galaria and Handcox, while they were purchasing or attempting to purchase insurance products from Nationwide, had provided personally identifiable information and that information had been stolen on October 23, 2012, by cyber thieves.

Nationwide had sent a letter informing the men and others affected by the Nationwide data breach, suggesting steps to safeguard their information, including closely monitoring their credit reports and bank statements. Nationwide also offered one year of free credit monitoring and identity theft protection through Equifax. Neither Galaria or Hancox claimed that their identify had been stolen as a result of the theft.

The class action lawsuits were consolidated and moved to Ohio where the defendant, Nationwide, has its principal place of business. Nationwide argued that Galaria and Hancox’s claimed injuries were speculative and the court agreed. The judge pointed out that “an increased risk of identity theft, identity fraud, medical fraud, or phishing is not itself and injury-in-fact because [plaintiffs] did not allege – or offer facts to make plausible – and allegation that such harm is ‘certainly impending.'”

Additionally, the judge noted that the harm, in this case, the probability that Galaria and Hancox will because victims of theft or fraud, was not impending, “[plaintiffs] state that consumers who receive a data breach notification had a fraud incidence rate of 19% in 2011. An injury can hardly be said to be “certainly impending” if there is less than a 20% chance of it occurring.

Moreover, [plaintiffs] that Defendant offered a free year of credit monitoring and identity theft protection further supports the Court’s conclusion that risk of injury is not certainly impending.” The judge disagreed with Galaria and Hancox’s argument that they should receive damages for costs they incurred to mitigate the increased risk of identity theft and fraud for the same reasons.

The judge agreed with Galaria and Hancox, that their loss of privacy was not speculative; however, the judge determined that the loss of privacy alone was not enough to demonstrate that the men had suffered and injury at the hands of Nationwide. The judge similarly dismissed claims that Nationwide devalued Galaria and Hancox’s personally identifiable information, and common law invasion of privacy claim.

The plaintiffs are represented by Mitchell Burgess of Burgess & Lamb PC, Ralph K. Phalen Law PC, Ben Barnow of Barnow & Associates PC, Richard L. Coffman of The Coffman Law Firm, and Cory Fein of Caddell & Chapman PC.

The Nationwide Insurance Data Theft Class Action Lawsuit cases are Anthony Hancox, et al. v. Nationwide Mutual Insurance Co., Case No. 13-cv-02047, and Mohommad Galaria v. Nationwide Mutual Insurance Co., Case No. 2:13-cv-00118 both in U.S. District Court for the District of Ohio.