Judge Dismisses Barnes & Noble PIN Pad Class Action Lawsuit

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Judge Dismisses Barnes & Noble PIN Pad Class Action Lawsuit

By Anne Bucher

An Illinois federal judge last week dismissed a putative class action lawsuit accusing Barnes & Noble Inc. of being responsible for a security breach that affected PIN pads in 63 of its retail stores, finding that the plaintiffs had not shown that they had been harmed by the alleged breach.

According to the September 3 opinion written by U.S. District Judge John W. Darrah, the four plaintiffs failed to prove that their personal information was stolen when the PIN pads were hacked. Therefore, the plaintiffs lacked standing to bring the class action lawsuit, the judge said.

“Plaintiffs seek to establish that their information was stolen simply because plaintiffs made credit and debit card purchases at Barnes & Noble stores affected by the security breach,” Judge Darrah wrote in his decision to dismiss the class action lawsuit. “The inference that their data was stolen, based merely on the security breach, is too tenuous to support a reasonable inference that can be made in plaintiffs’ favor.”

In October 2012, Barnes & Noble announced that some of its stores in California, Connecticut, Florida, Illinois, Massachusetts, New Jersey, New York, Pennsylvania and Rhode Island had been subjected to a security breach. According to the book retailer’s announcement, the company had detected tampering one month earlier with one PIN pad device at each store.

The hackers engaged in what the company called “a sophisticated criminal effort” to obtain the financial information of customers who swiped their credit or debit cards through the PIN pad device when paying for their purchases. Shortly after the announcement, the first of several class action lawsuits was filed. The class action lawsuits were later consolidated.

According to the class action lawsuits, Barnes & Noble failed to utilize adequate data security systems. Further, the plaintiffs alleged that the company violated state consumer fraud laws when it took nearly six weeks notify its customers about the data breach. They also claimed that the hackers used customers’ personal data to make unauthorized purchases. However, Judge Darrah noted that only one of the plaintiffs had actually claimed that she had any fraudulent charges on her credit card.

Judge Darrah found that the plaintiff’s claim of fraudulent charges was the only “cognizable potential injury” that had been alleged in the class action lawsuit. However, the plaintiff was unable to prove that the fraudulent charge was related to the Barnes & Noble security breach. Even if she had been able to prove the relationship between the breach and the fraudulent charge, the plaintiff was not injured because she was able to cancel her credit card and was not required to pay for the unauthorized purchase.

The plaintiffs are represented by Joseph J. Siprut of Siprut PC, Adam J. Levitt of Grant & Eisenhofer PA, Ben Barnow and Sharon Harris of Barnow & Associates PC, Julie D. Miller of Complex Litigation Group LLC and William A Baird of Markun Zusman & Compton LLP.

The consolidated cases are known as In Re: Barnes & Noble Pin Pad Litigation, Case No. 1:12-cv-08617, in the U.S. District Court for the Northern District of Illinois.

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