Neiman Marcus will be heading back to court over its 2013 data breach. This comes despite the fact that the case against Neiman’s was dismissed last year — a decision that has been officially reversed by an appeals courts.
The breach itself left card data for around 350,000 Neiman Marcus customers exposed to criminals — about 9,200 of which were later used in a fraudulent transaction of some kind.
In response, several customers filed a class-action lawsuit against the company seeking at least $5 million in damages.
Last September, a court found that because there was no actual injury to the parties involved — because they had been reimbursed by their issuers for the fraudulent transactions — they were not owed. The class of customers appealed on the grounds that time and money have value and that they were reimbursed for neither despite the fact that they expended both in dealing with the breach issue. They also noted that the theft makes them potentially vulnerable to future fraud.
The Seventh U.S. Circuit Court of Appeals in Chicago bought that argument and said Monday (July 20) that the case can proceed because there is a “substantial risk” of harm to consumers.
“For years, virtually all courts have said the mere risk of identity theft is not enough. You have to have an actual unreimbursed theft,” said Donna Wilson, a partner at Manatt, Phelps & Phillips LLP who specializes in privacy and data security.
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