As Cyberattacks Rise, U.S. Business Readiness Falls

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Two recent reports reflect that cyberattacks and resulting data breaches continue to threaten U.S. companies and public entities. The Hiscox Cyber Readiness Report (April 23, 2019), compiled from a survey of more than 1,000 U.S. cybersecurity professionals at private companies and public-sector entities with 50 to 1,000+ employees, found that 53% of firms reported at least one cyberattack – up from 38% in 2018. Interestingly, only 11% of U.S. firms qualified as experts based on their cybersecurity preparedness and responses – down from 26% in last year’s survey; 16% of firms ranked as intermediate, and the remaining 73% ranked as novice. These statistics reflect a continuing need for public- and private-sector emphasis on cybersecurity preparedness and incident response.

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Supreme Court Gives Companies Another Tool To Fend Off Data Breach Class Actions

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In the wake of data breaches, companies may find themselves targets of class actions by customers or employees whose personal information was compromised in the breach. The exposure is considerable, with an estimated 765 million people impacted by data breaches between April and June of 2018. As we previously reported, some courts have allowed consumer and employee data breach cases to proceed despite threshold challenges – leading to multi-million-dollar settlements. And in Dittman, Pennsylvania’s Supreme Court recently held that an employer owed an affirmative duty to exercise reasonable care to protect employees’ personal nonpublic data from data breaches.

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U.S. Supreme Court Declines to Hear Zappos Data Breach Case

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The Supreme Court recently declined to review the Ninth Circuit’s decision in Zappos.com, Inc. v. Stevens, a class action suit resulting from a 2012 data breach of the online retailer. As a result, there remains a split in the courts as to whether a breach of data confers Article III standing on potential plaintiffs, even if no actual injury occurred.

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