Enslin v. Coca-Cola Co.

United States District Court · Contracts

Contractsbreach of express contractbreach of implied contractunjust enrichmenteconomic loss doctrinestandingdata breachpersonal identification information

Facts

Plaintiff had provided his employer with personal identifying information, including his Social Security number, address, bank account information, credit card numbers, driver's license information, and motor vehicle records, and alleged the information was stored on unencrypted laptops. Over several years, fifty-five laptops containing the personal information of plaintiff and others were stolen, though later recovered, and plaintiff was notified in February 2014 that his information may have been on them. After that notice, unknown identity thieves allegedly made fraudulent purchases, used plaintiff's checking account to pay bills, attempted address changes on his accounts, opened or attempted to open credit accounts in his name, and caused him to spend time and money addressing the fraud. Plaintiff alleged the defendants had promised, as part of his employment arrangement, to securely retain his personal information.

Issue

Whether plaintiff alleged Article III standing based on the theft and misuse of his personal information, and whether his complaint plausibly stated claims under Pennsylvania contract and restitution law despite dismissal challenges to all asserted causes of action. More specifically, the court considered whether actual post-breach misuse of plaintiff's information was enough for standing and whether express contract, implied contract, and unjust enrichment claims could survive while tort and related claims could not.

Rule

At the pleading stage, Article III standing exists where a plaintiff alleges concrete, present injury fairly traceable to a defendant's conduct, and in a data-breach case actual misuse of personal information causing unreimbursed fraudulent charges and remedial expenditures is sufficient, unlike mere risk of future harm. Under Pennsylvania law, breach of express contract requires a contract, breach, and damages; implied contract uses the same elements but may arise from conduct. Negligence and negligent misrepresentation claims seeking solely economic loss are barred by the economic loss doctrine absent a special relationship, breach of the covenant of good faith and fair dealing is not a separate cause of action from breach of contract, fraud must satisfy Rule 9(b) particularity, bailment requires delivery and nonreturn of personalty, and restitution may be available for a deliberate, profitable, opportunistic breach where ordinary contract damages may be inadequate.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nina Patel worked for a beverage distributor in Pittsburgh and was required to provide her Social Security number, bank details, and driver's license information as part of onboarding. After the company disclosed that an unencrypted payroll laptop had been stolen, Nina later found two unauthorized withdrawals from her checking account, paid a $25 fee to close the account, and spent hours correcting attempted address changes on a store credit card.

If Nina sues in federal court, which argument best supports standing at the pleading stage?

Explanation. The majority held that standing exists where the plaintiff alleges actual misuse of personal information causing concrete financial harm and remedial expenditures. That is different from a case alleging only risk of future misuse. Unauthorized withdrawals, account-closing fees, and time and money spent responding are sufficient at the pleading stage, and the injury may be fairly traceable to the defendant's alleged failure to safeguard the information. (Derived from Enslin v. Coca-Cola Co. (n.d.).)