Court Reopens 2012 Zappos Data Breach Litigation

A class-action lawsuit against Zappos.com was reopened Thursday when the 9th U.S. Circuit Court of Appeals voted to overturn a previous lower-court dismissal.

The case, “Theresa Stevens, et al., v. Zappos.com Inc.,” stems from a 2012 data breach in which hackers accessed the Zappos servers and allegedly stole the names, addresses, passwords and credit and debit card information of more than 24 million of the site’s customers.

Zappos responded quickly to the incident at the time, notifying customers via email of the breach and recommending that they change their passwords on the e-commerce site.

However, numerous customer filed punitive actions against the company following the news, claiming that Zappos did not do enough to protect its customers’ privacy and that they were at risk of identity fraud.

The U.S. District Court in Reno, Nev., chose to dismiss the claims on the grounds that not all of the plaintiffs had Article III standing, which requires (a) proof of actual injury, (b) that the injury be traceable and (c) that the injury can be redressed by a favorable decision.

On March 8, the federal appeals court chose to overturn that decision, allowing all the plaintiffs to pursue their litigation against Zappos.

Judge Elaine E. Bucklo wrote in a summary opinion, “The panel held that plaintiffs sufficiently alleged an injury in fact … based on a substantial risk that the Zappos hackers will commit identity fraud or identity theft. The panel assessed plaintiffs’ standing as of the time the complaints were filed, not as of the present. The panel further held that plaintiffs sufficiently alleged that the risk of future harm they faced was ‘fairly traceable’ to the conduct being challenged; and the risk from the injury of identity theft was also redressable by relief that could be obtained through this litigation.”

Zappos.com and the representing attorneys did not immediately respond to requests for comment.

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