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Lawsuit targeting RockYou data breach gets green light

Personally identifiable info has inherent value

Website security in corporate America

A federal judge has declined to dismiss a lawsuit filed against social-media application developer RockYou for exposing the personally identifiable information of 32 million of its users, which the site stored unencrypted when it suffered a major security breach 16 months ago.

Judge Phyllis Hamilton of the US District Court in the Northern District of California dismissed five causes of action brought by user Alan Claridge, but allowed four others to survive. RockYou argued that the suit should be thrown out in its entirety because Claridge didn't suffer any injuries as a result of the data loss, which exposed the email address and password he supplied when establishing an account with the apps maker.

"The court concludes that at the present pleading state, plaintiff has sufficiently alleged a general basis for harm by alleging that the breach of his [personally Identifiable Information] has caused him to lose some ascertainable but unidentified 'value' and/or property right inherent in the PII," Hamilton wrote. "As such, the court declines to dismiss plaintiff's breach claims on grounds that plaintiff has failed to allege damages harm as a matter of law."

The case was filed after hackers mounted SQL injection attacks in December 2009 that exploited a gaping hole in RockYou's website. The breach exposed passwords and email addresses, which RockYou stored in plaintext, for more than 32 million users. Claridge sued RockYou asserting a variety of claims, including negligence, breach of contract, and violations of the federal Stored Communications Act and California's Unfair Competition Law.

The finding that the loss of PII is sufficient grounds for a lawsuit is in stark contrast to rulings in other cases that have held that the exposure of social security numbers and other sensitive data gives rise to valid legal claims only when it results in actual damage to its owner, such as identity theft.

The 16-page ruling is available here. ®

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