Empirical Analysis of Data Breach Litigation
RAND Corporation; Carnegie Mellon University - Heinz College of Information Systems and Public Policy
David A. Hoffman
Temple University - James E. Beasley School of Law; Cultural Cognition Project at Yale Law School; University of Pennsylvania Law School
Carnegie Mellon University - Heinz College
April 6, 2013
Forthcoming in the Journal of Empirical Legal Studies
Temple University Legal Studies Research Paper No. 2012-30
In recent years, many lawsuits have been filed by individuals seeking legal redress for harms caused by the loss or theft of their personal information. However, very little is known about the drivers, mechanics, and outcomes of those lawsuits, making it difficult to assess the effectiveness of litigation at balancing organizations’ usage of personal data with individual privacy rights. Using a unique and manually-collected database, we analyze court dockets for over 230 federal data breach lawsuits from 2000 to 2010. We investigate two questions: Which data breaches are being litigated, and which data breach lawsuits are settling. Our results suggest that the odds of a firm being sued are 3.5 times greater when individuals suffer financial harm, but 6 times lower when the firm provides free credit monitoring. Moreover, defendants settle 30% more often when plaintiffs allege financial loss, or when faced with a certified class action suit. By providing the first comprehensive empirical analysis of data breach litigation, our findings offer insights in the debate over privacy litigation versus privacy regulation.
Number of Pages in PDF File: 31
Keywords: data breach, identity theft, privacy litigation, docket analysis, docketology
Date posted: January 16, 2012 ; Last revised: February 1, 2014
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