Empirical Analysis of Data Breach Litigation
Forthcoming in the Journal of Empirical Legal Studies
30 Pages Posted: 16 Jan 2012 Last revised: 1 Feb 2014
Date Written: April 6, 2013
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.
Keywords: data breach, identity theft, privacy litigation, docket analysis, docketology
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