Empirical Analysis of Data Breach Litigation

31 Pages Posted: 18 Jan 2014

See all articles by Sasha Romanosky

Sasha Romanosky

RAND Corporation; Carnegie Mellon University - Heinz College of Information Systems and Public Policy

David A. Hoffman

University of Pennsylvania Law School; Cultural Cognition Project at Yale Law School

Alessandro Acquisti

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Multiple version iconThere are 2 versions of this paper

Date Written: March 2014

Abstract

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 more than 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 percent 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 insight into the debate over privacy litigation versus privacy regulation.

Suggested Citation

Romanosky, Sasha and Hoffman, David A. and Acquisti, Alessandro, Empirical Analysis of Data Breach Litigation (March 2014). Journal of Empirical Legal Studies, Vol. 11, Issue 1, pp. 74-104, 2014. Available at SSRN: https://ssrn.com/abstract=2381037 or http://dx.doi.org/10.1111/jels.12035

Sasha Romanosky (Contact Author)

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Carnegie Mellon University - Heinz College of Information Systems and Public Policy ( email )

Pittsburgh, PA 15213-3890
United States

David A. Hoffman

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

Cultural Cognition Project at Yale Law School

127 Wall St
New Haven, CT 06520
United States

Alessandro Acquisti

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
412-268-9853 (Phone)
412-268-5339 (Fax)

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