Ill. court dismisses claims of potential loss from Advocate data breach

In the first substantive ruling in last year's theft of four laptop computers at Advocate Medical Group in which 4 million patients' data were stolen, an Illinois court has ruled that plaintiffs cannot claim injuries based merely on potential losses.

While Downers Grove, Ill.-based Advocate is still unaware of the whereabouts of the laptops and their respective hard drives, which were stolen from their offices on July 15, 2013, there has been no evidence of identity theft as a result, according to Tuesday's ruling by a Lake County Circuit Court judge in Waukegan, Ill., in Veronica Vides, et al. vs. Advocate Health & Hospitals Corp./d/b/a/ Advocate Medical Group.

Advocate has said the computers were stolen from an administrative office in Park Ridge, Ill., and that the computers' data was not encrypted.

Plaintiffs filed a putative class action lawsuit on charges including negligence and intentional infliction of emotional distress.

To claim injury, whether actual or threatened, the plaintiffs must establish it is “distinct and palpable” and “fairly traceable” to the defendant's actions and that the requested relief would substantially redress the loss, Circuit Judge Mitchell L. Hoffman ruled.

“Plaintiffs argue injury in the form of increased risk of identity theft and/or fraud due to the exposure of their personal information,” Hoffman ruled. However, “the harm that plaintiffs fear is contingent on a chain of attenuated hypothetical events and actions by third parties independent of the defendant,” the judge said in citing the U.S. Supreme Court's 2012 ruling in James R. Clapper Jr. et al. v. Amnesty International USA et al., which concerns the issue of federal surveillance.

“Although plaintiffs do not need to show that they are 'literally certain' they will be victims of identity theft and/or fraud, they have not alleged facts that would plausibly establish an 'imminent' or 'certainly impending' risk that they will be victimized. Under Clapper, the mere fact that the risk has been increased does not suffice to establish standing,” Hoffman ruled in dismissing the suit.

Other lawsuits in the laptop theft have also been filed in other Illinois state courts and in U.S. District Court in Chicago.

“This is the first substantive ruling in any of these cases,” said defense attorney Daniel R. Warren, a partner at law firm Baker & Hostetler in Cleveland who was one of the attorneys who defended the company. “We are appreciative of the court's careful and thorough analysis in deciding to dismiss the case.”

The plaintiff attorney in this case could not be reached.

However, Jay Edelson, managing partner at Edelson P.C. in Chicago, said he is the plaintiff attorney in connection with 12 cases related to the incident that have been consolidated in Cook County Circuit Court in Chicago.

The case that was dismissed “doesn't allege the core violations that we are alleging,” Edelson said. “We are proceeding with discovery, and the court will be ruling on Advocate's motion to dismiss shortly.”

Charges in that litigation, Alex Lozada v. Advocate Health and Hospitals Corp. et al., include breach of contract, breach of implied contract, unjust enrichment and breach of fiduciary duty.

"Court dismisses claims of potential loss from stolen medical laptops" originally appeared on the website of Crain's Business Insurance.