McCreary v. Filters Fast, LLC

CourtDistrict Court, W.D. North Carolina
DecidedJuly 19, 2021
Docket3:20-cv-00595
StatusUnknown

This text of McCreary v. Filters Fast, LLC (McCreary v. Filters Fast, LLC) is published on Counsel Stack Legal Research, covering District Court, W.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCreary v. Filters Fast, LLC, (W.D.N.C. 2021).

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION DOCKET NO. 3:20-cv-595-FDW-DCK JENNIFER McCREARY, BETTY OWEN, ) and LYDIA POSTOLOWSKI, on behalf of ) themselves and all others similarly situated, ) ) Plaintiffs, ) ) ORDER vs. ) ) FILTERS FAST LLC, ) ) Defendant. ) )

THIS MATTER is before the Court on Defendant Filters Fast LLC’s Motions to Dismiss. One motion was filed prior to the Amended Complaint (Doc. No. 10), and upon filing of the Amended Complaint, Defendant renewed their motions separately seeking dismissal pursuant to Federal Rule of Civil Procedure 12(b)(1), (Doc. No. 15), and 12(b)(6), (Doc. No. 17). The motions have been fully briefed by the parties and are now ripe for review. For the reasons stated herein, the court DENIES AS MOOT the Original Motion to Dismiss and DENIES the renewed Motions to Dismiss (Doc. Nos. 15, 17). I. BACKGROUND According to the Complaint, Defendant is an online retailer of home filtration products based out of North Carolina. (Doc. No. 12, p. 10). Plaintiffs purchased merchandise from Defendant’s website between August 2019 and July 2020. (Id.). Subsequently, each Plaintiff received a letter from Defendant dated August 18, 2020, “Notice of Data Breach,” which stated: In late February 2020, we were informed of a possible data security incident affecting our website. We immediately began investigating the potential issue. Our investigation included hiring an outside, expert forensics firm to analyze our 1 systems and determine if there was a breach of our security. On July 20, 2020, that investigation revealed that attackers had succeeded in adding malicious code to our website on July 15, 2019, which allowed unauthorized individuals to capture certain information during the checkout process. We removed that malicious code on July 10, 2020, during an unrelated update of our website ending the unauthorized access to our website.

(Doc. No. 12 – 2, p. 1). Since receipt of this notice, Plaintiffs have allegedly experienced fraud and security issues surrounding the payment cards and personal information used to purchase merchandise on Defendant’s site. (Doc. No. 12, p. 6). Plaintiffs allege the sharing and use of their personal and financial information. For example, Plaintiff Postolowski alleges that an unauthorized charge was attempted on her card August 2020. (Id. p. 8). In addition to injury in the form of fraudulent charges and compromise of their personal information, Plaintiffs allege the following injuries: (a) unauthorized charges on their payment card accounts; (b) theft of their personal and financial information; (c) costs associated with the detection and prevention of identity theft and unauthorized use of their financial accounts; (d) loss of use of and access to their account funds and costs associated with inability to obtain money from their accounts or being limited in the amount of money they were permitted to obtain from their accounts, including missed payments on bills and loans, late charges and fees, and adverse effects on their credit including decreased credit scores and adverse credit notations; (e) costs associated with time spent and the loss of productivity from taking time to address and attempting to ameliorate, mitigate, and deal with the actual and future consequences of the data breach, including finding fraudulent charges, cancelling and reissuing cards, purchasing credit monitoring and identity theft protection services, imposition of withdrawal and purchase limits on compromised accounts, and the stress, nuisance and annoyance of dealing with all issues resulting from the data breach; (f) the imminent and certainly impending injury flowing from potential fraud and identity theft posed by their personal information and PCD being placed in the hands of criminals and already misused via the sale of Plaintiffs’ and Class Members’ information on the Internet black market; (g) damages to and diminution in value of their personal and financial information entrusted to Filters Fast for the sole purpose of making purchases from Filters Fast and with the mutual understanding that Filters Fast would safeguard Plaintiffs’ and Class Members’ data against theft and not allow access to and misuse of their information by others; (h) money paid to Filters Fast during the period of the data breach in that Plaintiffs and Class Members would not 2 have purchased from Filters Fast had Defendant disclosed that it lacked adequate systems and procedures to reasonably safeguard customers’ personal information and PCD and had Filters Fast provided timely and accurate notice of the data breach; (i) continued risk to their personal information and PCD, which remains in the possession of Filters Fast.

(Id. pp. 2-4). Plaintiffs filed the Complaint against Defendant Filters Fast, LLC, on behalf of themselves and all others similarly situated, for Defendant’s alleged: (a) refusal to take adequate and reasonable measures to ensure its data systems were protected; (b) refusal to take available steps to prevent the breach from happening; (c) failure to disclose to its customers the material fact that it did not have adequate computer systems and security practices to safeguard customers’ personal and financial information; and (d) failure to provide timely and adequate notice of the data breach. (Id. p. 2). Plaintiffs now seek to hold Defendant liable for: (1) violation of North Carolina Unfair and Deceptive Trade Practices Act; (2) negligence; (3) negligence per se; (4) breach of implied contract; (5) unjust enrichment; (6) declaratory relief; (7) violation of California’s Unfair Competition Law; (8) violation of the California Consumer Privacy Act; and (9) violations of the Florida Unfair and Deceptive Trade Practices Act. (Id.). Defendant has moved to dismiss all counts, both for lack of standing and failure to state a claim. (Doc. Nos. 15, 16). Defendant relies on Rules 12(b)(1) and 12(b)(6) to support both Motions to Dismiss. II. STANDARD OF REVIEW A. Rule 12(b)(1) Federal Rule of Civil Procedure 12(b)(1) provides for dismissal when the court lacks subject matter jurisdiction and may be raised at any time, by any party. Mansfield, C. & L.M. Ry. 3 Co. v. Swan, 111 U.S. 379, 382 (1884). To survive a 12(b)(1) motion to dismiss, the burden is on the plaintiff to establish the existence of subject matter jurisdiction. In re Marriott Int'l, Inc., Customer Data Sec. Breach Litig., 440 F. Supp. 3d 447, 455 (D. Md. 2020). A 12(b)(1) challenge may be raised in one of two ways: a facial challenge or a factual challenge. Id. In a facial challenge, the factual allegations of a complaint are “taken as true,” however, the moving party asserts that these allegations are “insufficient to establish subject matter jurisdiction.” Id. In a factual challenge, the moving party asserts that the “jurisdictional allegations of the complaint are not true,” and the court “is entitled to decide disputed issues of fact with

respect to subject matter jurisdiction.” Id. (internal quotations omitted). Here, Defendant asserts a facial challenge against Plaintiffs’ standing. Therefore, the Court must “accept as true all material allegations of the complaint and construe the complaint in favor of the complaining party.” Deal v. Mercer Cty. Bd. Of Educ., 911 F.3d 183, 187 (4th Cir. 2018). B. Rule 12(b)(6) Federal Rule of Civil Procedure

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Bluebook (online)
McCreary v. Filters Fast, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccreary-v-filters-fast-llc-ncwd-2021.