Stamat v. Grandizio Wilkins Little & Matthews, LLP

CourtDistrict Court, D. Maryland
DecidedAugust 31, 2022
Docket1:22-cv-00747
StatusUnknown

This text of Stamat v. Grandizio Wilkins Little & Matthews, LLP (Stamat v. Grandizio Wilkins Little & Matthews, LLP) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stamat v. Grandizio Wilkins Little & Matthews, LLP, (D. Md. 2022).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

* SPYRO STAMAT, individually and on * behalf of others similarly situated, * * Plaintiff, * * v. * Civil Case No.: SAG-22-00747 * GRANDIZIO WILKINS LITTLE & * MATTHEWS, LLP, * * Defendant. * * * * * * * * * * * * * * *

MEMORANDUM OPINION

Plaintiff Spyro Stamat, on behalf of himself and others similarly situated, filed this class action against Defendant Grandizio Wilkins Little & Matthews, LLP (“Grandizio”) seeking monetary, declaratory, and injunctive relief for the alleged negligent failure to protect Personal Identifying Information (“PII”) from unauthorized access, and for unjust enrichment. ECF 1. Defendant has filed a Motion to Dismiss the Complaint (“Motion”). ECF 16. The issues have been fully briefed, ECF 16-1, 18, 23, and no hearing is necessary. See Local Rule 105.6 (D. Md. 2021). For the following reasons, Defendant’s Motion will be granted. I. BACKGROUND The following facts are derived from the Complaint, ECF 1, and are taken as true for purposes of evaluating Defendant’s Motion. Plaintiff, Mr. Stamat, is a resident of Delaware. ECF 1 ¶ 9. Defendant Grandizio, a Maryland corporation, is an accounting firm that offers tax and business services. Id. ¶¶ 15–16. Grandizio acquires and stores PII of individuals in connection with its services. Id. ¶ 49. 1 A. The Data Breach On June 7, 2021, Grandizio discovered unauthorized access into one of its employee’s email accounts. ECF 1 ¶ 28. Grandizio commissioned an investigation with cybersecurity experts to determine whether any information had been compromised. Id. ¶ 29. The internal investigation

completed on December 17, 2021, but could not conclusively determine whether any data has been or will be misused by those who gained unauthorized access to the email account. Id. ¶¶ 35, 36. The following month, on or around January 14, 2022, Grandizio informed relevant States’ Attorney Generals about the breach of its email account. Id. ¶ 38. At the same time, Grandizio sent written notification to any individuals whose data may have been compromised. Id. ¶ 39. Thereafter, Mr. Stamat received a “Notice of Data Security Incident” from Grandizio, id. ¶ 9, informing him about the email account breach and noting that some of the company’s files “may have been accessed by the unauthorized individual” that “may have contained names, Social Security numbers, Medical Information, Drivers[’] License Information, Financial Account Information, or Payment Card Information,” id. ¶ 31. The letter further informed Mr. Stamat that

his personal information “may have been involved.” Id. The letter offered single bureau credit and identity monitoring services for 12 months, id. ¶ 82, and suggested Mr. Stamat take measures to protect against possible identity theft, id. ¶ 13. Mr. Stamat does not purport to have worked with Grandizio directly; he alleges that Grandizio acquired his PII through a third-party intermediary without his knowledge. Id. ¶ 21 (“Plaintiff and Class Members were persons who provided, or who third-parties provided on their behalf, their PII to Defendant in conjunction with utilizing [Grandizio’s] tax and business services.”); ECF 18 at 23 (“[T]his is a situation where Defendant, without Mr. Stamat’s knowledge, took control of Mr. Stamat’s valuable asset, his PII[.]”). Beyond the information

2 provided in the letter, Mr. Stamat is unaware to what extent his PII has been compromised (if at all), what type of his information may have been compromised, or how the unauthorized email access occurred. ECF 1 ¶ 30. Mr. Stamat believes the likely mechanism was an email phishing attack of one of Grandizio’s employees. Id. ¶ 57. Mr. Stamat “further believes his PII, and that

of Class Members, was subsequently sold on the dark web following the Data Breach, as that is the modus operandi of cybercriminals that commit cyber-attacks of this type.” Id. ¶ 41. B. Plaintiff’s Injury As a result of the potential exposure of his PII, Mr. Stamat spends “a considerable amount of time” monitoring his accounts and credit scores and researching how the unauthorized access of the email account may have impacted him. ECF 1 ¶ 105. Mr. Stamat further “anticipates spending considerable time and money on an ongoing basis” to mitigate and prevent potential misuses of his PII. Id. ¶ 110. Mr. Stamat has “sustained emotional distress,” id. ¶ 105, specifically, he has “suffered lost time, annoyance, interference, and inconvenience as a result of the Data Breach and has anxiety and increased concerns for the loss of his privacy,” id. ¶107.

In total, Mr. Stamat alleges that the failure to protect PII from unauthorized access resulted in the following injuries to himself and other similarly situated individuals: (i) the current and imminent risk of fraud and identity theft[;] (ii) lost or diminished value of PII; (iii) out-of-pocket expenses associated with the prevention, detection, and recovery from identity theft, tax fraud, and/or unauthorized use of their PII; (iv) lost opportunity costs associated with attempting to mitigate the actual consequences of the Data Breach, including but not limited to lost time; and (v) the continued and certainly increased risk to their PII, which: (a) remains unencrypted and available for unauthorized third parties to access and abuse; and (b) may remain backed up in Defendant’s possession and is subject to further unauthorized disclosures so 3 long as Defendant fails to undertake appropriate and adequate measures to protect the PII; (vi) the invasion of privacy; (vii) the compromise, disclosure, theft, and unauthorized use of Plaintiff’s and the Class Members’ PII; and (viii) emotional distress, fear, anxiety, nuisance and annoyance related to the theft and compromise of their PII. Id. ¶ 6. C. The Present Case Mr. Stamat, individually and on behalf of those similarly situated, filed the Class Action Complaint in this Court on March 28, 2022. He purports to represent “[a]ll persons [Grandizio] identified as being among those individuals impacted by the Data Breach, including all who were sent a notice of the Data Breach.” Id. ¶ 111. Mr. Stamat, and those he represents, allege that Grandizio negligently failed to reasonably secure their PII (Counts I, III) and became unjustly enriched through use of the PII without implementing adequate safeguards (Count II). ECF 1. Grandizio has now filed a motion to dismiss the Complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). ECF 16. Grandizio’s Motion is based upon two grounds. First, Grandizio argues that the Court should dismiss Mr. Stamat’s Complaint because he has failed to allege an injury-in-fact and lacks standing. Second, Grandizio asserts that the Court should dismiss Mr. Stamat’s claims for failure to state a claim upon which relief can be granted. Grandizio’s Rule 12(b)(1) Motion will be granted for lack of standing. As a result, the Court will find moot and not address Grandizio’s alternative arguments to dismiss under Rule 12(b)(6). II. LEGAL STANDARDS A. Rule 12(b)(1) Standard When a Rule 12(b)(1) motion contests the factual basis for subject matter jurisdiction, the burden of proving subject matter jurisdiction rests with the plaintiff. Richmond, Fredericksburg 4 & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). A challenge to jurisdiction may be either facial, i.e., the complaint fails to allege facts upon which subject matter jurisdiction can be based, or factual, i.e., jurisdictional allegations of the complaint are not true. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). See also Kerns v.

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Bluebook (online)
Stamat v. Grandizio Wilkins Little & Matthews, LLP, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stamat-v-grandizio-wilkins-little-matthews-llp-mdd-2022.