Troy v. American Bar Association

CourtDistrict Court, E.D. New York
DecidedApril 30, 2024
Docket1:23-cv-03053
StatusUnknown

This text of Troy v. American Bar Association (Troy v. American Bar Association) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Troy v. American Bar Association, (E.D.N.Y. 2024).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK TIFFANY TROY and ERIC JOHN MATA, MEMORANDUM & ORDER on behalf of themselves and on behalf of others °3-CV-03053 (NGG similarly situated, ( ) (VMS) Plaintiffs, -against- AMERICAN BAR ASSOCIATION, Defendant.

NICHOLAS G. GARAUFIS, United States District Judge. Plaintiffs Tiffany Troy and Eric John Mata, (collectively, “Plain- tiffs”) bring a putative class action against Defendant American Bar Association (“ABA” or “Defendant”) arising from a March 202.3 data security breach (the “Breach”). Plaintiffs seek relief on behalf of themselves and several proposed classes of sirnilarly sit- uated persons with ABA accounts, asserting claims for Gi) breach of implied contract; (ii) violation of various state consumer pro- tection statutes; (ii) deceptive business practices under N.Y. G.B.L. § 349; and (iii) deceptive business practices under TX. Bus. & Com. § 17.46. Defendant has moved to dismiss Plaintiffs’ Amended Complaint (Am. Compl. (Dkt. 15)), in its entirety for failure to state a claim pursuant to Federal Rule of Civil Proce- dure 12(b)(6). (See Not. of Mot. (Dkt. 17); Mem. of Law in Support of Def’s. Mot. to Dismiss (“Defs. Mot.”) (Dkt. 19).) For the following reasons, the Defendant’s motion is GRANTED and Plaintiffs’ claims are dismissed in their entirety.

I. BACKGROUND! Plaintiff Troy is a citizen of New York and has been a registered member of ABA since August 2018. (Am. Compl. { 12.) Plaintiff Mata is a citizen of Texas and has been a registered member of ABA since 2022. Ud. 7 13.) In addition to being members with the ABA, both Plaintiffs made purchases from ABA during the relevant time period. (Id. {| 12-13.) Defendant ABA is a nation- wide voluntary attorney bar association. Ud. { 14.) ABA requires customers to disclose personal identifying information and pro- cesses customer credit and debit card payments. (d.) On March 6, 2023, an unidentified “hacker” acquired unauthor- ized access to the ABA network. Ud. { 16.) Plaintiffs allege Defendant took no action to remove the hacker’s access until on or about March 17, 2023. Ud. 17.) Plaintiffs further allege that the Breach was a result of Defendant’s failure to comply with rea- sonable security standards and that ABA’s IT department was poorly managed, only exacerbating its purported inadequate se- curity practices. Ud. □□ 18-19.) Following the incident, ABA emailed its affected members, including Plaintiffs, with a notice of the data breach. (id. { 32.) Plaintiffs estimate that approxi- mately 1.5 million ABA members were affected by the Breach. Ud. 4 15.) As a result of the hacker obtaining ABA members’ personal infor- mation, Plaintiffs assert that they had to expend costs associated with identity theft and increased risk of identity theft. Gd. { 34.) In support, they an uptick in spam text messages and other fraud- ulent activity. For example, Plaintiff Troy received spam. text

1 The following facts are taken from the Amended Complaint and, for the purposes of this motion to dismiss, are assumed to be true. See Ark. Pub. Emps. Ret. Sys. v. Bristol-Myers Squibb Co., 28 F.4th 343, 349 (2d Cir. 2022).

messages, including but not exclusively on, June 8, 2023, June 20, 2023, June 26, 2023, July 6, 2023, July 12, 2023, August 16,. 2023, August 23, 2023, and August 24, 2023. Ud. 435.) Prior to the leak, Plaintiff Troy received about one to two spam text mes- sages a year. (Id.) Moreover, many of the text messages were in Chinese or referred Plaintiff Troy’s Chinese-speaking ability, in- dicating a leak of personal language information. Ud.) On July 31, 2023, an unknown third party attempted to fraudulently use Plaintiff Troy's Amazon Business Rewards Visa credit card from Chase Bank to make a purchase of $1,087.65 from Best Buy with- out her authorization. (Id. 36.) Plaintiff Troy replaced her credit card the same day. (id.) On August 1, 2023, Plaintiff Troy pur- chased Norton LifeLock identity theft protection for $97.98. (Ud. " 41.) Plaintiff Mata also received spam emails and telephone calls, in- cluding two spam calls on July 13, 2023 and July 16, 2023 that were marked as “Spam Risk” and “Threat: Severe” by AT&I’s se- curity application, and two spam emails on July 11, 2023 that were fraudulently advertising offers from Dick’s Sporting Goods and SAC Rock Enroll. (id. 742.) Plaintiff Mata asserts he received another spam email on July 21, 2023, as well as others that he has since deleted. (id.) As a result of ABA’s conduct, Plaintiffs were denied privacy pro- tections that they paid for and incurred actual monetary damages in overpaying for ABA services, monitoring their financial and bank accounts, including through identity theft protection pur- chases, and obtaining replacement credit and debit cards. Ud. 94 31, 34, 36, 41, 44.) Plaintiffs assert claims for breach of implied contract Cid. {| 59- 65), violations of N.Y. G.B.L. § 349 and TX Bus. & Com. § 17.46

(id. *{ 81-106), and violations of consumer fraud acts of 31 other states and the District of Columbia.? Ud. 66-80.) Plaintiffs bring the instant suit on behalf of themselves, as well as two proposed classes. The first proposed class is for the breach of contract claim and consists of persons residing in the United States who have registered an account with ABA (the “National Class”). (id. 45.) The second proposed class is for the state con- sumer fraud statutes and consists of persons (a) residing in one of the 32 states (or the District of Columbia) with consumer fraud statutes and (b) who have registered an account with ABA (the “Consumer Fraud Multistate Class”). (Id. 4 46.) Alternative to the latter multistate class, Plaintiffs also propose a state-sub class for all persons residing in New York who registered an account with ABA (the “New York State Class”) and a state-sub class for all persons residing in Texas who registered an account with ABA (the “Texas State Class”), (Id. 14 47-48.) On November 21, 2023, Defendant moved to dismiss all counts in the Amended Complaint. (Defs. Mot. at 2.) Ii. LEGAL STANDARD To survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).3 “A claim has facia! plausibility when the

2 ‘The court notes for clarification that Plaintiffs’ proposed multistate class, as discussed below, includes consumer fraud statutes from the District of Columbia and 32 states, including New York. Gd. { 46 n.11,) Because Plaintiffs bring a separate, alternative count under New York’s consumer fraud act (N.Y. G.B.L. § 349), the court does not include New York when referencing the other state consumer fraud statutes here. 3 When quoting cases, unless otherwise noted, all citations and internal quotation marks are omitted, and all alterations are adopted.

plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the miscon- duct alleged.” id. A complaint must contain facts that do more than present a “sheer possibility that a defendant has acted un- lawfully.” Id. In deciding a motion to dismiss, the court will accept all factual allegations in the complaint as true and draw “all reasonable inferences in the plaintiffs favor.” See Fink v. Time Warner Cable, 714 F.3d 739, 740-41 (2d Cir. 2013).

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