Gardiner v. Walmart provided some guidance as to the specificity required to state a claim under the California Consumer Privacy Act (CCPA) and the types of damages that may be recoverable for breaches of California consumer data. On July 10, 2020, Lavarious Gardiner filed a proposed class action against Walmart, alleging that unauthorized individuals accessed his personal information through Walmart’s website. Although Walmart never disclosed the alleged breach or provided any formal notification to consumers (and maintains that no breach occurred), Gardiner claimed that he discovered his personal information on the dark web and was told by hackers that the information came from his Walmart online account. He also claims that by using cybersecurity scan software he discovered many vulnerabilities on Walmart’s website.
Gardiner claimed Walmart violated the CCPA and California’s Unfair Competition Law. In response, Walmart filed a motion to dismiss, which was granted on March 5, 2021 (of note – with leave to amend). While Gardiner has now amended his complaint, the court’s ruling on Walmart’s motion to dismiss addresses some important points related to data breach class actions, including:
- The compliant MUST state when the alleged breach occurred. Gardiner had only alleged that his information was on the dark web, not when the breach actually occurred. The court also stated that for purposes of a CCPA claim, the relevant conduct is the actual data breach resulting from a “failure to implement and maintain reasonable security procedures and practices.” This means that the breach must have occurred on or after January 1, 2020, the effective date of the CCPA.
- The complaint must sufficiently allege disclosure of personal information. Gardiner had only alleged that his credit card number was disclosed, but had not alleged that his 3-digit access code was affected.
- Plaintiff’s damages arising from a data breach MUST not be speculative -this is common across courts that dismiss class action data breach suits. Here, Gardiner had not alleged that he incurred any fraudulent charges or suffered any identity theft or other harm.
The court also dismissed Gardiner’s unfair competition claims that were based on a benefit of the bargain theory.