A panel of the Seventh Circuit Court of Appeals (Wood, C.J., Kanne, J. and Tinder, J.) has reversed the dismissal of a data security breach class action lawsuit against luxury department store Neiman Marcus.

This lawsuit stemmed from a hacking incident in which “350,000 cards were potentially exposed; and 9,200 of those 350,000 cards were known to have been used fraudulently.” The company provided notices to consumers and a year of free credit monitoring. A number of class action lawsuits were brought by consumers, consolidated into the lawsuit Hilary Remijas v. Neiman Marcus Group, LLC. “The plaintiffs point to several kinds of injury they have suffered: 1) lost time and money resolving the fraudulent charges, 2) lost time and money protecting themselves against future identity theft, 3) the financial loss of buying items at Neiman Marcus that they would not have purchased had they known of the store’s careless approach to cybersecurity, and 4) lost control over the value of their personal information.”

The trial court dismissed the case for lack of Article III standing under Rule 12(b)(1) and declined to rule on defendant’s Rule 12(b)(6) argument. The Seventh Circuit found that at least some of plaintiffs’ alleged injuries passed Constitutional muster, even under the standards set forth in cases like Clapper v. Amnesty International USA.
Continue Reading Seventh Circuit Revives Data Security Breach Class Action Against Neiman Marcus: Finds Article III Standing In Class Expenses “Resolving Fraudulent Charges and Protecting…Against Future Identity Theft.”

As Companies Approach the January 1, 2012 PCI DSS 2.0 Compliance Deadline, a New Information Supplement Provides Guidance on the Scoping, Controls Necessary and Testing Procedures for Virtual Environments.

This post was also written by Chris Cwalina, Dan Herbst and Amy Mushahwar.

On Tuesday, June 14, the PCI Security Standards Council, the body that administers the Payment Card Industry Data Security Standard (PCI-DSS), released a comprehensive set of guidelines for PCI compliance in virtual card holder data environments. The Council’s 39-page guidance document (available at https://www.pcisecuritystandards.org/security_standards/documents.php) describes in detail how each of the 12 PCI security control objectives within logical environments should be applied in a virtual setting. The document – which was over two years in the making – provides clearer guidance regarding how organizations can deploy virtualized environments in a secure fashion.

As background, before virtualization technologies, the standard computing model was one computer to one operating system with that computer’s associated applications and resources. Virtualization technologies enable IT teams to combine or divide computing resources to unify many computing systems into one operating environment or to partition one server into several virtual machines. Virtualization technologies undergird important applications over a wide range of areas such as, virtual test environments, server consolidation, multiple operating system support, system migration, cloud computing and so on. Given the variety of virtualization flavors and applications, the Council in its guidance recognized there is “no one-size-fits-all method or solution to configure virtualized environments[.]”

Continue Reading Is the PCI Security Standards Counsel Preparing for Cloudy Weather?