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Friday, December 8, 2023 | Back issues
Courthouse News Service Courthouse News Service

Starbucks May Be Liable for Workers’ ID Theft Risk

(CN) - Starbucks employees whose personal information was stolen with a company laptop can sue the coffee kahuna for negligence, the 9th Circuit ruled Tuesday.

About 97,000 current and former Starbucks employees were exposed to identity theft in 2008 when an unknown thief stole a laptop that contained their unencrypted names, addresses and social security numbers. Starbucks informed its employees of the theft and provided free credit-watch services to the affected employees.

Lead plaintiffs Laura Krottner, Ishaya Shamasa and Joseph Lalli filed two class actions against the Seattle-based company in Washington for negligence and breach of contract.

They alleged that they'd been forced to be "extra vigilant" in watching their accounts and had to spend a lot of their personal time doing so.

Shamasa claimed that someone had attempted to use his social security number to open a bank account, but the bank caught the transaction in time and he didn't lose any money, according to the ruling. Lalli reported having "generalized anxiety and stress regarding the situation," according to the ruling.

None of the plaintiffs claimed that they had lost any money or been the victim of a successful identity theft.

A district court dismissed the complaints, finding that the employees had failed to show an injury under Washington law though did have federal standing.

The federal appellate panel in Seattle agreed, finding sufficient evidence to show that the employees had been harmed by the theft, even though their claims were somewhat hypothetical.

"Here, plaintiffs-appellants have alleged a credible threat of real and immediate harm stemming from the theft of a laptop containing their unencrypted personal data," Judge Milan Smith wrote for the court. "Were plaintiffs-appellants' allegations more conjectural or hypothetical - for example, if no laptop had been stolen, and plaintiffs had sued based on the risk that it would be stolen at some point in the future - we would find the threat far less credible."

The panel affirmed the district court's dismissal of the plaintiffs' state law claims, but found that they'd "sufficiently alleged an injury-in-fact for purposes of Article III standing."

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