A procedural violation of a state’s privacy statute is not alone enough to establish Article III standing—a plaintiff must suffer a concrete injury, such as an increased risk of identity theft.  The Fourth Circuit’s decision in O’Leary v. TrustedID, Inc., 2023 WL 2125996 (4th Cir. Feb. 21, 2023) confirms this—but also illustrates how Article III standing is a two-edged sword that may allow a plaintiff to defeat a defendant’s attempt to remove a case to federal court. 

The plaintiff in O’Leary filed a class action against TrustedID in South Carolina state court for allegedly violating South Carolina’s Financial Identity Fraud and Identity Theft Protection Act, S.C. Code Ann. § 37-20-180.  The statute prohibits requiring consumers to use six or more digits of their Social Security numbers to access a website without also requiring some other authentication measure.  The plaintiff alleged that TrustedID’s website required him to provide six digits of his Social Security number and did not have any other safety precautions, such as a password requirement.

TrustedID removed the suit to federal court under the Class Action Fairness Act.  While TrustedID’s motion to dismiss was pending, the plaintiff filed a motion asking the court to decide whether he had Article III standing to bring his claims in light of TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), which had been recently decided.  The district court held that the plaintiff had standing, but it dismissed the case on the merits.

The Fourth Circuit reversed the district court’s ruling on standing and ordered that the case be remanded back to state court.  In the court’s view, the plaintiff lacked standing because he could not establish that entering six digits of his Social Security number—as opposed to five—meaningfully raised the risk of identity theft.  The court also rejected the argument that the plaintiff could establish standing based solely on an abstract privacy interest in his Social Security number.  Intangible harms are sufficient to confer standing if they bear a close relationship to a traditional or common law analog—such as “intrusion upon seclusion” or “disclosure of private information.”  But the court held that neither of those analogs was relevant because the plaintiff voluntarily disclosed his Social Security number to TrustedID.

Importantly, the Fourth Circuit’s decision did not result in a dismissal of the plaintiff’s claim—its decision addressed only federal jurisdiction, not the merits—so the outcome was an order that the case be remanded to state court.

The Fourth Circuit’s decision confirmed that a plaintiff seeking to present a claim in federal court premised on violations of state privacy statutes must show a more concrete harm than merely the fact that the statute was violated.  However, as this decision illustrates, the benefits of this standing doctrine do not flow in just one direction:  plaintiffs may be able to rely on lack of federal standing to protect their choice of a state forum.

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Photo of Sonya Winner Sonya Winner

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports.  She has handled numerous antitrust and consumer disputes, many of them class actions, in state and…

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports.  She has handled numerous antitrust and consumer disputes, many of them class actions, in state and federal courts across the country.

Sonya’s cases typically involve difficult technical issues and/or complex legal and regulatory schemes. She is regularly able to resolve cases before the trial phase, often through dispositive motions. But when neither summary judgment nor a favorable settlement is an option, she has the confidence of her clients to take the case all the way through trial and on appeal. Her recent successes have included a cutting-edge decision rejecting a “true lender” challenge to National Bank Act preemption in a class action involving interest rates on student loans, as well as the outright dismissal of a putative antitrust claim against the National Football League and its member clubs asserting an unlawful conspiracy to fix cheerleader compensation. 

Sonya has been recognized as a leading trial lawyer by publications like Chambers and the Daily Journal. She is chair of the firm’s Class Action Litigation Practice Group.

Photo of Andrew Soukup Andrew Soukup

Andrew Soukup serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a…

Andrew Soukup serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a variety of advertising, consumer protection, privacy, and product defect and safety claims, with exposure ranging from millions to billions of dollars. Based on his “proven record,” Andrew has been recognized as an “attorney you want on your side in a bet-the-company case.”

Andrew’s clients include those in the consumer products, life sciences, financial services, technology, automotive, gaming, and media and communications industries. He has consistently helped his clients prevail in litigation in federal and state courts across the country against putative class representatives, government agencies, state attorneys general, and commercial entities.

With a long history of representing companies subject to extensive federal regulation and oversight, Andrew has a unique ability to help courts understand the complex environment that governs clients’ businesses. Clients turn to Andrew because of his successful outcomes at all stages of litigation, his responsiveness and attention to their matters and his deep understanding of their businesses.

Andrew’s recent successes include:

Leading the successful defense of several of the world’s leading companies and brands in class actions accusing them of engaging in deceptive marketing or selling defective products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
Defeating claims against one of the nation’s leading consumer products companies in industry-wide, multidistrict class-action litigation challenging the company’s marketing and advertising of over-the-counter medicine containing allegedly ineffective ingredients, which earned Andrew recognition by American Lawyer as a “Litigator of the Week.”
Delivered wins in multiple nationwide class actions on behalf of leading financial institutions related to fees, disclosures, and other banking practices, including defending several financial institutions accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recognition as a “Class Action Group of the Year.”
Represented several consumer product and life sciences companies from lawsuits seeking economic damages arising out of the sale of products that allegedly caused personal injuries.
Helping several of the world’s most prominent companies from ESG-related claims accusing them of misrepresenting their practices.

Andrew has also achieved favorable outcomes for clients in commercial and indemnification disputes involving contracts, fraud, and other business tort claims. He helps companies navigate contractual and indemnification disputes with their business partners. Additionally, he provides guidance on arbitration agreements and has helped numerous clients avoid multi-district and class-action litigation by enforcing their arbitration agreements.

As a recognized thought leader on issues impacting class action litigation, Andrew regularly contributes to the firm’s blog, Inside Class Actions, and was recently featured in an interview with Litigation Daily on class-action litigation issues. In recognition of his achievements, he has been recognized by The American Lawyer as a Lawyer of the Week, and the Daily Journal recently included him on their list of Leading Commercial Litigators (2025).

Watch: Andrew shares insights on class action litigation, as part of our Navigating Class Actions video series.

 

Photo of Jonah Panikar Jonah Panikar

Jonah Panikar is an associate in the firm’s Washington, DC office, where he represents a variety of clients in their most complex, high-stakes litigation matters. He regularly defends clients in highly regulated industries against class action and mass tort claims.

Jonah maintains a…

Jonah Panikar is an associate in the firm’s Washington, DC office, where he represents a variety of clients in their most complex, high-stakes litigation matters. He regularly defends clients in highly regulated industries against class action and mass tort claims.

Jonah maintains a robust pro bono practice focused on criminal justice. He defends indigent clients against serious felony charges at trial. He also helps incarcerated clients obtain financial compensation for civil rights abuses suffered in prison.