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Randolph v. ING Life Insurance and Annuity Co.

February 20, 2007

REGINA RANDOLPH, ET AL., PLAINTIFFS,
v.
ING LIFE INSURANCE AND ANNUITY COMPANY, DEFENDANT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

Plaintiffs, seven current or retired District of Columbia employees, bring this purported class action on behalf of individuals whose private personal information, including Social Security numbers, was contained on the laptop computer of a representative of Defendant ING Life Insurance and Annuity Company ("ING"), which was stolen during a burglary of the representative's home. Plaintiffs' Complaint alleges two counts of invasion of privacy, one count of gross negligence, and one count of negligence. Defendant has moved to dismiss Plaintiffs' Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) on three grounds: (1) that Plaintiffs fail to allege any injury in fact and thus lack standing; (2) that Plaintiffs fail to state a claim on which relief can be granted; and (3) that Plaintiffs' claims are moot because Defendant has already provided Plaintiffs all the relief they seek. Upon a searching review of Defendant's Motion to Dismiss, Plaintiffs' Opposition, Defendant's Reply, and the relevant statutes and case law, the Court concludes that Plaintiffs lack standing because they fail to allege a cognizable injury in fact. As such, the Court will not reach Defendants' other arguments for dismissal, shall deny without prejudice Defendant's Motion to Dismiss, and shall remand this case to the Superior Court for the District of Columbia, pursuant to 28 U.S.C. § 1447(c).

I. BACKGROUND

Defendant ING Life Insurance and Annuity Company ("ING") provides investment advice, administrative services, and record keeping to participants in the District of Columbia 457 Deferred Compensation Plan (the "Plan"). Compl. ¶ 16. Plaintiffs allege that they are seven of more than 13,000 current and former District of Columbia employees who, in connection with their participation in the Plan, provided ING with their private personal information, including their names, addresses, and Social Security numbers (hereinafter "Plaintiffs' Information"). Id. ¶¶ 2, 17.*fn1 Plaintiffs further allege that, on or around June 12, 2006, "a low-ranking data analyst and long time ING employee," removed files containing Plaintiffs' Information from an ING facility and took the files to his home, where he copied them onto his laptop computer. Id. ¶ 19.*fn2

The ING employee's laptop computer -- containing Plaintiffs' Information -- were subsequently stolen during a burglary of the representative'shome, id., and on or around June 19, 2006, ING publicly announced that the private information of 13,000 District of Columbia workers and retirees had been disclosed as a result of the burglary. Id. ¶ 18.

Plaintiffs do not allege that the burglary was anything other than a common burglary or that it was undertaken for the purpose of accessing Plaintiffs' Information. Rather, Plaintiffs allege that the ING employee in question "was able to easily access computer files containing" Plaintiffs' Information to copy the files onto his personal laptop, and "had been removing the data from [sic] ING facility for a significant period of time in a practice expressly or implicitly ratified by ING." Id. ¶ 20. Plaintiffs assert that the ING employee's access to and duplication of Plaintiffs' Information violated Plaintiffs' right to privacy, and was "the result of ING's grossly negligent and/or willful and intentional failure to establish appropriate safeguards to ensure the security and confidentiality of District of Columbia employee records and to protect against any anticipated threats or hazards to the security and integrity of those records." Id. Furthermore, Plaintiffs allege that ING knew about the burglary within hours of its occurring, but did not inform Plaintiffs of the burglary until seven days later, "despite knowledge of the imminent and substantial risk of serious harm to the personal security of the affected employees." Id. ¶ 21. Finally, Plaintiffs allege upon information and belief, that the stolen laptop computer has not been recovered and can easily be accessed and duplicated because it is not encrypted or password protected. Id. ¶ 19.*fn3

Plaintiffs assert that the "unauthorized and unconsented disclosure of an individual's name, address, date of birth and Social Security number creates a substantial risk of identity theft," id. ¶ 23, and that "nationwide studies confirm that, on average, victims of identity theft spend hundreds of hours in personal time and hundreds of dollars in personal funds to resolve their credit issues," id. ¶ 24.Significantly, however, none of the Plaintiffs assert that they have actually been the victim of identity theft. Instead, Plaintiffs allege that the disclosure of their Information raises concerns about Plaintiffs' safety because, for example, Plaintiffs' Information could be used to find out where police personnel live. Id. ¶ 26. Specifically, Plaintiffs allege that as a "direct and proximate result of [ING's] acts and omissions, they "have been exposed to a risk of substantial harm and inconvenience, and have incurred or will incur actual damages in purchasing comprehensive credit reports and/or monitoring of their identity and credit for the indefinite future." Id.

Plaintiffs filed their four-count Complaint in the Superior Court for the District of Columbia on June 27, 2006. Counts One and Two of Plaintiffs' Complaint allege that ING's acts and omissions violated Plaintiffs' "clearly established right to privacy." Id. ¶¶ 35-38. Counts Three and Four of Plaintiffs' Complaint allege that ING's acts and omissions constituted gross negligence and negligence, respectively. Id. ¶¶ 39-42.ING removed this action to the United States District Court for the District of Columbia on July 7, 2006, pursuant to 28 U.S.C. §§ 1441, 1446, and 1453. On September 1, 2006, ING filed its Motion to Dismiss Plaintiffs' Complaint (hereinafter "ING's Mot. to Dismiss"). Plaintiffs filed their Opposition to ING's Motion to Dismiss on September 25, 2006, and ING filed its Reply on October 9, 2006. Thereafter, on October 13, 2006 and October 18, 2006, ING filed Notices of Supplemental Authority, advising the Court of decisions handed down after ING's Motion to Dismiss was fully briefed, which ING believes provide additional support for its Motion to Dismiss. Plaintiffs filed a Response to ING's Noticesof Supplemental Authority on October 24, 2006, which ING subsequently moved to strike on October 27, 2006. Plaintiffs opposed ING's Motion to Strikeon November 6, 2007, and ING filed a Reply in support of its Motion to Strike on November 7, 2007.

II. LEGAL STANDARD

A. Federal Rule of Civil Procedure 12(b)(1)

Pursuant to Federal Rule of Civil Procedure 12(b)(1), a court must dismiss a case when it lacks subject matter jurisdiction. In general, a motion to dismiss under Federal Rule of Civil Procedure 12(b) should not prevail "unless plaintiffs can prove no set of facts in support of their claim that would entitle them to relief." Kowal v. MCI Commc'ns. Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). A court may appropriately dispose of a case under 12(b)(1) for standing, and may "consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Coalition for Underground Expansion v. Mineta, 333 F.3d 193, 198 (D.C. Cir. 2003) (citations omitted); see also Artis v. Greenspan, 223 F. Supp. 2d 139, 152 n.1 (D.D.C. 2002) ("A court may consider material outside of the pleadings in ruling on a motion to dismiss for lack of venue, personal jurisdiction or subject matter jurisdiction."); Vanover v. Hantman, 77 F. Supp. 2d 91, 98 (D.D.C. 1999) ("where a document is referred to in the complaint and is central to plaintiff's claim, such a document attached to the motion papers may be considered without converting the motion to one for summary judgment") (citing Greenberg v. The Life Ins. Co. of Virginia, 177 F.3d 507, 515 (6th Cir. 1999)). At the stage in litigation when dismissal is sought, the plaintiff's complaint must be construed liberally, and the plaintiff should receive the benefit of all favorable inferences that can be drawn from the alleged facts. EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997). In spite of the favorable inferences that a plaintiff receives on a motion to dismiss, it remains the plaintiff's burden to prove subject matter jurisdiction by a preponderance of the evidence. Am. Farm Bureau v. Envtl. Prot. Agency, 121 F. Supp. 2d 84, 90 (D.D.C. 2000).

B. Federal Rule of Civil Procedure 12(b)(6)

"In evaluating a Rule 12(b)(6) motion to dismiss for failure to state a claim, unlike resolving a motion under Rule 12(b)(1), the court must construe the complaint in a light most favorable to the plaintiff and must accept as true all reasonable factual inferences drawn from well-pleaded factual allegations." In re United Mine Workers of Am. Employee Benefit Plans Litig., 854 F. Supp. 914, 915 (D.D.C. 1994); see also Schuler v. United States, 617 F.2d 605, 608 (D.C. Cir. 1979) ("The complaint must be 'liberally construed in favor of the plaintiff,' who must be granted the benefit of all inferences that can be derived from the facts alleged."). While the court must construe the Complaint in the Plaintiff's favor, it "need not accept inferences drawn by the plaintiff[] if such inferences are not supported by the facts set out in the complaint."

Kowal, 16 F.3d at 1276. Moreover, the court is not bound to accept the legal conclusions of the non-moving party. See Taylor v. FDIC, 132 F.3d 753, 762 (D.C. Cir. 1997). The court is limited to considering facts alleged in the complaint, any documents attached to or incorporated in the complaint, matters of which the court may take judicial notice, and matters of public record. See St. Francis Xavier Sch., 117 F.3d at 624; Marshall County Health Care Auth. v. Shalala, 988 F.2d 1221, 1226 n.6 (D.C. Cir. 1993). Factual allegations in briefs of memoranda of law may not be considered when deciding a Rule 12(b)(6) motion, particularly when the facts they contain contradict those alleged in the complaint. Henthorn v. Dep't of ...


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