Late last year a massive data hack at Target exposed as many as 110
million consumers around the country to identity theft and fraud. As
details of its lax computer security oversight came to light, customers
whose passwords and credit card numbers had been stolen banded together
to file dozens of class-action lawsuits against the mega-chain-store
company. A judge presiding over a consolidated suit will now sort out
how much damage was done and how much Target may owe the victims of its
negligence. As the case proceeds, documents and testimony pertaining to
how the breach occurred will become part of the public record.
All this may seem like an archetypical story of our times, combining
corporate misconduct, cyber-crime, and high-stakes litigation. But for
those who follow the cutting edge of corporate law, a central part of
this saga is almost antiquarian: the part where Target must actually
face its accusers in court and the public gets to know what went awry
and whether justice gets done.
Two recent U.S. Supreme Court rulings—AT&T Mobility v. Concepcion and American Express v. Italian Colors—have
deeply undercut these centuries-old public rights, by empowering
businesses to avoid any threat of private lawsuits or class actions. The
decisions culminate a thirty-year trend during which the judiciary,
including initially some prominent liberal jurists, has moved to
eliminate courts as a means for ordinary Americans to uphold their
rights against companies. The result is a world where corporations can
evade accountability and effectively skirt swaths of law, pushing their
growing power over their consumers and employees past a tipping point.
To understand this new legal environment, consider, by contrast, what
would have happened if Amazon had exposed its 215 million customer
accounts to a security breach similar to Target’s. Since Amazon has
taken advantage of the Court’s recent decisions, even Amazon users whose
bank accounts were wiped clean as a direct result of the hack would not
be able to take the company to court. “The lawsuits against Target
would almost certainly not be possible against Amazon,” says Paul Bland,
executive director of Public Justice. “It’s got its ‘vaccination
against legal accountability’ here.”
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