Pinero contended that sometime in early 2008, defendants disposed of her 2005 federal and state tax returns intact in a public dumpster. An unrelated individual found Pinero’s tax returns, as well as those of over 100 other people, and alerted a local television news station.
Pinero brought a putative class action, asserting state law claims of fraud, breach of contract, negligence, invasion of privacy, violation of the Louisiana Database Security Breach Notification Law ("LDSBNA") and violation of the Louisiana Unfair Trade Practices Act (LUTPA). She also alleged that Jackson Hewitt violated 26 U.S.C. § 6103, which restricts certain disclosures of tax returns. Pinero sought general damages for fear, panic, anxiety, sleeplessness, nightmares, embarrassment, hassle, anger, lost time, loss of consortium, and other emotional and physical distress, as well as special damages for credit monitoring, credit insurance, reimbursement for all out-of-pocket expenses related to notifying creditors of the improper disclosure, and reimbursement for all out-of-pocket expenses related to identity theft.
Jackson Hewitt moved to dismiss all claims. Highlights of the court’s decision include:
- Dismissal of the negligence claim because the increased risk of identity theft is too speculative to qualify as actual damage;
- dismissal of the LDSBNA claim, in part because it only applies to breaches of computerized data;
- dismissal of the contract claim, in part because expenses related to credit monitoring to guard against future identity theft are not compensable damages;
- dismissal of the claim under 26 U.S.C. § 6103, since that statute only prohibits disclosure of tax returns by persons to whom access to tax returns was granted by the IRS; and
- denial of the motion to dismiss the invasion of privacy claim, since the alleged facts supported a claim for unreasonable public disclosure of private facts.
In response to this decision, Pinero filed an amended class-action complaint, re-pleading the fraud and LUPTA claims and maintaining the invasion of privacy claim.