A lawsuit against Amazon-owned Zappos will continue after the U.S. Supreme Court shot down an appeal from the online shoe retailer in a seven-year-old data breach case.
In the wake of a 2012 breach that exposed the contact information names, addresses, phone numbers and more of 24 million customers, Zappos faced several lawsuits from customers. Zappos argued unsuccessfully to the Supreme Court that customers shouldn’t be able to sue without proof they were harmed in a breach.
The Supreme Court agreed with a San Francisco appeals court that had previously revived the lawsuit. Both courts sided with the Zappos customers over the company, letting the lawsuit, which is seeking class-action status, continue. The appeals court found that the stolen data left customers vulnerable to identity theft, Bloomberg reported.
We’ve reached out to Amazon and Zappos and will update this story if we hear back. Amazon acquired the e-commerce company in 2009 for more than $800 million.
The case has major implications across the business world, where companies are seeking and storing more data about customers than ever. Significant data breaches are becoming common occurrence, and the Zappos case will go a long way toward deciding how much liability corporations will have if customer data is exposed, regardless of how it is used.
As Reuters reported, the key decision to be made in the Zappos case is whether customers can sue companies when their data is stolen, even if that information is not used for things like identity theft or making fraudulent charges. Prior to the appeals court ruling, a federal judge in Nevada had ruled that only victims who claimed financial loss could sue.