Chase persuaded New York State appeal judges to throw out a class action for sharing customer data with third parties. How?
Topic: Data protection
Who: Customers of Chase Manhattan Bank v Chase Manhattan Bank
Where: New York State Appellate Court
When: April 2002
Customers of Chase Manhattan Bank were not impressed to discover that their bank had sold their details to third parties, who then started cold-calling them. They brought a class action against the bank under the New York General Business Law. However the New York State Appellate Division, Second Dept dismissed the claim on the basis that no actual economic loss or harm had been proved.
Why this matters:
Elsewhere in marketinglaw we report that large parts of the up and coming E-commerce Regulations to be brought into force in the UK in Summer 2002 will be enforceable only by way of a private action by individuals for damages for breach of statutory duty. Such an action will only have a prospect of success if the individual bringing the claim can prove that the failure to comply with the regulations they are suing about has caused them actual harm. The outcome of this case in the US does not bode well for such actions, particularly bearing in mind that historically US advocates and courts have been more imaginative than most in identifying pretexts upon which damages can be awarded.
On the other hand there is one big difference between the subject matter of this New York action and any possible action for breach of the new E-commerce Regulations, for instance as a result of a failure to identify unsolicited commercial e?mail as such as soon as it is received. The difference is that whereas the cold calls to Chase Manhattan Bank customers were not costing the customers the price of the call, the time spent by a commercial e-mail recipient opening it, reading it and deleting it is arguably going to cost the hapless spamee the relevant telephone line charge. We will have to see whether any UK e-mail recipient decides to institute a test case.
Acknowledgement: Our thanks to Hall Dickler Kent Goldstein and Wood for their piece on this case on their website adlaw.com, which inspired us in writing this article.