grandma remember him right so you're filling in for him the just record in this matter aired in a few fundamental most notably the court misinterpreted federal pleading also erred in concluding that it would be futile in allowing the plaintiffs to amend their complaint now i know that the cordesman court is aware that this case is now before the court for the second time previously just from a general perspective as an considering a data breach case that defendants failed to take reasonable measures to secure their payment processing network some say that it should never have happened and that plaintiffs and others were harmed as a result the defendants filed a motion to dismiss the plaintiff's claims now just i'll just get to the point the court's ruling dismissal of the homes claims holmes alleges specifically the specific store where he purchased the product from contacted his credit card company the and cancel the card two weeks later he received a new card he also spent time and money time scuse me modern his financial accounts that's sufficient to allege fraud act requires actual damage and so what's the actual damage here the actual damages that whenever one of homes this information was stolen number two he's been a victim of credit card fraud which is financial loss and so and was there financial law alleged in the complaint he alleges that he was a victim of credit card fraud in the point yes and and there is a what does he mean by that it means that he was a victim of i mean that there was a fraudulent charge on his credit card statement shortly after the brief after he stopped at a compromised store but that doesn't the sara lee mean there was financial are to him i would disagree that under the consumer product that that is financial arm he's obligated to pay his your credit card statements and other courts have found it such that you're not obligated to plead on reimburse loss so you're asking for an inference that because there was a fraudulent because there was a fraudulent fee on his on his account we are the reasonable though i would say that i wouldn't i would say that because of the state of the litigation that there was a required inference number one and number two more importantly what the district court did is actually used a reverse inference they just record inferred that the absence  of a specific factual factual allegations was not sufficient to plead and the primary case that the district court relied upon throughout the entire opinion was the barnes and noble decision in the district court which has since been reversed ok and most notably in barnes and noble there were an alleged credit card fraud in the lower case which is the p f chang's case one of the plaintiffs alleged that there was credit card the other decision michael's even bacchis that's even bought case yes and the other case that the district court relies upon is the michael's case primarily and the michael's case the court relied upon in a general allegations that the plaintiffs will suffer harm debit card and credit plaintiffs and the other victims would suffer credit card debit card fraud or as a result of the breach but the individual plaintiffs in that complaint did not specifically allege credit card or debit card fraud so at involved an allegation that the person had a monthly out of pocket payment backed also in the court said that's an actual injury that's actual damage this specific allegation of the plain was that she incurred a project credit card charge and also she alleged mitigation expenses which was a renewal of credit monitoring service right but it was the latter that the course cited in saying there was actual damage well i thought that that accorded it consider both but it says right in the opinion a monthly seven thousand dollars out of pocket is a form of actual damage it's real and measurable illinois does not require more so what if you allege causation because they didn't allege the specific date well when they shopped at the store which just isn't it's not required under the pleading standers plaint there's more than enough alleged to satisfy the causation standard for it now moving to the negligence claim again i think that the damages analysis is similar though you know maybe it's slightly different with respect to negligence the allegations more than sophistry sufficient to one of the arguments of how did you well i think that one of the important things that's argued in our briefs that wasn't at issue was the collateral source doctrine with respect to negligence and the doctrine you know under all noise many states if you apply the law as written in l annoying it would bar any consideration of reimbursement on reimburse here what in rejecting the collateral source argument in the lower court the district court relied upon it a decision that  component illinois supreme court that the in that case the individual had paid part because there was an insurance issue they've been billed i think for fifteen thousand dollars their insurance paid ten thousand dollars because of an arrangement with the with the hospital and the supreme court held that the jury could be instructed on the full amount built so that the district court's interpretation of that ruling is just wrong and defendants basically i mean they don't even try to argue that in their response brief so i thought their argument was that the doctor apply because holmes never paid or was obligated to pay the fraudulent chart and that that takes the that assumption if that's what happened at the at that motion dismissed it was just incorrect now about duty and the cooney case the cuny case is interesting because well number one to the seventh circuit i think hamilton is a very thoughtful and careful judge and he was on both bands and he wrote the second decision and obviously didn't consider schnucks is contrary to the to what he had joined in different bach that day yes exactly and you can't just say well i you know forget forget to as i read it not as carefully as you have no doubt but i read it is saying that the lack of duty in and recognized cooney results in the economic lost private right of action under their new statute but that's what the do you know also thrust upon is peppa with respect to a specific duty to look to the illinois legislature at the time the recent occasions statute did not have language just a set or level set yes this is the second time we've been before the court here the last time the court consider the standing issue and in judge kelly's opinion the court made clear that at the twelve the six stage there would be a higher hurdle and a different test for whether or not the allegations in the complaint the same complaint that was before the court then is where the court now whether the allegations in that complain would meet the causation and injury requirements of stating a claim under illinois law that's what this court held in super value almost contemporaneously the scottrade decision came down  decision saying the same thing under illinois law that there's a different and higher standard for twelve the six purposes than there is for article three standing purposes in terms of whether the pleading passes muster so the issue today isn't a standing issue it's an illinois law issue in terms of what kind of injuries are required to state a claim there is a lot of illinois law on this point the you case that we cited in our brief makes clear that as a matter of illinois injury doesn't get it done under any of the theories of liability here only a present legally cognize of all injury would get it done and we do have case law that was discussed just now that gives a lot of insight into what constitutes illegally cognize of all injury whether it's a negligence claim a contract claim or and if a claim first standing alone non economic injury inconvenience annoyance standing alone doesn't constitute a legally cogniza box i mean unless unless you think our colleagues on the seventh don't know what they're doing i think they know absolutely what they're darrent and i know they do so it's our obligation to reconcile not just sort of at all reconcile them for the credit monitoring that was the linchpin of or finding in different book that an injury had been adequate ledge here as judge kelly suggested there is no allegation of any out of pocket loss now i agree that the only way you could get there is as judge kelly suggested by making an inference that the fraudulent charge that was a wedge in the complaint resulted in an out of pocket loss to plaint holmes our view is that is not remotely a plausible inference because everybody in this courtroom knows that when a fraudulent charge shows up on your credit card you are not liable for the charge and all you need to do is call your bank and have the charge reversed so it's not plausible to infer from the mere fact of a fraudulent charge that there was liability on the charge and even less plausible to infer that the charge was paid and it's particularly implausible to infer that here where the plaintiff knows whether or not the charge was paid and the score in its original opinion warrant the place that the allegation of an unremembered charge would need to be made in order to state a claim perhaps and just alleging if i didn't charge without alleging payment of that five then charge wouldn't get it done and yet what happened when we went back before judge montgomery was the plaintiff holmes did move for leave to amend his complaint but he never sought leave to amend to disclose whether or not that charge had been paid now against all of that background how is it infer that that charge was paid the only plausible inference from all of those fact is that it wasn't paid and if that charge wasn't paid there is no allegation in this complaint of any economic loss and without i think the case law if anything is clearer we have actually a fair amount of case law as to what needs to be pleaded at emotion is mistake for twelve  purposes in order to plead causation and a data security case the nationwide case that we cited in our brief actually goes through the case law on this i acknowledge there is no eighth circuit case on this but we've got resnick from the eleventh circuit we've got stonework from the ninth circuit we've got the brush case from the from florida and the nationwide case from ohio and those cases all are clear in saying that in order to plead causation in a data security breach case for twelve the six purposes you need to do two things first you've got to make time in sequence allegations that a stablished that it's at least possible that you work identity theft whether it's a fraudulent charge or whatever was caused by the event in question what are time in sequence allegations those are allegations that say basically my injury occurred at a point in time where sequentially the data breach could have caused it what would that mean here that would mean here that what was required what is required under these cases is that plain of homes allege i shopped at a super value store during the period of the intrusion at a point in time prior to when the fido in charge showed up on my account if you legs that then it's at least possible that the super value event caused the filing charge we don't have those allegations here there is no allegation in this complaint that plaintiff holmes shops during the period of the intrusion there's not even an allegation that he shop at the super value store in question prior to the fraudulent charge being made on his car without those without the sort of baseline time and sequence allegations under the cases i just ticked off he fails to plead causation for twelve six purposes but but even if you plead to the time and sequence elements which actually work pleaded in those cases that i ticked off resnick and stonework and the other cases whole but that's not enough you also have to then make additional factual allegations that convert the causation from not really possible which is what the time and sequence allegations do but to plausible and that what those allegations would be would sort of vary from case to case depending on the type of fraud we're talking about the type of data breach we're talking about certainly in a payment card data breach like this one you'd expect allegations that  some part of the way to exclude the possibility of the fraud having been sourced from another merchant's breach this was two thousand and fourteen at this very same time target breach home depot breach even marcus br breach all these breaches that you're reading about in the cases they all occurred at this exact same time none of those allegations appear anywhere in this complaint so for both reasons there's a failure to plead causation  minute orders there's no there's no reasoning in either of those cases but if you actually go back to the complaints in those cases which we did and we cited the relevant portions of those complaints in our brief you'll see that in those complain an out of pocket loss was alleged in each one of those complaints as judge kelly suggested earlier you can go from start to finish in this complaint you'll find no allegation of any economic loss that's the key distinction  there is the relevant standard and this came up in the reply because i did want to address that so what controls when you make a motion like this post judgment this is the post judgment motion is rule sixty b it's not a fifteen a test now now that's not what we said in roop and again anaphora now for we well we said we said that you cannot ignore rule fifteen  even though the timing is fifty nine he sixty be understood or fifteen a is not is not the government standard it can't be ignored and absolutely absolutely but deny the motion where at a minimum where you are not driving the plaintiff of a hearing on the merits that's how i read enough for now for reference for makes the point that there's kind of two lines of cases but you can square them off by looking at the difference in the one line of cases being that the plaintiff wasn't being deprived of a hearing on the merits now here so that this missile is a subject matter to your stiction dismissal so these fifteen plaintiffs were dismissed without prejudice that dismissal does not deny them their claim on the merits so under connecter never  delay that the district court found would be sufficient standing alone to deny the motion now there's also judge kelly's decision in ash which looks at the same delay reasons standing alone now the futility argument i think is an independent justification for the denial of the motion and you don't even have to look at it in terms of  alleged by those fifteen plaintiffs is a risk of future injury which is not actionable under illinois law under you and it's type of injury not accompanied by out of pocket loss which under different block is not actionable so so the injury alleged by the fifteen is an actionable leave aside standing is an actionable under illinois few addressed a few points that were raised at the first one is the the argument was respect two opposing counsel argues that you need to plead on reimbursed loss courts have come out the other way on that i know the equal facts court in georgia just issued an opinion at the end of january expressly rejecting that approach in a number of other courts have done so as well i know what i was up to before i started the resnick decision eleventh circuit expressly held as such and that's the prevailing case is you're not required to prevent loss because to assume that a plaintiff who incurs a fraudulent charge whether it's a credit card or debit charge card charge was reimbursed fully is just that's just not nor on the record so on the other issue the standing threshold we added additional and more timely allegations as to the frequency of fraud resulting from this type of attack which is about forty percent in the first year notwithstanding all of the other years you know the fact that with a breach like this it can go on for year after year the court refused to even consider those allegations because of a denial of a rule fifty nine motion and the lower court the fact that we brought our proposed motion to amend a month and a half or so after the mandate was issued