In November 2015, VTech Electonics North America LLC (VTech) announced that an unauthorized party infiltrated its network and gained access to the personal information of 5 million adults and 6.5 million children through its Learning Lodge app store, including their names, email addresses, security questions, photographs and messages [view related post].

One month following the announcement, 8 adults and 14 children sued VTech alleging that VTech breached its contract with them and that they were at risk of identity theft as a result of the incident.

An Illinois federal judge dismissed the case last week saying that the plaintiffs were unable to say how the incident could lead to potential identity theft, and that they were further unable to show any future harm. Therefore, they did not have standing to pursue the claims.

Interestingly, the judge dismissed the breach of contract claims saying that the online customer agreements were entered into between VTech and adults, and that the online services specifically state that they are intended for adult use only. Therefore, the children were not third party beneficiaries of those contracts.