LinkedIn password hack sueball kicked to the kerb by judge

A class-action lawsuit launched against LinkedIn after hackers leaked the website's user passwords has been dismissed before reaching trial.

Northern California US District Judge Edward Davila ruled that two premium-account holders had been unable to demonstrate they suffered any actual harm as a result of the 2012 hack, which resulted in the online exposure of 6.5 million password hashes.

LinkedIn failed to salt these encoded login credentials, which were created using the outdated SHA-1 algorithm. Salting hashes, for the uninitiated, thwarts attempts to recover the original passwords.

Katie Szpyrka of Illinois and Khalilah Wright of Virginia sued within days of the breach becoming public knowledge in June 2012, alleging that LinkedIn failed to stick by a promise on security outlined in its privacy policy.

The duo sought compensation for an alleged breach of contract, claiming in part that they would not have paid to upgrade to a premium account if they had known that the social network didn't offer industry-recommend security even to its paying customers.

However, Judge Davila said premium users were paying for extra networking tools and website features rather than tighter security.

Szpyrka and Wright also admitted that they had not read LinkedIn's privacy policy prior to the hack, another factor that counted against them, according to Threatpost.

The privacy policy at the time made a promise that "LinkedIn is password-protected, and sensitive data (such as credit-card information) is protected by SSL encryption" and stated that the social network audits its system for vulnerabilities. The policy also declared that "all information that you provide will be protected with industry-standard protocols and technology" which could be taken to refer to how LinkedIn itself stored and protected passwords, among other things. The policy went on to warn that security breaches were a potential problem for any online business.

Judge Davilia tossed out the case after ruling that the exposure of Wright's password didn't necessarily place her at greater risk of identity theft.

It was feared miscreants would crack the unsalted password hashes, discover the original passwords and use them to unlock accounts on other websites as too many folks reuse the same login credentials across the web for convenience.

But the breach didn't result in any financial harm or injury to Wright, according to the judge:

Wright merely alleges that her LinkedIn password was “publicly posted on the Internet on June 6, 2012”. In doing so, Wright fails to show how this amounts to a legally cognizable injury, such as, for example, identify theft or theft of her personally identifiable information.

Judge Davila's ruling can be found here [PDF]. ®