A recent U.S. Court of Appeals for the First Circuit decision is the second recent federal court decision appearing to impose a heavier burden on banks to protect their customers from cyberthieves.
Decided in July, Patco Construction Co. v. Peoples United Bank, 684 F.3d 197 (1st Cir. 2012) addressed whether a bank’s security measures to protect customers from online threats were “commercially reasonable.” In finding that they were not, the First Circuit is creating a trend on the heels of the 2011 decision by the U.S. District Court for the Eastern District of Michigan in Experi-Metal Inc. v. Comerica Bank, No. 09-14890, 2011 WL 2433383 (E.D. Mich. June 13, 2011), which held that a bank’s conduct in a similar circumstances failed to meet the “good faith” standard.
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