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Litigation

12 June 2018

11th Circuit Vacates LabMD Enforcement Order; Casts Doubt on Decades of FTC Cybersecurity Enforcement Practices

In recent years, the Federal Trade Commission has increasingly exercised its enforcement authority to target deceptive and unfair information security practices.  During this time, enforcement actions have targeted companies for failing to honor their promises to implement “reasonable” or “industry standard” security practices, defend against well-known security threats, put in place basic security measures, or take many other basic data security steps.  And despite challengers arguing that the FTC provided insufficient notice before pursuing these actions or that the actions otherwise exceeded the FTC’s Section 5 enforcement authority, the Commission generally has a track record of successfully defending its prerogatives.     (more…)

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24 May 2018

GDPR Day is Here!

Whether you are marking today with a glass of champagne, a shot of whiskey, or a hot cup of tea, today marks a significant day for privacy professionals world-wide.

Here’s to all of the privacy professionals who have put in so many hours to prepare for the GDPR, fully effective as of Friday May 25, 2018 at midnight in Brussels; that is 6 PM eastern on Thursday, May 24th for toasting purposes.

For business executives, policymakers, and consumers who have become aware of the GDPR in recent weeks and are interested in learning more, visit our GDPR resource page here.

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23 May 2018

FCC Asks for Input After ACA International v. FCC

The Telephone Consumer Protection Act (TCPA) bar has been reeling ever since the U.S. Court of Appeals for the D.C. Circuit overturned a couple of key Federal Communications Commission (FCC) rules in ACA International v. FCC, including the FCC’s overbroad interpretation of the definition of an autodialer. However, the ruling still left several key provisions in place that facilitate the potential for significant liability and sow uncertainty for everyday business and compliance operations. Now the commission has issued a public notice seeking input about how it should interpret the TCPA. Comments are due June 13, 2018, with replies due June 28. (more…)

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22 May 2018

Supreme Court Finds Expectation of Privacy for Rental Car Driver

In its preview of hot privacy and cybersecurity topics for 2018, Data Matters noted that this year the Supreme Court was scheduled to decide a number of cases with potentially substantial privacy implications.  This past week, the Court issued its opinion in one such case, Byrd v. United States, a case concerning “whether a driver has a reasonable expectation of privacy in a rental car when he or she is not listed as an authorized driver on the rental agreement.”  Concluding that a driver does have such an expectation, the Court issued a narrow and unanimous opinion that, as laid out below, could have implications for commercial privacy expectations in other contexts. (more…)

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30 March 2018

Alabama Passes Data Breach Notification Law; Breach Laws Now on the Books in All 50 States

And then there were none. Alabama has joined the ranks of the other 49 states with breach notification requirements by enacting the Alabama Data Breach Notification Act of 2018 (the “Act”). The Act, which was signed into law by Alabama Governor, Kay Ivey on March 28, 2018, requires companies to provide Alabama residents with notification of a breach within 45 days of discovery.  Notification is triggered by a determination of a breach that poses a risk of harm to impacted individuals. Alabama exempts from the definition of breach the good faith acquisition of sensitive personally identifying information by an employee or agent of a covered entity, unless the information is used for a purpose unrelated to the business or subject to further unauthorized use. Companies must notify the state AG in the same period if the breach requires notification of more than 1,000 “individuals” (defined as Alabama residents whose “sensitive personally identifiable information” was, or is reasonably believed to have been, accessed as a result of the breach). In addition, if more than 1,000 individuals are notified at a single time, companies must provide notice to consumer reporting agencies “without unreasonable delay.” Third parties who are contracted to process sensitive personally identifiable information must provide notice of a breach to the owner of that information within ten days of discovering the breach. Notice from a third party then triggers the 45-day notification period for the covered entity.

(more…)

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20 March 2018

D.C. Circuit Strikes Down Some Rules Governing Telephone Consumer Protection Act, Upholds Others

On March 16, 2018, the U.S. Court of Appeals for the D.C. Circuit issued a long-awaited ruling on a challenge to the Federal Communications Commission’s 2015 order that expanded the scope of the Telephone Consumer Protection Act (“TCPA”). In ACA International v. FCC, No. 15-1211, the court invalidated a rule that had broadly defined automatic telephone dialing systems, or “auto-dialers”; it also struck down the FCC’s approach to situations where a caller obtains a party’s consent to be called but then, unbeknownst to the caller, the consenting party’s wireless number is reassigned. In the same ruling, the court upheld the FCC’s decision to allow parties who have consented to be called to revoke their consent in “any reasonable way,” as well as the FCC’s decision to limit the scope of an exemption to the TCPA’s consent requirement for certain healthcare-related calls.

(more…)

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25 January 2018

Protecting Privilege in the Aftermath of a Data Breach

On Jan. 3, the United States Court of Appeals for the Sixth Circuit issued a decision that effectively required a company to turn over materials relating to a privileged forensic data breach investigation because, the court concluded, the company had implicitly waived privilege when it disclosed certain of the forensic firm’s conclusions in response to a discovery request. The Sixth Circuit’s decision emphasizes the need for caution by litigants wishing to raise a defense that relies on privileged investigations and reports, including third-party forensic reports, or otherwise disclosing the conclusions of such investigations and reports. (more…)

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22 December 2017

The Fourth Edition of The Privacy, Data Protection and Cybersecurity Law Review Is Available

The fourth edition of The Privacy, Data Protection and Cybersecurity Law Review takes a look at the evolving global privacy, data protection and cybersecurity landscape in a time when mega breaches are becoming more common and businesses are coming under increased scrutiny from regulators, Boards of Directors and their customers. Several lawyers from Sidley’s global Privacy and Cybersecurity practice have contributed to this publication. See the links below for a closer look at this developing area of law. (more…)

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21 December 2017

Northern District of California Enjoins LinkedIn from Preventing Scraping of Public User Profiles

In a decision that may have profound implications for social media companies, the big data industry and website terms of use everywhere, Judge Edward Chen of the Northern District of California granted hiQ Labs’ motion for preliminary injunction on August 14, 2017, enjoining LinkedIn from “preventing hiQ’s access, copying, or use of public profiles on LinkedIn’s website.” hiQ Labs, Inc. v. LinkedIn Corporation (N.D. Cal. No. 3:17-cv-03301-EMC). The case is on appeal and will be heard by the Ninth Circuit in 2018. (more…)

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18 December 2017

DFARS Cyber Compliance And Potential For FCA Risk

*This article first appeared in Law360 on December 18, 2017.

For well over a year, defense contractors have had New Year’s Eve 2017 circled on their calendars, and not because they love the “auld lang syne” and a good glass of champagne. (Or at least not only for those reasons.) Dec. 31, 2017, is the deadline for when covered contractors must comply with the U.S. Department of Defense’s new Defense Federal Acquisition Regulation Supplement (DFARS) cybersecurity requirements. This holiday season contractors are thus making their lists and checking them twice in order to ensure that they will be compliant by the end of the year. And this intense focus is well warranted. The DOD is deeply committed to protecting its information, and the requirements are an important step in that regard.

But for all of the focus on Dec. 31, contractors must also remember that the focus on compliance must remain into the New Year — and beyond. New technologies will emerge. Contractors will buy new systems and hire new employees. And all the while, internal security teams will be trying to stay a step ahead of hackers and “white hat” security researchers. In short, despite contractors’ best efforts, gaps may be identified at any time. Moreover, these gaps may carry with them real consequences — not only the possibility of contract termination, but also the risk of costly and disruptive False Claims Act investigations and lawsuits, with the specter of treble damages, and the possibility of suspension and debarment, lurking. It is thus crucial that contractors continue to be vigilant about the regulations, and take steps to enable them to demonstrate their vigilance and compliance, in order to best position themselves to avoid liability.

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