Yesterday, the United States established a new sanctions program designed to deter and financially target foreign parties who engage in, support or profit from “significant malicious cyber-enabled activities.” Declaring a national emergency, President Barack Obama issued an executive order authorizing the Secretary of the Treasury, in consultation with the Attorney General and Secretary of State, to identify as Specially Designated Nationals and Blocked Persons (SDNs) cyber-actors whose activities significantly harm the national security, foreign policy or economic health or financial stability of the United States. The U.S. government has not yet designated any parties under this new sanctions program. Once parties are so designated, U.S. companies must cease doing business with them and report any blocked property to the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).
Montana Governor Steve Bullock has signed a bill, H.B. 74, that will toughen the state’s breach notification law. The bill expands the definition of “personal information” covered by the law to include medical record information (as further defined by the state’s Insurance Information and Privacy Protection Act), taxpayer identification number, or other identification number issued by the Internal Revenue Service. The revised law also requires organizations to notify the Attorney General’s Consumer Protection Office in the event of a breach. Insurance entities such as licensees or insurance support organizations must also provide notification to the state Insurance Commissioner. Notice to these regulators must identify the number of affected individuals, state the date and distribution method of the notice to affected individuals, and include a copy of the notice provided to individuals. The law takes effect October 1, 2015.
On March 2, Wyoming Governor Matt Mead signed a bill, S.F. 36, amending the state’s data breach notification law to revise the state’s definition of “personal information” and to specify the type of information required in notices to individuals. The amendment removes from the definition of “personal information” an individual’s demand deposit account, savings account, employee identification number, place of employment, and mother’s maiden name. At the same time, it adds new data elements to the definition, including taxpayer identification number, birth or marriage certificates, biometric data, medical history and health insurance information. The new law also specifies that a notification letter to individuals affected by a breach must include the types of personal identifying information that were the subject of the breach, a general description of the breach, the approximate date of the breach, and the actions taken to protect the affected system from further breaches.
On November 11, 2014, the Connecticut Supreme Court held in Emily Byrne v. Avery Center for Obstetrics and Gynecology, P.C. (“Avery Center”) (SC 18904) that the federal Health Insurance Portability and Accountability Act (“HIPAA”) does not preempt state common law negligence and emotional distress claims against medical providers who improperly breach the confidentiality of a patient’s medical records and that “HIPAA may inform the applicable standard of care in certain circumstances.” In reaching its decision, the high court reversed the trial court’s dismissal of plaintiff Emily Byrne’s state common law causes of action for negligence and negligent infliction of emotion distress against Avery Center for releasing information about her pregnancy without her authorization in complying with a subpoena in a paternity action. Although other states have reached similar holdings, the Connecticut ruling is notable in light of the passage of the Health Information Technology for Economic and Clinical Health (“HITECH”) Act, which expanded HIPAA liability to business associates. As such, covered entities as well as their business associates risk increased exposure under HIPAA and state laws, including negligence, invasion of privacy and state privacy claims.
Republicans scored historic victories in Tuesday night’s midterm elections, retaking the Senate majority for the first time since 2006 by adding at least seven seats and possibly as many as 10. The GOP increased its majority in the House of Representatives by at least 13 seats (with some races still undecided), achieving the largest House Republican majority since the Hoover Administration. And Republicans added three more governors to their ranks.
California has been experiencing a wave of putative class actions under the California Invasion of Privacy Act (“CIPA”). A decision this week by a federal court judge in California could halt new case filings and lay the groundwork for the dismissal of pending actions.
Consumer class actions under California’s Song-Beverly Credit Card Act have been shaped by significant case law developments over the last few years. Friday’s Ninth Circuit decision in Sinibaldi v. Redbox is a decisive victory for retailers of rented goods which will allow them wide latitude to collect personal information, such as zip codes, when using credit cards as a form of security.
The new year will ring in significant privacy, data protection and cybersecurity changes in the U.S., Europe, Asia and elsewhere around the world. Below are some key developments and possible concrete action items for General Counsels, Chief Privacy Officers and Chief Information Officers:
On January 1, 2004, a bill recently signed by Governor Gray Davis will take effect that has been hailed by many as the toughest anti-spamming law in the nation. With narrow exceptions, the bill, SB 186, prevents marketers and advertisers from sending unsolicited email advertisements from California, regardless of whether the recipient is located in or outside the state. Targeting marketers and advertisers located outside California, SB 186 also prohibits sending unsolicited commercial email advertisements to a California email address. However, as explained below, SB 186 may well eventually be superseded by impending federal legislation.
The recent release of new guidelines on responding to computer security breaches offer important guidance for all companies with valuable electronic information. On October 10, 2003, the Office of Privacy Protection within the State of California’s Department of Consumer Affairs issued its “Recommended Practices on Notification of Security Breach Involving Personal Information.” The Office of Privacy Protection is tasked with recommending policies and practices that protect California consumers’ privacy.
In a recent case of first impression, the California Supreme Court unanimously held a trial court’s preliminary injunction preventing publication of a computer program for descrambling digital video disks did not violate the defendant’s free speech rights, assuming the trial court properly issued the injunction under California’s trade secret law. In its August 25, 2003 decision in DVD Copy Control Assoc., Inc. v. Andrew Bunner, the Court resolved an apparent conflict between the free speech clauses of the United States and California Constitutions and California’s trade secret laws. This decision is significant because it is one of the first in the country to deal with the interplay between the free speech rights of parties who wish to publish technical information on the Internet and the property rights of parties who claim trade secret ownership in such information.