Alabama has joined the “crazy quilt” of state data breach notification laws with the governor’s signature of the Alabama Data Breach Notification Act of 2018.

Things to take note of under the Alabama law:

  • The law requires entities to “implement and maintain reasonable security measures” and includes a granular list of what such security measures should include.   An interesting component of reasonable security measures is “keeping the management of the covered entity, including its board of directors, if any, appropriately informed of the overall status of its security measures.”
  • Notification to residents within 45 days after a breach has been discovered if it is reasonably likely to cause substantial harm.
  • The definition of “personal information” is expanded to include health information and user name or email address in combination with a password.
  • Notice to the Alabama Attorney General if notice is provided to more than 1,000 individuals at a single time.
  • No private right of action, but the AG may enforce violations of the Act as a deceptive trade practice.
  • The Act provides for civil penalties of not more than $5,000 per day for each consecutive day that a covered entity fails to take action to comply with notice provisions.  “Knowing” violations of the Act (including a “reckless disregard in failing to comply with notice requirements”) could subject a covered entity to civil penalties of up to $500,000 per breach.

 

 

 

 

 

 

Only one U.S. state without a data breach notification law, that is.

South Dakota as become the 49th state to enact a data breach notification law, which take effect on July 1.    The South Dakota law follows the pattern of the most recent notification laws, including an expansive definition of “Personal Information”.

The law defines personal information as a person’s first name/first initial and last name in combination with any one or more of the following:

  1. Social Security Number;
  2. Driver’s license number or other unique identification number created or collected by a government body;
  3. Account, credit or debit card number, in combination with any required security code, access code, password, routing number, PIN, or any additional information that would permit access to a person’s financial account;
  4. Health information;
  5. Identification number assigned to a person by the person’s employer in combination with any required security code, access code, password, or biometric data generated from measurements or analysis of human body characteristics for authentication purposes.

There is an additional definition of “protected information” that includes (a) a username or email address in combination with a password, security question answer, or other information that permits access to an online account; and (b) account number or credit/debit card number, in combination with any required security code, access code, or password that permits access to a person’s financial account.   The definition of “protected information” does not include a person’s name.

Again, South Dakota includes an encryption “safe harbor,” but does require notification if the encryption key is compromised.   Notice to the South Dakota Attorney General is required in any breach that exceeds 250 South Dakota residents.

Notification is required within 60 days of the discovery of the breach.  A violation of the notification law is considered a deceptive act under South Dakota consumer protection laws, and the Attorney General has noted that this violation has the effect of creating a private right of action.   The AG is also authorized to enforce the law and may impose a fine of up to $10,000 per day, per violation.

Alabama remains the sole U.S. state without a breach notification law, but the Alabama Data Breach Notification Act of 2018 passed the Alabama House unanimously and is now in the state Senate.

A update to the Mintz Matrix will be forthcoming this week with further details on this new South Dakota law, as well as some amendments to existing laws.  Watch this space.

 

 

The Supreme Court on Tuesday will hear arguments in United States v. Microsoft Corp., in which the court will decide whether a US technology service provider, Microsoft, must obey a search warrant for data stored in a foreign country. “It’s going to set the tone for cross-border data demands on a global scale,” said Gregory Nojeim, senior counsel and director of the Freedom, Security, and Technology Project at the Center for Democracy & Technology.    All briefs and other documents are catalogued here at SCOTUSBlog.   We’ll be watching …..

CNNMoney (2/25)

Happy 2018.  You may notice a new widget in the right sidebar of our home page.  Now you have a reminder as to just how close we are to the GDPR D-Day.    GDPR is real.   GDPR is here.

To brush up on your GDPR, or to help you get moving in the right direction, here is a link to all of the content from our 2017 GDPR webinar series.   Each edition includes a link to the recording and slides.   We will continue to produce targeted content throughout 2018, so stay tuned.

 

Biometric data is a hotbed of activity these days.  We’ve discussed the frenetic pace at which class actions are being filed in Illinois under the Biometric Information Privacy Act.   Today, Brian Lam wrote in our sister blog, Sports Law Matters, about the issues surrounding the increasing use of biometric data in sports to track just about everything.

Read the article here.

 

Athletes and their Biometric Data – Who Owns It and How It Can Be Used

The National Association of Insurance Commissioners (NAIC) has approved its draft of the Insurance Data Security Model Law (Model Law) via a meeting of its Executive and Plenary Committees.  This important development follows New York Department of Financial Services (“DFS”) Cybersecurity Requirements for Financial Services Companies regulation that took effect on March 1, 2017 (DFS Cybersecurity Regulation) that we have covered previously.

NAIC likely recognizes that the numerous data breaches that have occurred over the past year have created an opportunity to build upon the momentum created by the DFS Cybersecurity Regulation, and provide an environment of comprehensive compliance requirements to protect Licensees and Consumers.  Indeed, the Model Law even contains Drafting Note stating that:

The drafters of this Act intend that if a Licensee, as defined in Section 3, is in compliance with N.Y. Comp. Codes R. & Regs. tit.23, § 500, Cybersecurity Requirements for Financial Services Companies, effective March 1, 2017, such Licensee is also in compliance with this Act.

In many cases, model laws approved by NAIC, a U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories, are approved within these jurisdictions as binding law.  Below is a high level overview of particularly salient points of the Model Law. Continue Reading Insurance Commissioners Approve Data Security Model Law

Since last September, the Mintz Levin Privacy Webinar Series has focused on the upcoming EU General Data Protection Regulation (GDPR) to help businesses understand the reach and scope of the GDPR and prepare for the potentially game-changing privacy regulation. The GDPR will affect how US businesses handle and process personal data originating in the EU and may require changes to business process.

EU Data Protection GDPR for Life Sciences (3/14/2018)

This webinar, the ninth in our EU General Data Protection Regulation Series, focuses on topics that are vital to life sciences companies seeking to come into compliance, including handling clinical study data, other scientific research, CRO and other contractor agreements, and transferring personal data outside of the EU.

Getting Your Contracts Ready for GDPR (11/16/2017)

This webinar, the eighth in our EU General Data Protection Regulation Series, reviews the GDPR’s express contract requirements and discusses additional matters that you may want to address in your contracts.

Handling Human Resources Data Under Privacy Shield and the GDPR (10/5/2017)

This webinar, the seventh in our EU General Data Protection Regulation Series, reviews current options for transferring personal data, including under Privacy Shield, and previews the new landscape under GDPR.

Access, Correction and Erasure: How to Minimize the Burden (2/16/2017)

This webinar, the sixth in our EU General Data Protection Regulation Series, considers companies’ obligations to give individuals access to their data and to correct or erase it.  We explore the new data portability requirements. The webinar concludes with some suggestions on how to make these requirements less burdensome.

Transferring Data from the EU (1/12/2017)

This webinar, the fifth in our EU General Data Protection Regulation Series, explores the ways in which the Regulation creates new avenues for data transfers, and narrows others. In particular, we consider sector-specific Commission decisions, privacy seals/certifications, the exception for non-repetitive, limited transfers, and the outlook for BCRs and Model Clauses.

Data Protection Officers: Do You Need One? (12/15/2016)

This webinar, the fourth in our EU General Data Protection Regulation Series, examines the criteria that dictate whether or not your organization needs to appoint a Data Protection Officer. We discuss the role of the DPO, the significance of the “independence” requirement, and the qualifications required to hold the position.

Good-bye to the Cure-all: The New Rules on Consent (11/10/2016)

This webinar, the third in our EU General Data Protection Regulation Series, reviews the new restrictions on relying on user consent to data processing and data transfers. In addition to the general “imbalance of power” problem, we consider the implications of the Directive on unfair terms in consumer contracts and changes that may need to be made to terms of use and privacy policies when dealing with consumers.

Accountability, Data Security, Data Impact Assessments and Breach Notification Requirements (10/13/2016)

This webinar, the second in our EU General Data Protection Regulation Series, focuses on the data security and accountability requirements of the Regulation, including reviews and documentation of internal policies and procedures and data impact assessments. We also explore the breach notification requirements and actions that companies can take in advance to mitigate the need for breach notification.

One-Stop Shopping Mall? The New Regulatory Structure (9/14/2016)

This webinar, the first in our EU General Data Protection Regulation Series, explains the powers and role of the new European Data Protection Board, how a “lead supervisory authority” will be designated for each controller, and how the lead supervisory authority will interact with other interested supervisory authorities. We also look at the complaint process from the point of view of the individual who is claiming a violation, and explore the likely role that will be played by public interest organizations bringing group complaints.

 

Recently proposed legislation in Ohio could provide businesses with special protection from lawsuits in the event of a hack under certain circumstances. Senate Bill 220 would shelter businesses that have been proactive in instituting defenses to guard against data breaches. The idea is to encourage firms to voluntarily enact privacy protections by promising them the ability to later claim an affirmative defense in court should a hack still occur.

Other states already require businesses to meet specific standards with regard to providing cyber security protections and preventing data breaches. In New York, businesses licensed by the Department of Financial Services (DFS) must meet compliance standards in accordance with DFS cybersecurity regulations. These standards require licensees to have a written cybersecurity program in place, maintain a cybersecurity policy that covers 14 regulation-specific areas, designate a qualified employee as a Chief Information Security Officer, and implement an incident response plan, among additional imperatives. Similarly, states differ with regard to their requirements of businesses in providing data breach notices. For example, in Massachusetts, notices must be provided to the affected resident, the Attorney General’s office, and to the Office of Consumer Affairs and Business Regulation (OCABR).

Ohio’s Senate Bill 220 is interesting in that it does not lay out a minimum set of standards that, if not met, could serve as grounds for litigation in the event of a breach. Businesses will be tasked with instituting their own cybersecurity programs using one of eight industry-specific frameworks developed by the National Institute of Standards and Technology. The legislation provides for an evolving standard, which means lawmakers won’t have to continually revisit the issue to update a minimum set of standards. Whether or not a business qualifies for the safe harbor provision will be up to a judge to determine if such business has met its burden. Ultimately, the key takeaway is that this new legislation will provide for compliance as an affirmative defense for businesses facing a lawsuit as a result of a data breach.

The Mintz Levin team will continue to monitor this pending legislation and update our readers as it develops.