Privacy & Information Security Law Blog

On October 11, 2019, California Governor Gavin Newsom signed into law AB 1130, which expands the types of personal information covered by California’s breach notification law to include, when compromised in combination with an individual’s name: (1) additional government identifiers, such as tax identification number, passport number, military identification number, or other unique identification number issued on a government document commonly used to verify the identity of a specific individual; and (2) biometric data generated from measurements or technical analysis of human body characteristics (e.g., fingerprint, retina, or iris image) used to authenticate a specific individual. Biometric data does not include a physical or digital photograph unless used or stored for facial recognition purposes.

On October 11, 2019, California Governor Gavin Newsom announced that he signed all five of the California Legislature’s September 2019 amendments to the California Consumer Privacy Act of 2018 (“CCPA”) into law: AB-25, AB-874, AB-1146, AB-1355 and AB-1564. The Governor had until October 13, 2019, to sign or veto the amendments, which were passed at the end of the Legislature’s 2019 legislative session. This news came just a day after California Attorney General Xavier Becerra released proposed regulations implementing the CCPA.

On October 10, 2019, the California Attorney General (“AG”) announced Proposed Regulations implementing the California Consumer Privacy Act of 2018 (“CCPA”). Along with a Notice of Proposed Rulemaking Action and the Text of Proposed Regulations, the AG issued an Initial Statement of Reasons elaborating on the purposes of the proposed regulations.

On July 25, 2019, New York Governor Andrew Cuomo signed into law Senate Bill S5575B (the “Bill”), an amendment to New York’s breach notification law (the “Act”). The Bill expands the Act’s definition of “breach of the security of the system” and the types of information (i.e., “private information”) covered by the Act, and makes certain changes to the Act’s requirements for breach notification.

On July 11, 2019, Washington Attorney General Bob Ferguson announced that his office had entered into a consent decree and $10 million settlement with Premera Blue Cross (“Premera”) that stems from a 2014-2015 breach that affected more than 11 million individuals. The settlement, which includes a payment of roughly $5.4 million to Washington state and $4.6 million to a coalition of 29 other state Attorneys General (the “Multistate AGs”), is one of the largest ever for a breach involving protected health information (“PHI”) and comes just one month after another notable HIPAA settlement involving a similar coalition of state AGs.

Today marks one year since the California Consumer Privacy Act of 2018 (“CCPA”) was passed and signed into law. The CCPA signals a dramatic shift in the data privacy regime in the United States, imposing on covered businesses the most prescriptive general privacy rules in the nation. In addition, the past year has seen a legislative explosion in the form of similar proposed state laws and potential federal data privacy legislation.

Texas Governor Greg Abbott recently signed into law HB 4390 (the “Bill”), which amends the state’s data breach notification law and creates an advisory council tasked with studying and developing recommendations regarding data privacy legislation.

Arizona Attorney General Mark Brnovich recently announced a settlement with healthcare software provider Medical Informatics Engineering Inc. (“MIE”) and its wholly owned subsidiary NoMoreClipboard, LLC. The settlement resolves a multistate litigation arising out of a May 2015 data breach in which hackers infiltrated WebChart, a web application run by MIE, and stole the electronic Protected Health Information (“ePHI”) of over 3.9 million individuals. Arizona and 15 other states (the “Multistate AGs”) filed the suit in December 2018, asserting claims under the federal Health Insurance Portability and Accountability (“HIPAA”) as well as various applicable state data protection laws. Notably, the lawsuit was the first-ever multistate litigation alleging claims under HIPAA.

Maryland Governor Larry Hogan recently signed into law House Bill 1154 (the “Bill”), which amends the state’s data breach notification law. Among other obligations, the amendments expand the required actions a business must take after becoming aware of a data security breach.

On May 24, 2019, Oregon Governor Kate Brown signed Senate Bill 684 (the “Bill”) into law. The Bill, which takes effect January 1, 2020, amends the Oregon Consumer Identity Theft Protection Act (“OCITPA”) by enhancing the breach notification requirements applicable to third-party vendors.

On May 27, 2019, the Illinois General Assembly voted 79-32 to approve Senate Bill 1624, an amendment to the Personal Information Protection Act (“PIPA”). The bill’s sponsor, Senator Suzy Glowiak (D), expects Illinois Governor J.B. Pritzker (D) to sign the bill into law in short order. The amendment had already unanimously passed the state Senate last month.

On May 29, 2019, Nevada’s governor approved SB 220 (the “Amendment Bill”), which provides amendments to an existing law that requires operators of websites and online services (“Operators”) to post a notice on their website regarding their privacy practices. The Amendment Bill will require Operators to establish a designated request address through which a consumer may submit a verified request directing the Operator not to make any “sale” of covered information collected about the consumer. Pursuant to the Amendment Bill, Operators must respond to a verified opt-out request within 60 days of receipt.

On May 16, 2019, the California State Senate Appropriations Committee did not approve SB 561, a bill that would have amended the California Consumer Privacy Act (“CCPA”) to expand the private right of action to permit consumers to sue for any violations of the CCPA. The Committee’s decision to hold the bill means it will not pass out of the Senate this session.

As reported by Bloomberg Law, on May 7, 2019, Washington State Governor Jay Inslee signed a bill (HB 1071) amending Washington’s data breach notification law. The new requirements include the following:

• Expanded Definition of Personal Information. HB 1071 expands the definition of “personal information.” Washington’s breach notification law previously defined personal information as an individual’s name in combination with the individual’s Social Security number, state identification card number, or financial account or credit or debit card number in combination with any required security code, access code or password that would permit access to an individual’s financial account. HB 1071 adds the following data elements to the definition, when compromised in combination with an individual’s name:
  • full date of birth;
  • private key that is unique to an individual and that is used to authenticate or sign an electronic record;
  • student, military or passport identification number;
  • health insurance policy number or health insurance identification number;
  • any information about a consumer’s medical history or mental or physical condition or about a health care professional’s medical diagnosis or treatment of the consumer; or
  • biometric data generated by automatic measurements of an individual’s biological characteristics such as a fingerprint, voiceprint, eye retinas, irises or other unique biological patterns or characteristics that is used to identify a specific individual.

In late April, the California state legislature’s Privacy and Consumer Protection Committee held hearings on nine bills that seek to refine the California Consumer Privacy Act of 2018 (“CCPA”) by clarifying the legislation and limiting its scope. Eight bills advanced to the Assembly Appropriations Committee; the ninth is non-fiscal and will next be heard by the full Assembly. Last week, the California Assembly Appropriations Committee approved three of the bills. These bills, now on the Assembly’s “Consent Calendar,” will be heard this week. The Appropriations Committee will hold hearings on the other five bills in the next two weeks.

From the Assembly’s Appropriations Committee, bills must go through the full Assembly, the California Senate and the California governor to be enacted as law.

On April 22, 2019, Washington state legislators voted to send HB 1071 (the “Bill”) to Governor Jay Inslee for consideration. The Bill was requested by Attorney General Ferguson and would strengthen Washington’s data breach law. The request to amend the current law followed Attorney General Ferguson’s third annual Data Breach Report, which found that data breaches affected nearly 3.4 million Washingtonians between July 2017 and July 2018.

On April 12, 2019, Senator Edward J. Markey (MA) introduced the Privacy Bill of Rights Act (the “Act”), comprehensive privacy legislation intended to protect individuals’ “personal information,” defined as “information that directly or indirectly identifies, relates to, describes, is capable of being associated with, or could reasonably be linked to, a particular individual.” This definition is substantially similar to the definition of “personal information” contained in the California Consumer Privacy Act of 2018. The Act also includes an enumerated list of examples that constitute “personal information” and specifically excludes certain publicly available information from the term.

On February 22, 2019, California state senator Hannah Beth-Jackson introduced a bill (SB-561) that would amend the California Consumer Privacy Act of 2018 (“CCPA”) to expand the Act’s private right of action and remove the 30-day cure period requirement for enforcement actions brought by the State Attorney General. The bill would not change the compliance deadline for the CCPA, which remains January 1, 2020. California Attorney General Xavier Becerra supports the amendment bill, characterizing it as “a critical measure to strengthen and clarify the CCPA.”

As we previously reported, the California Consumer Privacy Act of 2018 (“CCPA”) delays the California Attorney General’s enforcement of the CCPA until six months after publication of the Attorney General’s implementing regulations, or July 1, 2020, whichever comes first. The California Department of Justice anticipates publishing a Notice of Proposed Regulatory Action concerning the CCPA in Fall 2019.

The California Department of Justice will host six public forums on the California Consumer Privacy Act of 2018 (“CCPA”) to provide the general public an opportunity to participate in the CCPA rulemaking process. Individuals may attend or speak at the events or submit written comments by email to privacyregulations@doj.ca.gov or by mail to the California Department of Justice, ATTN: Privacy Regulations Coordinator, 300 S. Spring St., Los Angeles, CA 90013.

On December 4, 2018, the New York Attorney General (“NY AG”) announced that Oath Inc., which was known as AOL Inc. (“AOL”) until June 2017 and is a subsidiary of Verizon Communications Inc., agreed to pay New York a $4.95 million civil penalty following allegations that it had violated the Children’s Online Privacy Protection Act (“COPPA”) by collecting and disclosing children’s personal information in conducting online auctions for advertising placement. This is the largest-ever COPPA penalty.

On October 30, 2018, ATA Consulting LLC (doing business as Best Medical Transcription) agreed to a $200,000 settlement with the New Jersey Attorney General resulting from a server misconfiguration that allowed private medical records to be posted publicly online. The fine was suspended to $31,000 based on the company’s financial condition. Read the settlement.

On September 26, 2018, Uber Technologies Inc. (“Uber”) agreed to a settlement (the “Settlement”) with all 50 U.S. state attorneys general (the “Attorneys General”) in connection with a 2016 data breach affecting the personal information (including driver’s license numbers) of approximately 607,000 Uber drivers nationwide, as well as approximately 57 million consumers’ email addresses and phone numbers. The Attorneys General alleged that after Uber learned of the breach, which occurred in November 2016, the company paid intruders a $100,000 ransom to delete the data. The Attorneys General alleged that Uber failed to promptly notify affected individuals of the incident, as required under various state laws, instead notifying affected customers and drivers of the breach one year later in November 2017. 

On September 23, 2018, California Governor Jerry Brown signed into law SB-1121 (the “Bill”), which makes limited substantive and technical amendments to the California Consumer Privacy Act of 2018 (“CCPA”). The Bill takes effect immediately,  and delays the California Attorney General’s enforcement of the CCPA until six months after publication of the Attorney General’s implementing regulations, or July 1, 2020, whichever comes first. 

On September 7, 2018, the New Jersey Attorney General announced a settlement with data management software developer Lightyear Dealer Technologies, LLC, doing business as DealerBuilt, resolving an investigation by the state Division of Consumer Affairs into a data breach that exposed the personal information of car dealership customers in New Jersey and across the country. The breach occurred in 2016, when a researcher exposed a gap in the company’s security and gained access to unencrypted files containing names, addresses, social security numbers, driver’s license numbers, bank account information and other data belonging to thousands of individuals, including at least 2,471 New Jersey residents.

On August 22, 2018, California Attorney General Xavier Becerra raised significant concerns regarding the recently enacted California Consumer Privacy Act of 2018 (“CCPA”) in a letter addressed to the CCPA’s sponsors, Assemblyman Ed Chau and Senator Robert Hertzberg. Writing to “reemphasize what [he] expressed previously to [them] and [state] legislative leaders and Governor Brown,” Attorney General Becerra highlighted what he described as five primary flaws that, if unresolved, will undermine the intention behind and effective enforcement of the CCPA.

As reported in BNA Privacy Law Watch, a California legislative proposal would allocate additional resources to the California Attorney General’s office to facilitate the development of regulations required under the recently enacted California Consumer Privacy Act of 2018 (“CCPA”). CCPA was enacted in June 2018 and takes effect January 1, 2020. CCPA requires the California Attorney General to issue certain regulations prior to the effective date, including, among others, (1) to update the categories of data that constitute “personal information” under CCPA ...

On August 3, 2018, California-based Unixiz Inc. (“Unixiz”) agreed to shut down its “i-Dressup” website pursuant to a consent order with the New Jersey Attorney General, which the company entered into to settle charges that it violated the Children’s Online Privacy Protection Act (“COPPA”) and the New Jersey Consumer Fraud Act. The consent order also requires Unixiz to pay a civil penalty of $98,618.

As reported in BNA Privacy Law Watch, on June 27, 2018, Equifax entered into a consent order (the “Order”) with 8 state banking regulators (the “Multi-State Regulatory Agencies”), including those in New York and California, arising from the company’s 2017 data breach that exposed the personal information of 143 million consumers.

On June 28, 2018, the Governor of California signed AB 375, the California Consumer Privacy Act of 2018 (the “Act”). The Act introduces key privacy requirements for businesses, and was passed quickly by California lawmakers in an effort to remove a ballot initiative of the same name from the November 6, 2018, statewide ballot. We previously reported on the relevant ballot initiative. The Act will take effect January 1, 2020.

On June 21, 2018, California lawmakers introduced AB 375, the California Consumer Privacy Act of 2018 (the “Bill”). If enacted and signed by the Governor by June 28, 2018, the Bill would introduce key privacy requirements for businesses, but would also result in the removal of a ballot initiative of the same name from the November 6, 2018, statewide ballot. We previously reported on the relevant ballot initiative.

On November 6, 2018, California voters will consider a ballot initiative called the California Consumer Privacy Act (“the Act”). The Act is designed to give California residents (i.e., “consumers”) the right to request from businesses (see “Applicability” below) the categories of personal information the business has sold or disclosed to third parties, with some exceptions. The Act would also require businesses to disclose in their privacy notices consumers’ rights under the Act, as well as how consumers may opt out of the sale of their personal information if the business sells consumer personal information.

Recently, Colorado’s governor signed into law House Bill 18-1128 “concerning strengthening protections for consumer data privacy” (the “Bill”), which takes effect September 1, 2018. Among other provisions, the Bill (1) amends the state’s data breach notification law to require notice to affected Colorado residents and the Colorado Attorney General within 30 days of determining that a security breach occurred, imposes content requirements for the notice to residents and expands the definition of personal information; (2) establishes data security requirements applicable to businesses and their third-party service providers; and (3) amends the state’s law regarding disposal of personal identifying information.

Recently, Vermont enacted legislation (H.764) that regulates data brokers who buy and sell personal information. Vermont is the first state in the nation to enact this type of legislation.

• Definition of Data Broker. The law defines a “data broker” broadly as “a business, or unit or units of a business, separately or together, that knowingly collects and sells or licenses to third parties the brokered personal information of a consumer with whom the business does not have a direct relationship.”
• Definition of “Brokered Personal Information.” “Brokered personal ...

Recently, Louisiana amended its Database Security Breach Notification Law (the “amended law”). Notably, the amended law (1) amends the state’s data breach notification law to expand the definition of personal information and requires notice to affected Louisiana residents within 60 days, and (2) imposes data security and destruction requirements on covered entities. The amended law goes into effect on August 1, 2018.

On June 2, 2018, Oregon’s amended data breach notification law (“the amended law”) went into effect. Among other changes, the amended law broadens the applicability of breach notification requirements, prohibits fees for security freezes and related services provided to consumers in the wake of a breach and adds a specific notification timing requirement.

On April 11, 2018, Arizona amended its data breach notification law (the “amended law”). The amended law will require persons, companies and government agencies doing business in the state to notify affected individuals within 45 days of determining that a breach has resulted in or is reasonably likely to result in substantial economic loss to affected individuals. The old law only required notification “in the most expedient manner possible and without unreasonable delay.” The amended law also broadens the definition of personal information and requires regulatory notice and notice to the consumer reporting agencies (“CRAs”) under certain circumstances.

As reported in BNA Privacy Law Watch, on March 21, 2018, South Dakota enacted the state’s first data breach notification law. The law will take effect on July 1, 2018, and includes several key provisions:

On January 23, 2018, the New York Attorney General announced that Aetna Inc. (“Aetna”) agreed to pay $1.15 million and enhance its privacy practices following an investigation alleging it risked revealing the HIV status of 2,460 New York residents by mailing them information in transparent window envelopes. In July 2017, Aetna sent HIV patients information on how to fill their prescriptions using envelopes with large clear plastic windows, through which patient names, addresses, claims numbers and medication instructions were visible. Through this, the HIV status of some patients was visible to third parties. The letters were sent to notify members of a class action lawsuit that, pursuant to that suit’s resolution, they could purchase HIV medications at physical pharmacy locations, rather than via mail order delivery.

On October 31, 2017, the New York and Vermont Attorneys General (“Attorneys General”) announced a settlement with Hilton Domestic Operating Company, Inc., formerly known as Hilton Worldwide, Inc. (“Hilton”), to settle allegations that the company lacked reasonable data security and waited too long to report a pair of 2015 data breaches, which exposed over 350,000 credit card numbers. The Attorneys General alleged that Hilton failed to maintain reasonable data security and waited more than nine months after the first incident to notify consumers of the breaches, in violation of the states' consumer protection and breach notification laws.

On September 29, 2017, Samanage USA, Inc. (“Samanage”), a North Carolina-based technology company that provided cloud-based IT support services as a subcontractor for Vermont’s health care exchange (“Vermont Health Connect”), agreed to a $264,000 settlement with the Vermont Attorney General in relation to a breach that exposed the Social Security numbers of 660 Vermont Health Connect users.

On September 5, 2017, the FTC announced that Lenovo, Inc. (“Lenovo”) agreed to settle charges that its preloaded software on some laptop computers compromised online security protections in order to deliver advertisements to consumers. The settlement agreement (the “Settlement”) is between Lenovo, the FTC and 32 State Attorneys General. 

Recently, Virginia passed an amendment to its data breach notification law that adds state income tax information to the types of data that require notification to the Virginia Office of the Attorney General in the event of unauthorized access and acquisition of such data. Under the amended law, an employer or payroll service provider must notify the Virginia Office of the Attorney General after the discovery or notification of unauthorized access and acquisition of unencrypted and unredacted computerized data containing a Virginia resident’s taxpayer identification number in combination with the income tax withheld for that taxpayer. 

On November 7, 2016, Adobe Systems Inc. (“Adobe”) entered into an assurance of voluntary compliance (“AVC”) with 15 state attorneys general to settle allegations that the company lacked proper measures to protect its systems from a 2013 cyber attack that resulted in the theft of the personal information of millions of customers. Under the terms of the AVC, Adobe must pay $1 million to the attorneys general and implement new data security policies and practices.

On October 14, 2016, California Attorney General Kamala D. Harris announced the release of a publicly available online form that will enable consumers to report potential violations of the California Online Privacy Protection Act (“CalOPPA”). CalOPPA requires website and mobile app operators to post a privacy policy that contains certain specific content.

On February 16, 2016, California Attorney General Kamala D. Harris released the California Data Breach Report 2012-2015 (the “Report”) which, among other things, provides (1) an overview of businesses’ responsibilities regarding protecting personal information and reporting data breaches and (2) a series of recommendations for businesses and state policy makers to follow to help safeguard personal information.

On December 15, 2015, the California Attorney General announced an approximately $25 million settlement with Comcast Cable Communications, LLC (“Comcast”) stemming from allegations that Comcast disposed of electronic equipment (1) without properly deleting customer information from the equipment and (2) in landfills that are not authorized to accept electronic equipment. The settlement must be approved by a California judge before it is finalized.

On December 17, 2015, the Federal Trade Commission announced that LifeLock, Inc. (“LifeLock”) has agreed to pay $100 million to settle contempt charges for deceptive advertising. According to the FTC, “[t]his is the largest monetary award obtained by the Commission in an order enforcement action.” Under the terms of the settlement, $68 million of the settlement amount will be paid to class action consumers who were injured by the identity theft protection company’s violation of a 2010 settlement with the FTC that required LifeLock to protect consumer information. The rest of the money will be used for settlements with state attorneys general, and any remaining money will go to the FTC. The case is Federal Trade Commission v. LifeLock Inc., et al. (2:10-cv-00530), in the U.S. District Court for the District of Arizona.

On October 2, 2015, California Attorney General Kamala D. Harris announced that her office settled a lawsuit against home design website, Houzz Inc. (“Houzz”). Houzz was charged with secretly recording incoming and outgoing telephone calls for training and quality assurance purposes without notifying its customers, employees or call recipients, in violation of California eavesdropping and wiretapping laws. As part of the settlement, the Attorney General required Houzz to destroy the recordings, pay a fine of $175,000 and hire a Chief Privacy Officer to supervise its compliance with privacy laws and conduct privacy risk evaluations to assess Houzz’s privacy practices. This is the first time that the Attorney General has required the hiring of a Chief Privacy Officer as part of a settlement.

On July 1, 2015, Connecticut’s governor signed into law Public Act No. 15-142, An Act Improving Data Security and Agency Effectiveness (the “Act”), that (1) amends the state’s data breach notification law to require notice to affected individuals and the Connecticut Attorney General within 90 days of a security breach and expands the definition of personal information to include biometric data such as fingerprints, retina scans and voice prints; (2) affirmatively requires all businesses, including health insurers, who experience data breaches to offer one year of identity theft prevention services to affected individuals at no cost to them; and (3) requires health insurers and contractors who receive personal information from state agencies to implement and maintain minimum data security safeguards. With the passing of the Act, Connecticut becomes the first state to affirmatively require businesses to provide these security services to consumers.

On April 13, 2015, the Senate of Washington State unanimously passed legislation strengthening the state’s data breach law. The bill (HB 1078) passed the Senate by a 47-0 vote, and as we previously reported, passed the House by a 97-0 vote.

On March 4, 2015, the House of Representatives of Washington passed a bill (HB 1078), which would amend the state’s breach notification law to require notification to the state Attorney General in the event of a breach and impose a 45-day timing requirement for notification provided to affected residents and the state regulator. The bill also mandates content requirements for notices to affected residents, including (1) the name and contact information of the reporting business; (2) a list of the types of personal information subject to the breach; and (3) the toll-free telephone numbers and address of the consumer reporting agencies. In addition, while Washington’s breach notification law currently applies only to “computerized” data, the amended law would cover hard-copy data as well.

On February 27, 2015, the White House released a highly-anticipated draft of the Consumer Privacy Bill of Rights Act of 2015 (the “Act”) that seeks to establish baseline protections for individual privacy in the commercial context and to facilitate the implementation of these protections through enforceable codes of conduct. The Federal Trade Commission is tasked with the primary responsibility for promulgating regulations and enforcing the rights and obligations set forth in the Act.

On February 23, 2015, the Wyoming Senate approved a bill (S.F.36) that adds several data elements to the definition of “personal identifying information” in the state’s data breach notification statute. The amended definition will expand Wyoming’s breach notification law to cover certain online account access credentials, unique biometric data, health insurance information, medical information, birth and marriage certificates, certain shared secrets or security tokens used for authentication purposes, and individual taxpayer identification numbers. The Wyoming Senate also agreed with amendments proposed by the Wyoming House of Representatives to another bill (S.F.35) that adds content requirements to the notice that breached entities must send to affected Wyoming residents. Both bills are now headed to the Wyoming Governor Matt Mead for signing.

On January 21, 2015, the Federal Trade Commission announced that the U.S. District Court for the Central District of Illinois granted partial summary judgment on December 12, 2014, to the federal government in its action against Dish Network LLC (“Dish”), alleging that Dish violated certain aspects of the Telemarketing Sales Rule (“TSR”) that restrict placing calls to numbers on the National Do-Not-Call Registry and an entity’s internal Do-Not-Call list. The federal government is joined in the action against Dish by four state attorneys general alleging violations of the Telephone Consumer Protection Act and certain state laws related to telemarketing.

On December 18, 2014, the Financial Crimes Enforcement Network (“FinCEN”) issued a $1 million civil penalty against Thomas E. Haider, the former Chief Compliance Officer of MoneyGram International, Inc. (“MoneyGram”). In a press release announcing the assessment, FinCEN alleged that during Haider’s oversight of compliance for MoneyGram, he failed to adequately respond to thousands of customer complaints regarding schemes that utilized MoneyGram to defraud consumers. In coordination with FinCEN, the U.S. Attorney’s office in the Southern District of New York filed a civil complaint on the same day, seeking a $1 million civil judgment against Haider to collect on the assessment and requesting injunctive relief barring him from participating in the affairs of any financial institution located or conducting business in the United States.

On November 21, 2014, Massachusetts Attorney General Martha Coakley announced that Boston hospital Beth Israel Deaconess Medical Center (“BIDMC”) has agreed to pay a total of $100,000 to settle charges related to a data breach that affected the personal and protected health information of nearly 4,000 patients and employees.

On October 28, 2014, California Attorney General Kamala D. Harris announced the release of the second annual California Data Breach Report. The report provides information on data breaches reported to California’s Attorney General in 2012 and 2013. Overall, 167 breaches were reported by 136 different entities to California’s Attorney General in 2013. According to the report, 18.5 million records of California residents were compromised by these reported breaches, up more than 600 percent from the 2.6 million records compromised in 2012. In addition, the number of reported data breaches increased by 28 percent in 2013, rising from 131 in 2012 to 167 in 2013.

On October 10, 2014, TD Bank, N.A. entered into an assurance of voluntary compliance (“Assurance”) with a multistate group of nine attorneys general to settle allegations that the company violated state consumer protection and personal information safeguards laws in connection with a 2012 data breach. The breach involved the loss of two unencrypted backup tapes containing the personal information of approximately 260,000 customers. The Assurance requires TD Bank to pay $850,000 to the attorneys general.

On October 14, 2014, rent-to-own retailer Aaron’s, Inc. (“Aaron’s”) entered into a $28.4 million settlement with the California Office of the California Attorney General related to charges that the company permitted its franchised stores to unlawfully monitor their customers’ leased laptops.

On September 8, Vermont Attorney General William Sorrell announced that SEI/Aaron’s, Inc. has entered into an assurance of discontinuance, which includes $51,000 in total fines, to settle charges over the company’s remote monitoring of its customers’ leased laptops. The settlement stems from charges accusing SEI/Aaron’s, an Atlanta-based franchise of the national rent-to-own retailer Aaron’s, Inc., of unlawfully using surveillance software on its leased laptops to assist the company in the collection of its customers’ overdue rental payments. The Vermont Office of the Attorney General claimed that such remote monitoring of the laptop users’ online activities in connection with debt collection constituted an unfair practice in violation of the Vermont Consumer Protection Act.

On July 1, 2014, Delaware Governor Jack Markell signed into law a bill that creates new safe destruction requirements for the disposal of business records containing consumer personal information. The new law requires commercial entities conducting business in Delaware to take reasonable steps to destroy their consumers’ “personal identifying information” prior to the disposal of electronic or paper records. The law will take effect on January 1, 2015.

On April 10, 2014, Kentucky Governor Steve Beshear signed into law a data breach notification statute requiring persons and entities conducting business in Kentucky to notify individuals whose personally identifiable information was compromised in certain circumstances. The law will take effect on July 14, 2014.

On November 13, 2013, Google entered into a $17 million settlement agreement with the attorneys general from 37 states and the District of Columbia related to allegations that the company bypassed users’ cookie-blocking settings on Apple’s Safari browser in 2011 and 2012. The settlement requires Google to refrain from bypassing cookie controls in the future and requires Google to maintain a page on its site informing users about cookies and how to manage them. Last year, Google agreed to a $22.5 million settlement with the Federal Trade Commission in connection with similar ...

On July 12, 2013, Illinois Attorney General Lisa Madigan announced that she sent letters to operators of eight popular health-related websites requesting information about the websites’ online data collection practices. The Attorney General’s press release underscored how individuals’ health-related information shared online, which would be protected if disclosed in a traditional medical setting, “can be captured, shared and sold when online users enter their information into a website.” The Attorney General also stated that “website disclosure about the extent to which information is captured or shared is buried in privacy policies not found on the websites’ main pages.”

A state court has dismissed the California Attorney General’s claims that Delta Air Lines Inc. (“Delta”) violated the California Online Privacy Protection Act by failing to have an appropriately posted privacy policy for its mobile application, Bloomberg reports. The California AG sued Delta in December as part of an enforcement campaign that began with the issuance of warning letters to approximately 100 operators of mobile apps, including Delta. According to the Bloomberg report, a basis for the dismissal was the federal Airline Deregulation Act, under which a state ...

On March 12, 2013, Connecticut Attorney General George Jepsen announced that a coalition of 38 states had entered into a $7 million settlement with Google Inc. (“Google”) regarding its collection of unsecured Wi-Fi data via the company’s Street View vehicles between 2008 and 2010. The settlement is the culmination of a multi-year investigation by the states that we first reported on in 2010.

On January 7, 2013, Massachusetts Attorney General Martha Coakley announced that several Massachusetts medical practices have agreed to a consent judgment and $140,000 payment to settle charges they improperly disposed of medical information. The defendants, which include several pathology practices and a firm that provided medical billing services to those practices, were accused of dumping hard copy medical records at the Georgetown Transfer Station, a waste management facility open to the public. The records allegedly contained the names, Social Security numbers and medical diagnoses of approximately 67,000 individuals. The illegal dumping allegations were publicized in a Boston Globe article after a photographer for the newspaper discovered medical records at the facility while he was disposing of his own trash.

On December 6, 2012, California Attorney General Kamala D. Harris announced a lawsuit against Delta Air Lines, Inc. (“Delta”) for violations of the California Online Privacy Protection Act (“CalOPPA”). The suit, which the Attorney General filed in the San Francisco Superior Court, alleges that Delta failed to conspicuously post a privacy policy within Delta’s “Fly Delta” mobile application to inform users of what personally identifiable information is collected and how it is being used by the company. CalOPPA requires “an operator of a commercial Web site or online service that collects personally identifiable information through the Internet about individual consumers residing in California who use or visit its commercial Web site or online service,” such as a mobile application, to post a privacy policy that contains the elements set out in CalOPPA. According to Attorney General Harris’ complaint, Delta has operated the “Fly Delta” application for smartphones and other electronic devices since at least 2010. The complaint alleges that “[d]espite collecting substantial personally identifiable information (“PII”) such as user’s full name, telephone number, email address, frequent flyer account number and PIN code, photographs, and geo-location, the Fly Delta application does not have a privacy policy. It does not have a privacy policy in the application itself, in the platform stores from which the application may be downloaded, or on Delta’s website.”

In late October 2012, California Attorney General Kamala D. Harris began sending letters to approximately 100 mobile app operators, informing them that they are not in compliance with the California Online Privacy Protection Act (“CalOPPA”). Pursuant to CalOPPA, “an operator of a commercial Web site or online service that collects personally identifiable information through the Internet about individual consumers residing in California who use or visit its commercial Web site or online service” must post a privacy policy that contains specified elements. A mobile app arguably could be an “online service” under CalOPPA, which provides that an online service operator that collects “personally identifiable information” and “fails to post its policy within 30 days after being notified of noncompliance” is in violation of CalOPPA. The law affects a wide range of mobile app operators because of its very broad definition of “personally identifiable information,” which includes any “individually identifiable information about an individual consumer collected online by the operator from that individual and maintained by the operator in an accessible form,” such as a name, an email address or any other identifier “that permits the physical or online contacting of a specific individual.”

On September 25, 2012, the Federal Trade Commission announced that it had settled a case involving allegations of spying by software company DesignerWare, LLC (“DesignerWare”) and several rent-to-own companies that rent computers to consumers, such as Aaron’s, Inc., ColorTyme, Inc., and Premier Rental Purchase. The FTC collaborated with Illinois Attorney General Lisa Madigan in its investigation.

On September 12, 2012, Congressman Edward Markey (D-MA) released a bill that would require companies to tell customers about monitoring software installed on their mobile devices and obtain customers’ express consent before engaging in monitoring. These requirements would apply to mobile phone makers, network providers and application developers.

On July 31, 2012, Minnesota Attorney General Lori Swanson announced a $2.5 million settlement with Accretive Health, Inc. (“Accretive”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing regulations, and various Minnesota debt collection and consumer protection laws. As we previously reported in January 2012, Accretive, which acted as a business associate to two Minnesota hospital systems, experienced a breach in July 2011 that involved the protected health information of more than 23,000 patients.

In recent weeks, both state and federal regulators have considered security breach notification legislation. On June 15, 2012, Connecticut Governor Dannel Malloy signed a budget bill that, among other things, amends the state’s security breach notification law. The changes, which will take effect on October 1, 2012, most notably require businesses to notify the state Attorney General no later than the time when notice of a security breach is provided to state residents. Although the law does not specify when notice must be provided to affected individuals, the law states that such notice must be made “without unreasonable delay,” subject to law enforcement delays and the completion of an investigation by the business to determine the nature and scope of the incident, to identify affected individuals, or to restore the reasonable integrity of the data system. As we previously reported, Vermont also recently amended its breach notification statute to require businesses to notify the state Attorney General within 14 days of discovering a security breach or concurrently when notifying consumers, whichever is sooner.

On May 24, 2012, Massachusetts Attorney General Martha Coakley announced that South Shore Hospital agreed to a consent judgment and $750,000 payment to settle a lawsuit stemming from a data breach that occurred in February 2010. At that time, South Shore Hospital shipped several boxes of unencrypted back-up tapes to a service provider in Texas to erase them. The tapes contained the personal and protected health information of approximately 800,000 individuals, including names, Social Security numbers, financial account numbers and medical diagnoses. Several of the boxes went missing and have yet to be recovered, though there is no evidence that the information on the missing tapes has been misused.

On June 7, 2012, at the annual Safeguarding Health Information: Building Assurance through HIPAA Security Conference hosted in Washington, D.C. by the Department of Health and Human Services Office for Civil Rights (“OCR”) and the National Institute of Standards and Technology (“NIST”), OCR Director Leon Rodriguez said that, given HIPAA’s 15-year history and the substantial technical assistance OCR and NIST have provided covered entities, tolerance for HIPAA non-compliance is “much, much lower” than it has been in the past.

On June 1, 2012, the Attorney General of Vermont announced a series of recent legislative moves to enhance the state’s consumer protection laws, including amendments to Vermont’s security breach notification law. The changes, which were signed into law by Governor Peter Shumlin in early May, include a revised definition of “security breach,” the addition of a 45-day timing requirement for notifying affected consumers, and a requirement to notify the state Attorney General within 14 days of discovering the breach (or when notifying consumers, if sooner).

On March 21, 2012, Massachusetts Attorney General Martha Coakley announced that Maloney Properties Inc. (“MPI”), a property management firm, executed an Assurance of Discontinuance and agreed to pay $15,000 in civil penalties following an October 2011 theft of an unencrypted company-issued laptop. The laptop contained personal information of more than 600 Massachusetts residents and was left in an employee’s car overnight. MPI has indicated that it has no evidence of unauthorized access to or use of the personal information in connection with this breach.

The White House today released its long-awaited report outlining a framework for U.S. data protection and privacy policy. As expected, “Consumer Data Privacy in a Networked World: A Framework for Protecting Privacy and Promoting Global Innovation in the Global Digital Economy” articulates a Consumer Privacy Bill of Rights based on the individual’s right to exercise control over what personal data companies collect from the individual and how companies use the data. The Consumer Privacy Bill of Rights, which reflects principles of fair information practices and applies to personal data, sets forth individual rights for consumers and corresponding obligations of companies in connection with personal data. It also provides for the consumer’s right to:

• transparent privacy and data security practices;
• expect that companies will collect, use and disclose data in a manner consistent with the context in which it was collected;
• have their data handled in a secure manner;
• access and correct personal data;
• set reasonable limits on the personal data that companies collect and retain; and
• have personal data handled by companies with appropriate measures in place to assure they adhere to the Consumer Privacy Bill of Rights.

In recent weeks, regulators in California and Illinois have issued guidance on responding to data security breaches, while UK and California authorities released online forms for organizations to use when providing notification of a breach to regulators.

In December 2011, the UK Information Commissioner’s Office (“ICO”) released a new breach notification form, reinforcing its expectation that organizations provide notification whether or not such notification is legally required. Sector-specific breach notification requirements were introduced in the UK by The Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011, and since May 2011, public electronic communication service providers have been required to notify the ICO, and in some cases affected individuals, in the event of a data security breach. All other organizations are strongly encouraged to notify the ICO of serious security breaches, and the fact that an incident was reported voluntarily is something the ICO takes into consideration when determining the appropriate enforcement action.

On January 24, 2011, Connecticut Attorney General George Jepsen and Consumer Protection Commissioner William Rubenstein announced that they had reached an Assurance of Voluntary Compliance (“AVC”) with Metropolitan Life Insurance Co. (“MetLife”) in connection with an incident involving the disclosure of customer personal information on the Internet. In November 2009, a MetLife employee posted the personally identifiable information of current and former MetLife customers, including their Social Security numbers, on the Internet. Following the discovery of the posting, MetLife acted to mitigate possible harm by providing credit monitoring and identity theft insurance to the affected customers.

On January 12, 2012, Hunton & Williams hosted an hour-long webinar on the current enforcement environment in the U.S. and EU. The webinar, Current Trends in Global Privacy Enforcement, covered issues ranging from the Federal Trade Commission’s tougher approach to investigations to increased monitoring of corporate privacy practices by European data protection authorities. Hunton & Williams speakers included Lisa J. Sotto, partner and head of the Global Privacy and Data Security practice, London partner Bridget Treacy, London senior attorney Rosemary Jay and Brussels ...

On January 19, 2012, Minnesota Attorney General Lori Swanson announced a lawsuit against Accretive Health, Inc., (“Accretive”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing regulations, the Minnesota Health Records Act, Minnesota’s debt collection statutes and Minnesota’s consumer protection laws. The suit, which was filed in Federal District Court in Minnesota, alleges that Accretive failed to adequately safeguard patients’ protected health information (“PHI”). This failure contributed to a July 2011 information security breach when an Accretive employee left an unencrypted laptop containing information of approximately 23,500 patients in a rental car. The laptop was stolen and has not yet been recovered.

On August 31, 2011, California Governor Jerry Brown signed into law amendments to that state’s security breach notification statute.  The revisions establish new content requirements for breach notification letters to California residents, and mandate notification to the state Attorney General when a breach affects more than 500 Californians.  Senate Bill 24 was the third effort by State Senator Joe Simitian to build on the landmark California breach notification law he authored in 2002.  The two previous bills he proposed were passed by the California legislature, but vetoed by former Governor Arnold Schwarzenegger.

On July 29, 2011, Massachusetts Attorney General Martha Coakley announced a $7,500 settlement with Belmont Savings Bank following a May 2011 data breach involving the names, Social Security numbers and account numbers of more than 13,000 Massachusetts residents.  The bank has stated that it has no evidence of unauthorized access to or use of consumers’ personal information in connection with this breach.

Last month, Texas Governor Rick Perry signed a health privacy bill into law that imposes new obligations exceeding the requirements in the HIPAA Privacy Rule.  The law, which will become effective on September 1, 2012, incorporates the expanded definition of the term “covered entity” in Texas’s existing health privacy law and could have a broad impact on many non-HIPAA covered entities.

On June 13, 2011, Representative Mary Bono Mack (R-CA) released a discussion draft of the Secure and Fortify Data Act (the “SAFE Data Act”), which is designed to “protect consumers by requiring reasonable security policies and procedures to protect data containing personal information, and to provide for nationwide notice in the event of a security breach.”  Representative Bono Mack is Chairman of the House Subcommittee on Commerce, Manufacturing and Trade.  In a press release, Representative Bono Mack remarked that “E-commerce is a vital and growing part of our economy.  We should take steps to embrace and protect it – and that starts with robust cyber security.”  She added that “consumers have a right to know when their personal information has been compromised, and companies and other organizations have an overriding responsibility to promptly alert them.”

On June 8, 2011, the Department of Commerce’s Internet Policy Task Force released a report entitled “Cybersecurity, Innovation and the Internet Economy.”  The report contains four broad policy recommendations: (1) the creation of a nationally recognized approach to minimize vulnerabilities for the Internet and networking services industry, (2) the development of incentives to combat cybersecurity threats, (3) increased cybersecurity education and research, and (4) the promotion of international cooperation to enable sharing of cybersecurity best practices.

As we reported last week, on May 12, 2011, the Obama administration announced a comprehensive cybersecurity legislative proposal in a letter to Congress.  The proposal, which is the culmination of two years of work by an interagency team made up of representatives from multiple departments and agencies, aims to improve the nation’s cybersecurity and protect critical infrastructure.  If enacted, this legislation will affect many government and private-sector owners and operators of cyber systems, including all critical infrastructure, such as energy, financial systems, manufacturing, communications and transportation.  In addition, the proposal includes a wide-reaching data breach notification law that is intended generally to preempt the existing state breach laws in 46 states plus Washington, D.C., Puerto Rico and the U.S. Virgin Islands.

On May 9, 2011, Senator Jay Rockefeller (D-WV), the Chairman of the Senate Committee on Commerce, Science and Transportation, introduced the “Do-Not-Track Online Act of 2011” (the “Act”).  The Act instructs the Federal Trade Commission to promulgate regulations that would (1) create standards for the implementation of a “Do Not Track” mechanism that would enable individuals to express a desire to not be tracked online and (2) prohibit online service providers from tracking individuals who express such a desire.  The regulations would allow online service providers to track individuals who do not want to be tracked only if (1) the tracking is necessary to provide a service requested by the individual (and the individuals’ information is anonymized or deleted when the service is provided), or (2) the individual is given clear notice about the tracking and affirmatively consents to the tracking.

On April 12, 2011, U.S. Senators John Kerry (D-MA) and John McCain (R-AZ) introduced the Commercial Privacy Bill of Rights Act of 2011 (the “Act”) to “establish a regulatory framework for the comprehensive protection of personal data for individuals under the aegis of the Federal Trade Commission.”  The bill applies broadly to entities that collect, use, transfer or store the “covered information” of more than 5,000 individuals over a consecutive 12-month period.  Certain provisions of the bill would direct the FTC to initiate rulemaking proceedings within specified timeframes, but the bill also imposes requirements directly on covered entities.

On March 28, 2011, the Briar Group, LLC, owner and operator of several Boston-area bars and restaurants, reached a settlement with Massachusetts Attorney General Martha Coakley regarding the breach of “tens of thousands” of consumers’ payment card information.  The settlement resolves a lawsuit filed in Massachusetts Superior Court alleging that in April 2009 hackers gained access to the Briar Group’s computer systems and misappropriated customer data by installing malcode which was not removed by the company until December of that year.  The complaint further alleged that the Briar Group’s lax data protection practices, such as allowing employees to share computer passwords and failing to secure network wireless connections, put customers’ personal information at risk.

Representative Rick Boucher (D-VA), current head of the House Subcommittee on Communications, Technology and the Internet, lost his reelection bid yesterday to Republican Morgan Griffith, the Majority Leader of the Virginia House of Delegates.  Representative Boucher, widely recognized and respected for his legislative efforts in the areas of technology, telecommunications and privacy law, co-authored the CAN-SPAM Act and also introduced draft privacy legislation earlier this year.  Congressman Boucher’s defeat leaves the House Subcommittee on Communications, Technology and the Internet panel without its top Democrat, and it is unclear who will fill that leadership vacancy.

On September 15, 2010, New York State Attorney General Andrew Cuomo announced a $100,000 settlement with EchoMetrix, a developer of parental control software that monitors children’s online activity.  The settlement comes one year after the Electronic Privacy Information Center (“EPIC”) alleged in a complaint to the Federal Trade Commission that EcoMetrix was deceptively collecting and marketing children’s information.

On July 21, 2010, a coalition of 38 states sent a letter to Google demanding more information about the company’s collection of data from unsecured wireless networks by its Google Street View vehicles.  The letter was sent by Connecticut Attorney General Richard Blumenthal on behalf of the executive committee of a multistate working group investigating Google Street View practices.  As we reported on June 22, Blumenthal has spearheaded the nationwide investigation into Google Street View.  Among other things, the letter asks Google to identify who was responsible for the software code that allowed the Street View cars to collect data broadcast over Wi-Fi networks, and for a list of states where unauthorized data collection occurred.  The letter also asks Google for details regarding whether any of the data was disclosed to third parties or used for marketing purposes.

Connecticut Attorney General Richard Blumenthal recently announced that his office will lead a multistate investigation into the “deeply disturbing” unauthorized collection of personal data from wireless computer networks by Google’s Street View cars.  Attorney General Blumenthal noted that Google “must provide a complete and comprehensive explanation of how this unauthorized data collection happened, why the information was kept if collection was inadvertent and what action will prevent a recurrence.”  A significant number of states are expected to ...

The Attorney General of Connecticut, Richard Blumenthal, is investigating an alleged breach of medical records at Griffin Hospital in Derby, Connecticut.  The hospital believes that a formerly affiliated radiologist gained unauthorized access to its digital Picture Archiving and Communications System (“PACS”), which stores patient information, including names, exam descriptions and medical record numbers.  In February, the hospital began receiving inquiries from patients who had been contacted by the radiologist to promote professional services offered at another medical facility.  In response to patient inquiries, the hospital conducted an internal investigation that revealed several instances of unauthorized access to the PACS system.  The hospital subsequently notified Attorney General Blumenthal.

In a lawsuit he described as “[s]adly . . . historic,” Connecticut Attorney General Richard Blumenthal sued Health Net of Connecticut, Inc. for allegedly failing to secure private patient medical records and financial information involving hundreds of thousands of Connecticut enrollees and promptly notify consumers endangered by the security breach.  The case marks the first action by a state attorney general under the Health Information Technology for Economic and Clinical Health (“HITECH”) Act to enforce provisions of the Health Insurance Portability and Accountability Act (“HIPAA”).  The suit also alleges a violation of Connecticut’s breach notification statute.

On November 9, 2009, Connecticut’s Attorney General, Richard Blumenthal, announced an investigation of whether Blue Cross and Blue Shield (“BCBS”) violated Connecticut’s data breach notification law by waiting until two months after a data breach had occurred to notify affected Connecticut residents.  The data breach, which Attorney General Blumenthal called “one of the most sizable and significant in Connecticut’s history,” involved the theft of a laptop containing confidential unencrypted data from the car of a BCBS employee in late August.  BCBS notified affected Connecticut residents of the breach in late October.