Privacy & Information Security Law Blog

On May 10, 2024, the Vermont legislature passed HB 121, which was delivered to Governor Phil Scott for signature. HB 121 will enact the Vermont Data Privacy Act, the Vermont Data Broker Security Breach Notice Act and the Vermont Age-Appropriate Design Code.

On October 5, 2023, Blackbaud Inc., a software provider for the philanthropy, healthcare, and education sectors, has resolved claims that the District of Columbia and 49 U.S. states raised. The claims stem from a ransomware attack that impacted Blackbaud in 2020. The company was affected by a ransomware attack that exposed user information to unauthorized third parties. The breach not only impacted approximately 13,000 Blackbaud customers, but the customers’ own clients and donors as well.

On May 27, 2022, Vermont Governor Phil Scott signed H.515, making Vermont the twenty-first state to enact legislation based on the National Association of Insurance Commissioners Insurance Data Security Model Law (“MDL-668”). The Vermont Insurance Data Security Law applies to “licensees”—those licensed, authorized to operate or registered, and those required to be licensed, authorized or registered, under Vermont insurance law, with few exceptions. The new law generally follows MDL-668’s provisions, adopting the model law’s broad definition of nonpublic information and requiring licensees to, in part, maintain a written information security program (“WISP”) and investigate cybersecurity incidents. Unlike other state laws based on MDL-668, however, the Vermont Insurance Data Security Law declines to establish separate cybersecurity event notification requirements for licensees.

On March 2, 2022, eight states announced a bipartisan, nationwide investigation into whether TikTok operates in a way that causes or exacerbates harm to the physical and mental health of children, teens and young adults. The probe will further consider whether the company violated state consumer protection laws and put the public at risk.

On August 4, 2020, Senators Jeff Merkley (OR) and Bernie Sanders (VT) introduced the National Biometric Information Privacy Act of 2020 (the “bill”). The bill would require companies to obtain individuals’ consent before collecting biometric data. Specifically, the bill would prohibit private companies from collecting biometric data—including eye scans, voiceprints, faceprints and fingerprints—without individuals’ written consent, and from profiting off of biometric data. The bill provides individuals and state attorneys general the ability to institute legal proceedings against entities for alleged violations of the act.

On July 1, 2020, amendments to Vermont’s data breach notification law, signed into law earlier this year, will take effect along with Vermont’s new student privacy law.

On March 10, 2020, the Vermont Attorney General filed a lawsuit against Clearview AI (“Clearview”), alleging that Clearview violated Vermont’s consumer protection law and data broker law. We previously reported on Vermont’s data broker law, which was the first data broker legislation in the U.S.

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 ...

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 December 14, 2016, the FTC announced that the operating companies of the AshleyMadison.com website (collectively, the “Operators”) have settled with the FTC and a coalition of state regulators over charges that the Operators deceived consumers and failed to protect users’ personal information. The FTC worked with a coalition of 13 states, the Office of the Privacy Commissioner of Canada and the Office of the Australian Information Commissioner to resolve this matter, which was initiated in the wake of the website’s July 2015 data breach.

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 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 June 23, 2011, in a 6-3 decision, the United States Supreme Court ruled in IMS Health Inc. v. Sorrell that a Vermont law prohibiting the sale of prescriber-identifiable data to drug companies was an unconstitutional violation of the First Amendment right to free speech.  Thomas Julin, a partner at Hunton & Williams LLP, represented IMS Health in this case.  The Supreme Court’s ruling affirmed the holding of the U.S. Court of Appeals for the Second Circuit, resolving a split with the First Circuit (which upheld a similar law in New Hampshire), and likely preventing the enactment of similar restrictive laws across the country.

On April 26, 2011, the United States Supreme Court heard oral argument in Sorrell v. IMS Health, a case concerning the constitutionality of a Vermont law that restricts access to prescription drug records.  Laws enacted by New Hampshire, Maine and Vermont prohibit pharmacies from selling prescriber-identifiable information in prescription records to third parties for marketing purposes.  The Supreme Court seeks to resolve a circuit split that resulted from legal challenges to the statutes in all three states.  Thomas Julin, partner at Hunton & Williams LLP, represents IMS Health ...