Today the European Court of Justice (“ECJ”) issued its Judgment in the Schrems case, and in doing so, added another tremor to the ongoing seismic shift related to cross-border privacy law. The two major elements of today’s Judgment are: 1) that Commission Decision 2000/520/EC  of 26 July 2000 of the adequacy of the protection provided by the US Safe Harbor Framework (the “Safe Harbor Decision”) is invalid, and 2) even if the Safe Harbor Decision were otherwise valid, no decision of the Commission can reduce the authority of a national data protection authority to enforce data protection rights as granted by Article 28 of Directive 95/46/EC (the “DP Directive”).

Clearly, the first element brings a more immediate concern for all the companies participating in the Safe Harbor framework. However, the second element will have much longer term consequences for the stability of US-EU commerce and privacy law.
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With the recent uptick in the U.S. of lawsuits filed as a result of a data breaches, state legislators in the U.S. have been busy updating the many different state laws that dictate how a company must respond if they have been hacked and personal information has been compromised. With no comprehensive federal law that sets forth a uniform compliance standard, companies operating in the U.S. must comply with a patchwork of 47 different states laws that set forth a company’s obligations in the event of a data breach.

Additionally, the trend is to have more than just notice requirements. Now companies have to develop proactive steps they must take to avoid a data breach in the first place. We first saw this with the Massachusetts law, and the model is expanding.


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In any case involving a data breach of customer or employee information, the first line of defense for the defendant is to assert that the plaintiff(s) lack standing to bring suit. In Remijas v. Neiman Marcus Group, the Seventh Circuit became the first United States Court of Appeals to tackle the issue of standing in the context of data breach litigation since the Supreme Court’s pronouncement on standing in Clapper.
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On July 21, 2014, Russia adopted Federal Law No. 242-FZ, “On Amendments to Certain Legislative Acts of the Russian Federation for Clarification of the Procedure of Personal Data Processing in Information and Telecommunication Networks” (“Federal Law No. 242-FZ”), which introduces a number of changes to existing Russian data protection laws. Specifically, it amends Federal Law No. 152-FZ, “On personal data,” by establishing a localization requirement for personal data processing.

Effective Date

What makes Federal Law No. 242-FZ important is its effective date. It was initially scheduled to come into force on September 1, 2016. However, on December 31, 2014, Federal Law No. 526-FZ was enacted, which changed the effective date of Russia’s Data Localization Law to September 1, 2015.
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The plethora of security incidents in the news have once again put security front and center of the international agenda. Predictably, this has triggered a number of responses from governments around the world. Some of these responses seem to have been ill-considered. However, one of the more comprehensive responses came out of the US President’s address to the Federal Trade Commission last week. A series of laws were proposed to address the increasing risks which are confronting individual security and privacy rights.

The President’s remarks at the FTC gives some valuable insight into where the US regulatory environment may end up in the next year or so. As a part of this analysis, one should focus on two very different agendas: Privacy and Security. These issues, while similar, are very different. Case in point, the UK PM’s comment around banning encryption could well result in increased security. However, it will absolutely damage individual privacy (and arguably also damage commercial security).
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A company faced with a security breach has a lengthy “to do” list, things to accomplish with respect to its incident response plan. It must, among other things, determine the root cause of the vulnerability or breach, investigate and eliminate the vulnerability or breach, determine the full nature and extent of the breach, determine who to notify and finalize the notifications.

If the American Postal Workers Union (APWU) has its way, a unionized employer facing a security breach involving employee personal information would have yet another responsibility – bargaining over the impact of or response to the security breach.
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This week, the Connecticut Supreme Court issued an opinion which upheld a state common law negligence action against a healthcare provider for violation of privacy and confidentiality laws and regulations using as evidence of the standard of care the Health Information Portability and Accountability Act (HIPAA) and its accompanying regulations. The court denied defense arguments that HIPAA, which expressly does not provide a private right of action, preempts such state law negligence claims.
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Cross Posted from Trading Secrets

The security breach news cycle continues. There remains a deluge of news stories about point-of-sale terminals being compromised, the ease of magnetic stripes being cloned, and the need for Chip and PIN technology being deployed on credit cards. The legal ramifications of all these events is just starting to become apparent – and it’s complicated. Individual liability is beginning to develop.
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While the Supreme Court has taken some heat in the past for seeming to misunderstand technology and how it impacts the normal person’s life, with Riley v. California the Court demonstrated not only an unexpected fluency with how mobile phone technology has evolved, but also with how it has caused our daily sphere of privacy

The CJEU’s judgment against Google has been hailed as a “Landmark Ruling“. I agree that this judgment is a landmark ruling – however, not for the reason everyone else is making it out to be. As noted earlier, the “Right to be Forgotten” isn’t really in the holding of the judgment. Further, the “long-arm” application of EU law isn’t something new (at least to US attorneys). What is new is the reason for allowing a right of deletion against a search engine and not the underlying publisher of the original facts.
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