On August 12, 2021, the United States District Court for the District of South Carolina issued an opinion denying in part and granting in part a motion by Blackbaud to dismiss seven statutory claims brought by plaintiffs in a multidistrict consolidated action stemming from a ransomware attack. The most notable aspect of the opinion is the Court’s interpretation of the California Medical Information Act (CMIA), which may have the effect of broadening the scope of liability for California-based cloud service providers that suffer data breaches.
Continue Reading Federal Court Holds that Cloud Service Provider is Subject to CMIA

Colorado has become the third state in the country to pass a comprehensive data privacy law, joining California and Virginia.  Assuming the governor signs—as he is widely expected to do—the Colorado Privacy Act (the “CPA”) will go into effect on July 1, 2023.

Similar to the California and Virginia laws, the CPA affords Colorado “consumers”

Ballard Privacy & Data Security partners Phil Yannella, Kim Phan and Greg Szewczyk recently wrote an article on managing compliance with the growing patchwork of state privacy laws for the Media Law Resource Center (MLRC).  The article was made available at last week’s  Legal Frontiers in Digital Media virtual conference sponsored by the MLRC and will appear in an upcoming edition of “Legal Frontiers in Digital Media,” MLRC Bulletin (June 2021).  A copy of the article is available here:
Continue Reading Managing Compliance with a Patchwork of State Privacy Laws

2021 has so far been a year of conflicting impulses in biometrics law: two proposed bills in New York and Maryland would impose substantial new requirements on private entities, but in Illinois a proposed amendment would reign in that state’s existing Biometric Information Privacy Act (BIPA).
Continue Reading The State of Proposed Biometrics Laws

On April 29, 2021, the Federal Trade Commission (FTC) hosted a virtual workshop, entitled “Bringing Dark Patterns to Light,” to examine “dark patterns.” In her opening remarks, Acting FTC Chairwoman Rebecca Kelly Slaughter broadly described “dark patterns” as “user interface designs that manipulate consumers into taking unintended actions that may not be in their interest.” Chairwoman Slaughter highlighted several examples of dark patterns, including confusing cancellation procedures that force users to navigate multiple screens, online applications that hide the material terms of a product or service through the use of inconspicuous drop down links and auto-scroll features, and the addition of products to users’ shopping carts without their knowledge or consent.
Continue Reading FTC Workshop Signals Increased Regulatory Focus on Dark Patterns

After a pandemic-related hiatus in 2020, a number of U.S. states have proposed new data privacy laws in 2021 – and several are very close to passage.  Virginia’s proposed data privacy law appears to be the closest and is likely to be signed into law by Governor Northam in the near future.  Washington and Florida’s

On December 14, 2020, the Federal Trade Commission (FTC) announced in a press release that it is issuing orders under the FTC’s authority in Section 6(b) of the FTC Act to the following nine social media and video streaming companies: Amazon.com, Inc., ByteDance Ltd. (which operates the short video service TikTok), Discord Inc., Facebook, Inc.,

Earlier this month, the Federal Trade Commission (FTC) announced a $10 million settlement with the online learning company ABCmouse for allegedly violating the FTC Act as well as the Restore Online Shoppers’ Confidence Act (ROSCA). The FTC Act prohibits unfair or deceptive acts or practices in or affective commerce. ROSCA makes it illegal to automatically

The Financial Crimes Enforcement Network (“FinCEN”) just issued another Advisory pertaining to two consumer fraud schemes exacerbated by the COVID-19 pandemic. This Advisory focuses on “imposter schemes” and “money mule schemes, ”which we discuss below.

This most recent Advisory is the latest in a string of pronouncements relating to the pandemic by FinCEN, which has stated that it regularly will issue such documents. As we have blogged, FinCEN issued an Advisory on May 18 regarding medical scams related to the pandemic, and issued a companion Notice that “provides detailed filing instructions for financial institutions, which will serve as a reference for future COVID-19 advisories.” On April 3, 2020, FinCEN also updated its March 16, 2020 COVID-19 Notice in order to assist “financial institutions in complying with their Bank Secrecy Act (“BSA”) obligations during the COVID-19 pandemic, and announc[ing] a direct contact mechanism for urgent COVID-19-related issues.”

The most recent Advisory again provides a list of potential red flags that FinCEN believes that financial institutions should be monitoring for, in order to detect, prevent, and report such suspicious activity. As we previously have commented: although such lists can be helpful to financial institutions, they ultimately may impose de facto heightened due diligence requirements. The risk is that, further in time, after memories of the stressors currently imposed by COVID-19 have faded, some regulators may focus only on perceived historical BSA/AML compliance failures and will invoke these lists not merely as efforts by FinCEN to assist financial institutions in deterring crime, but as instances in which FinCEN was putting financial institutions on notice.

Further, the most recent Advisory suffers from the fact that its list of red flags for imposter schemes is best directed at consumers themselves, rather than at financial institutions offering services to consumers: many of the red flags pertain to anomalies in the communications sent directly by fraudsters to targeted consumer victims – information that financial institutions rarely possess.
Continue Reading FinCEN Issues Advisory on COVID-19 and Imposter and Money Mule Schemes

With the ongoing covid crisis leaving businesses of all sizes concerned about the short and medium term future, the intimidating task of considering a liquidation or restructuring is inevitably starting to become a reality.  Although privacy in the bankruptcy context is nothing new—especially in the context of personally identifiable information (“PII”) held by a company—it