On November 21, 2018, the Pennsylvania Supreme Court drastically changed the data breach litigation landscape by holding that an employer has a common law duty to use reasonable care to safeguard employees’ personal information stored on an Internet-accessible computer. The Court further held that Pennsylvania’s economic loss doctrine permits recovery for “purely pecuniary damages” on a negligence claim premised on a breach of such a duty. Continue Reading Pennsylvania Supreme Court Recognizes Common Law Duty to Safeguard Employees’ Personal Data

With more than double the number of required signatures well ahead of the verification deadline late this month, the citizen-initiated measure “The California Consumer Privacy Act of 2018” appears headed for the statewide ballot on November 6. If approved by a majority of Golden State voters, the ballot measure would greatly expand right-to-know and opt-out requirements, subjecting covered businesses to increased costs for compliance and strict liability for any violations.

Continue Reading California Voters Likely to Consider Enacting GDPR-Like Privacy Law in November

The U.S. Court of Appeals for the Seventh Circuit has reinstated a data breach class action filed against Barnes & Noble (B&N).  The litigation, styled as Dieffenbach v. Barnes & Noble, Inc., now heads back to the U.S. District Court for the Northern District of Illinois, which previously dismissed the complaint three times for lack of standing and/or failure to state a claim.

The lawsuit stems from a September 2012 data breach in which “skimmers” gained access to the payment card readers in B&N stores and siphoned off customer names, payment card numbers, expiration dates, and PINs.  “Skimming” is an ‘old school’ hacking technique involving tampering with the PIN pad terminals to exfiltrate the payment card data that runs through them when a card is swiped.  Payment card data was skimmed from PIN terminals in 63 B&N stores, located in 9 states. Continue Reading Seventh Circuit Reinstates Barnes & Noble Data Breach Class Action

In March, we reported that the Oregon legislature was considering amending its data breach notification and information security laws. That legislation has now passed the Oregon legislature and been signed into law by Oregon’s governor.  A copy of the new law is available here. The most notable changes are as follows:

Continue Reading Oregon Amends Data Breach Notification and Information Security Laws

South Dakota (site of Ballard’s newest office) has become the 49th State to enact a data breach notification law.  South Dakota Governor Dennis Daugaard signed SB 62 into law on March 21, 2018.  The law will take effect on July 1, 2018.

As with similar measures pending in other state legislatures, SB 62 was introduced in the South Dakota Senate on January 9, 2018, in the wake of the disclosures relating to the Equifax breaches. The law generally mirrors those of many other states, but includes a few new wrinkles. Continue Reading South Dakota Enacts Data Breach Notification Law

Mossack Fonseca, the beleaguered law firm at the center of the international Panama Papers scandal, has announced that it is closing its doors.  The firm cited “reputational deterioration” that has caused “irreversible damage.”

Founded in 1977 by Jurgen Mossack and Ramon Fonseca, Mossack Fonseca had been perched at the top of offshore legal services providers until April 2016, when it became ground zero for a global controversy because approximately 11.5 million of the firm’s internal legal and financial documents were leaked to the media. These leaked documents – publicized primarily by the International Consortium of Investigative Journalists (“ICIJ”) – allegedly reveal a global system of undisclosed offshore accounts, money laundering and tax evasion, and how the rich and powerful around the world use shell companies to conceal assets and possible illegal activity.

The incident is the largest publicly disclosed data breach involving a law firm. Following the April 2016 publication of data, founding partner Ramon Fonseca and other public sources claimed that the firm’s network had been compromised by hackers sometime in 2015.  Security researchers and other public sources identified numerous unpatched vulnerabilities in Mossack’s website and email server, which could have been very easily compromised by hackers. Approximately 2.6 terabytes of data – including 4.8 million emails, 3 million database files, and 2.1 million.pdf files – were leaked, including client documents dating back to the 1970s.  Approximately one year after the alleged data theft, ICIJ published the Mossack data and set off numerous investigations into the firm and its clients. Continue Reading “Panama Papers” Law Firm Announces Its Closure Due to Fallout from Massive Data Breach

On March 6, 2018, the FTC hosted a live Twitter chat to mark the twentieth anniversary of the Children’s Online Privacy Protection Act (COPPA).  The stated purpose of the chat was to discuss the FTC’s work to enforce COPPA and to ensure the FTC’s rule implementing the law stays in step with evolving technologies and data collection practices.

The chat began with the FTC pointing to its published FAQs, as well as two recent COPPA settlements: a $650,000 settlement with VTech Electronics Limited, which was the FTC’s first children’s privacy case involving Internet-connected toys, and a $235,000 settlement with Prime Sites, Inc., which focused on how a company can gain “actual knowledge” that it is collecting information from a child. Continue Reading FTC Explains Evolution of COPPA in Live Twitter Chat

The Philadelphia Eagles’ Super Bowl aspirations dimmed on a late autumn afternoon when two Ram defenders hammered their star quarterback, Carson Wentz, on a run to the end zone that was called back for a penalty. Wentz stayed in the game and threw a touchdown pass, but soon disappeared into the locker room for the remainder of the game. By mid-week, the medical reports confirmed what most Eagles fans already seemed to know: Wentz had torn ligaments in his knee and was finished for the season.

In the two weeks leading to the Super Bowl, sports media filled time and space with stories about the cut on Tom Brady’s hand and Rob Gronkowski’s expected clearance to play after suffering a concussion.

How, in the world of HIPAA privacy and security was so much medical information available for public consumption? Continue Reading What the Super Bowl Can Teach Us About HIPAA

Massachusetts Attorney General Maura Healey has unveiled a new, “easier and more efficient” way to notify her office of data breaches. The Massachusetts Attorney General’s Office has created an online portal and web form for submitting data breach notifications.  An email announcing the changes was transmitted this week to attorneys who have previously filed data breach notices on behalf of clients. The email requested our “assistance in passing the message along,” which we are hereby doing.

Attorney General Healey stated, “This new feature allows businesses to more efficiently report data breaches so we can take action and share information with the public.”  The Attorney General Office’s website will soon include a publicly accessible database of data breaches reported to the Office. Other states, including California and Maryland, have similar public databases.

Continue Reading Massachusetts Attorney General Launches Online Data Breach Reporting Portal

Add South Dakota (site of Ballard’s newest office) and North Carolina to the list of states considering new data security legislation. South Dakota is poised to become the 49th state to enact a data breach notification law, while North Carolina is considering a very significant expansion of its existing law.

Will South Dakota Become No. 49?

The South Dakota Senate passed SB 62 on January 25, 2018. The bill, which now heads to the South Dakota House of Representatives, generally would require an “information holder” to notify South Dakota residents of any “breach of system security” involving their “personal or protected information.” Subject to certain exceptions, notification to South Dakota residents must be made “not later than sixty days from the discovery or notification of the breach of system security.” The South Dakota Attorney General and “all consumer reporting agencies as defined in 15 U.S.C. § 1681a” also must be notified of breaches involving more than 250 South Dakota residents. Notification to South Dakota residents is not required “if following appropriate investigation and notice to the attorney general, the information holder reasonably determines that the breach will not likely result in harm to the affected person.” Continue Reading South Dakota and North Carolina Consider New Data Security Legislation