The Arizona Legislature has significantly expanded and strengthened the state’s data breach notification law. The legislation was signed by Arizona Governor Doug Ducey on April 11, 2018.

Members of Ballard Spahr’s Privacy and Data Security Group will host a webinar on Wednesday, April 25, 2018, at noon PT/1 p.m. MT/3 p.m. ET to provide in-depth analysis of the new law and place it into context with similar legislation enacted by other states over the past few months. Visit www.ballardspahr.com/AZwebinar to register and for more information.

Below we discuss the most notable changes:

Continue Reading Arizona Strengthens and Expands Data Breach Notification Law

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

Alabama has officially joined the data breach notification party. Alabama Governor Kay Ivey signed Act No. 2018-396 into law on March 28, 2018. The law will take effect on June 1, 2018. Although it was last in the country to enact such a data security law, Alabama’s new law will immediately take its place among the most stringent in the nation.

The Alabama law generally can be categorized into four obligations:

  • All entities subject to the law (covered entities and third-party agents) must “implement and maintain reasonable security measures to protect sensitive personally identifying information against a breach of security.”
  • A “covered entity shall conduct a good faith and prompt investigation” into “a breach of security that has or may have occurred in relation to sensitive personally identifying information.”
  • A covered entity must notify each affected Alabama resident, and a third-party agent must notify the covered entity, of a “breach of security involving sensitive personally identifying information;”
  • A covered entity must notify the Alabama Attorney General and credit reporting agencies of a breach involving more than 1,000 Alabama residents.

Continue Reading Alabama Becomes 50th State to Enact Data Breach Notification Law

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

In the absence of federal action, state legislators continue to propose bills that would increase data privacy and security protections for consumers. Any entity that does business in these states or maintains confidential information of their residents should monitor the legislation to determine whether and how the proposed changes may affect operations.

The bills are a reaction to Equifax’s data breach disclosure last summer. In prior alerts and articles, we discussed proposed legislation in Arizona, Colorado, North Carolina, and South Dakota. In this post, we examine legislation being considered in Oregon, New York, Alabama, and Rhode Island.

To put the discussion into context, 48 states already have laws requiring entities to notify affected individuals if the entity suffers a loss or compromise of the individuals’ confidential information. Those laws differ in many respects, resulting in a complex web of legal responsibilities that creates headaches for entities required to comply with them.

The challenge will become even more complex if the proposed bills become law, because, generally speaking, they would:

  • expand the types of confidential information covered under state breach notification requirements;
  • implement specific deadlines for when affected individuals must be notified;
  • require businesses to implement and maintain reasonable security procedures to prevent data breaches; and
  • authorize state attorneys general to enforce these provisions through substantial fines and penalties for non-compliance.

Continue Reading Oregon, New York, Alabama, and Rhode Island Join List of States Considering Data Breach Legislation Post-Equifax

The Pennsylvania Supreme Court recently issued a sweeping ruling “that accessing any information from a cell phone without a warrant” violates the Fourth Amendment to the United States Constitution. In Commonwealth v. Fulton, the Court suppressed the warrantless search of the contents of a ‘flip phone’ and reversed a murder conviction that flowed from the unlawful search.  The Supreme Court held that the Superior Court’s decision contravened U.S. Supreme Court precedent in Riley v. California and United States v. Wurie, 134 S. Ct. 2473 (2014), holding that searches of cell phones generally require a warrant.

In June 2010, Philadelphia Police arrested I. Dean Fulton and three others on suspicion of unlawful drug activity and gun possession. They seized Fulton’s “smart phone” from his body at the time of the arrest.  They subsequently obtained a search warrant for the vehicle Fulton and the others were in at the time of their arrests.  That search turned up a firearm, a holster, three cell phones and other property.  The cell phones – which included one ‘flip phone’ later connected to Fulton –were provided to the Homicide Division, which was investigating a recent drug-related murder.  Continue Reading Pennsylvania Supreme Court: If You Want to Search a Cell Phone, Get a Warrant!

As we were the first in the nation to report, in January, Colorado lawmakers proposed legislation that would significantly change the way in which entities operating in Colorado must protect confidential information and disclose breaches involving same.

Last week, the bill’s sponsors submitted an amended bill that revises a number of key provisions. Among other changes, the amended bill would require entities to notify Colorado residents within 30 days of discovery of a data breach.  If enacted, Colorado would have the shortest time frame for disclosure in the country. Continue Reading Colorado Legislature Continues to Push Privacy and Data Security Legislation in Wake of Equifax

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