November 2006

One update this week, and news regarding a significant new California Supreme Court decision on distributor immunity for defamatory Internet publications.

New AG Position on Prop 83

We previously reported on cases challenging recently passed Proposition 83, which increases penalties and parole terms for many sex crimes, requires felony sex offenders to wear GPS tracking devices for life, and subjects former offenders to expanded residency restrictions. Despite having taken the position on November 15 that the law does not apply retroactively, Attorney General Bill Lockyer appeared to reverse course on Monday, arguing that the measure bars all sex offenders from moving within 2,000 feet of a park or school. U.S. District Judge Jeffrey White of the Northern District of California set a hearing for February 23, 2007, extended the temporary restraining order barring law enforcement officials from evicting sex offenders now living within 2,000 of a school or park, and ordered the AG to submit briefing regarding their position after new AG Jerry Brown takes office. The AG asserted that its position had not changed; rather, it was responding to new circumstances.

Here are a couple of recent legal developments concerning the privacy implications of global positioning system (GPS) technology.

1) Not-So-Sly Fox

On November 9, Fox Rent A Car, a Phoenix-based company with locations throughout California, settled a complaint filed against it by Attorney General Bill Lockyer and the San Mateo District Attorney concerning Fox’s use of GPS to track renters’ mileage and destinations. The complaint alleged that Fox had used GPS technology (1) to track mileage in order to impose mileage fees, which directly contradicted Fox’s advertised policy of unlimited mileage; and (2) to charge customers fees for leaving the state.

Though the GPS tracking section of the complaint was based on , which forbids liquidated damage penalties of the kind Fox imposed for mileage, Fox’s actions likely also violate Civil Code § 1936(p), which prohibits rental car companies from employing “electronic surveillance devices” for the purposes of assessing fines or surcharges. That provision became effective January 1, 2005.

Under the terms of the settlement, Fox is enjoined from using GPS technology for any purpose other than tracking vehicles suspected of being lost or stolen, Fox must keep a record of each time it uses GPS telemetry and must inform renters if they use other surveillance technology. Fox will pay a total of approximately $700,000, including $200,000 in civil penalties and $89,000 in restitution to customers who incurred mileage and travel surcharges.

Posted in GPS

Election News

Making their voices heard at the polls, Californians voted on a number of candidates and measures that may affect their privacy rights.

California voters elected Democratic State Senator Debra Bowen, who prevailed in a tight race for Secretary of State over Republican incumbent Bruce McPherson.  Bowen has authored significant privacy legislation in California, including security freeze legislation, and campaigned on a platform focused on privacy rights, including security and reliability questions surrounding the use of electronic voting machines.

Californians have rejected Proposition 85, with 54% of voters voting no on the measure, which would have prohibited abortion for a minor until 48 hours after a physician notifies her parent or legal guardian, except in cases of medical emergency or a parental waiver.  Proposition 85 was similar to last year’s Proposition 73, which lost by a six percent margin.  Opponents of the measure argued it would endanger at-risk minors and threaten privacy rights.  In 1997, the California Supreme Court struck down as violative of the right of privacy guaranteed by article I, section 1, of the California Constitution, a law requiring minors to obtain parental consent or court approval prior to an abortion.  American Academy of Pediatrics v. Lungren, S041459.

On Monday, the Court of Appeal, Second Appellate District upheld the validity of California’s “security freeze” law, section 1785.11.2 of the California Civil Code, but nonetheless enjoined under the First Amendment its application to the U.D. Registry (“U.D.”), a provider of credit reports drawn in material part from public records.  U.D. Registry, Inc. v. State of California, B179653 & B186012 (October 30, 2006).

California’s Security Freeze Law

Section 1785.11.2, authored by Senator Debra Bowen, was enacted to enhance protection of consumers from identity theft by allowing them to place fraud alerts on their credit reports and to prevent or control the release of those reports, and by prohibiting specified government and business uses of social security numbers.

The security freeze law provides, among other things, that “[a] consumer may elect to place a security freeze on his or her credit report by making a request in writing by certified mail to a consumer credit reporting agency.”  If such a security freeze is in place, “information from a consumer’s credit report may not be released to a third party without prior express authorization from the consumer.”  A consumer credit reporting agency has five business days to place a freeze on a credit report after receiving a written request.

Section 1785.11.2 was intended in part to shift some of the identity theft burden from consumers to credit reporting agencies.  Also of concern to California lawmakers, as noted by the U.D. Registry court, was “a consumer’s right to control the use of his or her personal and financial information.”