Data security is big news. And so is the Federal Trade Commission (“FTC”). Put the two together in a crucible of litigation, and it is sure to be a blockbuster. That is what the closely-watched case FTC v. Wyndham, now pending before the Third Circuit Court of Appeals, is shaping up to be.
Authors: Roger Cohen, Paul Hamburger, Kristen Mathews, Ellen Moskowitz, Richard Zall Anthem Inc. (Anthem), the nation’s second-largest health insurer, revealed late on Wednesday, February 4 that it was the victim of a significant cyber attack. According to Anthem, the attack exposed personal information of approximately 80 million individuals, including those insured by related Anthem companies.
The Court hearing the Target data security breach litigation issued a ruling on December 2, 2014, largely denying Target’s motion to dismiss the Consolidated Amended Class Action Complaint in the Financial Institutions Cases. In his decision, Judge Magnuson found that Target owed the issuer banks a duty to protect customer data from hackers, a determination that… Continue Reading
Data security seems to make headlines nearly every week, but last Friday, a new player entered the ring. The Federal Communications Commission (“FCC”) took its first foray into the regulation of data security, an area that has been dominated by the Federal Trade Commission. In its 3-2 vote, the FCC did not tread lightly –… Continue Reading
On September 30, 2014, California took further steps to protect the personal information of its residents by amending several sections of its breach notification and information security laws (Cal. Civ. Code §§ 1798.81.5, 1798.82 and 1798.85). The amended law, which is effective January 1, 2015, updates existing law in three significant ways: Under current law,… Continue Reading
On August 7, 2014 the PCI Security Standards Council issued new guidance to supplement PCI DSS Requirement 3.0 and help organizations reduce the risks associated with entrusting third-party service providers (“TPSPs”) with consumer payment information. More and more merchants use TPSPs to store, process and transmit cardholder data or manage components of the entity’s cardholder… Continue Reading
On July 23, 2014, the Massachusetts Attorney General announced a consent judgment with an out-of-state Rhode Island hospital, Women & Infants Hospital of Rhode Island (“WIH” or the “Hospital”), resolving a lawsuit against WIH for violations of federal and state information security and privacy laws involving the loss of over 12,000 Massachusetts residents’ sensitive patient… Continue Reading
In a world full of electronic information (not to mention hackers and identity thieves), data breaches—the loss, theft, or unauthorized access to data—are a reality for companies that collect and store personal information. Breaches can occur in myriad ways: a hacker gains access to a database or an unencrypted laptop is stolen, to name but… Continue Reading
In February of 2013, President Obama signed an executive order with the purpose of creating a cybersecurity framework (or set of voluntary standards and procedures) to encourage private companies that operate critical infrastructure to take steps to reduce their cyber risk (see our blog here). Critical Infrastructure Systems such as the electric grid, drinking water,… Continue Reading
We have heard the well-publicized stories of stolen laptops and resulting violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and we generally recognize the inherent security risks and potential for breach of unsecured electronic protected health information posed by computer hard drives. We remember to “wipe” the personal data off of… Continue Reading
Texas recently amended its data breach notification law, Tex BC. Code Ann. § 521.053, to clarify that if a data subject is a resident of a state other than Texas that has its own breach notification law, a company that does business in Texas can notify that data subject either pursuant to Texas law or… Continue Reading
As announced during the 2013 State of the Union Address, President Obama recently signed an Executive Order on cybersecurity. The primary goals of the Executive Order are to (a) improve communication between private companies and the federal government about emerging cyber threats and (b) safeguard the nation’s critical infrastructure against cyber attacks by developing and implementing… Continue Reading
Recently announced changes to the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rule represent one of the most significant developments in health care privacy law in the past 10 years. Known as the final omnibus rule, the changes were announced by the U.S. Department of Health and Human Services on January 17,… Continue Reading
For the fourth time since the Massachusetts data security regulations took effect in March 2010, the Massachusetts Attorney General’s Office (“AGO”) has settled allegations that Massachusetts-based entities violated the regulations. On January 7, 2013, Suffolk Superior Court approved consent judgments pursuant to which five entities agreed to collectively pay $140,000 to settle allegations that they… Continue Reading
As physicians, nurses, therapists and health care providers continue to utilize new smart phones, tablets, and laptops in caring for patients, the Department of Health and Human Services (“HHS”) has responded with educational videos, worksheets and guidance to help health care providers create a “culture of compliance and awareness” and to protect patients’ Protected Health… Continue Reading
The U.S. Supreme Court heard arguments last month in Clapper v. Amnesty International, a case that asks the Court to determine whether a group of lawyers, journalists, and human rights workers have standing to challenge the federal government’s international electronic surveillance program under the Foreign Intelligence Surveillance Act. The plaintiffs alleged Fourth Amendment privacy violations among… Continue Reading
The Sixth Circuit Court of Appeals recently held that a computer fraud rider to a “Blanket Crime Policy” covers losses from a hacker’s theft of customer credit card and checking account data.
On May 28th, the Commission nationale de l’informatique et des libertés (“CNIL”), the French authority responsible for data privacy, published guidance on breach notification law affecting electronic communications service providers. The guidance was issued with reference to European Directive 2002/58/EC, the e-Privacy Directive, which imposes specific breach notification requirements on electronic communication service providers. French legislator recently amended… Continue Reading
Following a two year investigation by the Massachusetts Attorney General’s Office (“AGO”), a local Massachusetts hospital has agreed to pay $775,000 to resolve allegations that it failed to protect the personal and confidential health information of more than 800,000 consumers. The investigation and settlement resulted from a data breach disclosed by South Shore Hospital in 2010,… Continue Reading
The Massachusetts Attorney General’s Office ("AGO") has entered into an Assurance of Discontinuance (the "Settlement") with a Massachusetts company after allegations that the company failed to adequately protect personal information of Massachusetts residents. The AGO alleged that an employee of Maloney Properties, Inc. ("MPI") stored unencrypted personal information on a company laptop, and failed to… Continue Reading
In a draft research paper titled "Empirical Analysis of Data Breach Litigation", three prominent scholars have collected and analyzed a sample of over 230 federal data breach lawsuits in order to deduce just what makes them tick. Romanosky, Hoffman and Acquisti examined, for example, what factual and legal characteristics made a company more likely to… Continue Reading
“Who Do You Trust” was a 1950’s game show that required players to decide whether they could rely upon the information provided by their partners to win cash prizes of $25, $50 and $75. In today’s increasingly networked environment, there’s a lot more at risk in trusting another’s information about cybersecurity. Corporations and industries complain… Continue Reading
In May 2011, Michaels Stores reported that “skimmers” using modified PIN pad devices in eighty Michaels stores across twenty states had gained unauthorized access to customers’ debit and credit card information. Lawsuits soon splattered on the specialty arts and crafts retailer, alleging a gallery of claims under the Stored Communications Act (“SCA”), the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), and for negligence, negligence per se, and breach of implied contract.
Late last month, U.S. District Court Judge Charles Kocoras dismissed some claims, but others survived. The opinion presents a broad-brush survey of potential data security breach claims, with some fine detail and local color particular to this variety of criminal data security breach.
Plaintiff customers in litigation stemming from Hannaford Brothers, Co.’s 2007 data breach were handed a partial victory by the First Circuit on October 20th. The Court held that plaintiffs’ claims for negligence and implied contract should survive Hannaford’s motion to dismiss because plaintiffs’ reasonably foreseeable mitigation costs constitute a cognizable claim for damages under Maine… Continue Reading