As we noted earlier this week, Massachusetts indicated late last week it would issue its last round of amendments to its data security regulations scheduled to take effect March 1, 2010, 201 CMR 17.00. The last round of amendments are not particularly significant, although it is worth noting that, contrary to the amendments made in August, this round clarifies that the regulations cover any entity that even stores personal information of Massachusetts residents, in addition to those that receive, maintain, process, or otherwise have access to personal information. Here is the press release from the Office of Consumer Affairs and Business Regulation. Here is the final version of the Regulations. Doug Cornelius has a great analysis here. The effective date of the regulations is still March 1, 2010.
Today the Senate Judiciary Committee approved two federal data security bills, Senator Leahy's S. 1490, the Personal Data Privacy and Security Act, and Senator Feinstein's S. 139, the Data Breach Notification Act. Of course, there have been dozens of proposed federal breach notification bills over the past several years, from both sides of the aisle. Senator Leahy's office issued this statement earlier today. While we cannot predict the fate of S. 1490 and S. 139, and we will have future occasion to comment on the bills in more detail, Tanya and I wanted to highlight a few notable provisions now.
Friday was a busy day for identity theft and data security regulations. Not long after the Federal Trade Commission announced it was extending the enforcement deadline for the Red Flags Rule for the fourth time, word came from BNA's Privacy & Security Law Report that the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR) had filed with the Massachusetts Secretary of State its final amendments to 201 CMR 17.00, the state's data security regulations. BNA reported that OCABR plans to make the amendments public sometime this week. BNA further reported that there are no major changes, but that there will be some clarification with respect to contracts between persons who own or license personal information and third-party service providers (201 CMR17.03(2)(f)(2)). You can check out Dave's post on the last round of significant revisions to the regulations in August, complete with redline. We have seen a lot of activity in the blogosphere about the new changes, but nothing official yet. And so far, no announcements of further delays in the effective date, currently set for March 1, 2010. We will report as soon as we hear more information.
The FTC extended the deadline for enforcement of the Red Flags Identity Theft Rule. The new enforcement deadline is June 1, 2010. The deadline was extended at "the request of Members of Congress." www.ftc.gov/opa/2009/10/redflags.shtm
The Federal Trade Commission will begin enforcing its Red Flags Rule this Sunday, November 1. Financial institutions and creditors that hold covered accounts, as defined under the Rule, must have written Red Flags identity theft prevention programs in place by November 1. Earlier today the American Bar Association reported that a federal judge in Washington, D.C., ruled that the FTC exceeded its authority by applying the Red Flags Rule to practicing lawyers. The FTC is expected to appeal today's ruling.
On Friday, the California Court of Appeal, Fourth Appellate District, certified for publication its October 8 opinion in Pineda v. Williams-Sonoma, the most recent in a string of decisions regarding California's Song-Beverly Credit Card Act of 1971, California Civil Code § 1747.08. On first glance, Pineda appears uneventful. The Court merely reiterated its December 2008 holding in Party City v. Superior Court, 169 Cal.App.4th 497 (2008), that zip codes are not personal identification information for purposes of the Act, right? Not so fast. In fact, the Pineda court added a couple of new wrinkles that are worth a second look. First, the court reaffirmed its Party City holding even though Pineda specifically alleged that Williams-Sonoma collected the zip code for the purpose of using it and the customer's name to obtain even MORE personal identification information, the customer's address, through the use of a "reverse search" database. Second, the court held that a retailer's use of a legally obtained zip code to acquire, view, print, distribute or use an address that is otherwise publicly available does not amount to an offensive intrusion of a consumer's privacy under California law.
While there is much debate on the IT side as to whether Cloud computing is revolutionary, evolutionary or "more of the same" with a snazzy marketing label, in the legal context, Cloud computing does have a potential significant impact on legal risk. Part three of our ongoing Cloud legal series explores the relationships in the Cloud, and the potential legal implications and impacts suggested by them.
Remember Candie's shoes and Op shorts? The FTC announced yesterday that it has settled charges against Iconix Brand Group, an owner, licensor, and marketer of popular kids' apparel brands such as Candie's, Op, Mudd, and Bongo, for allegedly violating the Children's Online Privacy Protection Act (COPPA). Among other things, Iconix will pay a $250,000 civil penalty. The FTC filed its complaint and submitted its consent decree and order for approval yesterday in the Southern District of New York.
This week the federal court in the Hannaford class action asked the highest court in Maine to clarify whether cardholders' "loss of time and effort" are sufficient injuries to ground a negligence claim following a payment card security breach.