The U.S. Chamber of Commerce Institute for Legal Reform has published “Ill-Suited: Private Rights of Action and Privacy Claims,” a white paper authored by Hogan Lovells’ Mark W. Brennan, Alicia Paller, Adam Cooke, and Joseph Cavanaugh explaining why private litigation is a poor enforcement tool for privacy laws. As detailed in the paper, when it comes to privacy interests, “harms” are largely inchoate and intangible, and the wrongdoers are often unknown or unidentifiable. Even where class members may have suffered a concrete injury, the data indicates that they are unlikely to receive material compensatory or injunctive relief through private litigation. Meanwhile, plaintiffs’ counsel often walks away with millions of dollars, court dockets are unduly cluttered, and companies are forced to expend resources on baseless litigation.
The California legislature is considering significant amendments to the California Consumer Privacy Act ahead of the law’s January 1, 2020 implementation date. Of particular note has been the potential for CCPA amendments to expand the private right of action beyond violations of businesses’ duty to implement and maintain reasonable security procedures to instead cover violations of any CCPA rights.
A bill introduced to amend the California Consumer Privacy Act of 2018 (“CCPA” or the “Act”) could greatly expand the risks to businesses that collect the personal information of California consumers. Senate Bill 561 (“SB 561”) would expand the CCPA’s private right of action to any violation of a consumer’s CCPA rights, remove the existing 30-day cure period, and eliminate businesses’ right to consult the AG’s office regarding compliance. SB 561 would not impact the CCPA’s current effective date of January 1, 2020.
Much of the focus on the California Consumer Protection Act (“CCPA”) has been on the new rights that it affords California consumers, including the rights to access, delete, and opt out of the sale of their personal information. But arguably the greatest risk to covered businesses involves data security, as the CCPA creates for the first time a private right of action with substantial statutory penalties for breaches involving California consumers’ personal information. This installment of the Hogan Lovells’ CCPA series explains the CCPA’s security requirement and consequences for non-compliance, and describes security controls that most organizations can implement to mitigate this risk.
This post discusses litigation exposure that businesses collecting personal information about California consumers should consider in the wake of the California Legislature’s passage of the California Consumer Privacy Act of 2018 (CCPA). The CCPA creates a limited private right of action for suits arising out of data breaches. At the same time, it also precludes individuals from using it as a basis for a private right of action under any other statute. Both features of the law have potentially far-reaching implications and will garner the attention of an already relentless plaintiffs’ bar when it goes into effect January 1, 2020.