Digital Divide Deepens: Tech Community Backs Second Circuit in Clash with Magistrates over Reach of U.S. Warrants
The technology community took aim at a recent federal magistrate’s ruling that ordered Google Inc. to comply with search warrants seeking customer emails stored on servers abroad, calling the decision “an impermissible extraterritorial application of U.S. law.” In rejecting a recent federal appeals court decision in a similar case in favor of Microsoft Corp., U.S. Magistrate Thomas J. Reuter in Philadelphia ruled that transferring emails from a foreign server to the U.S. was not tantamount to a seizure beyond American borders. The technology companies urged the court to reject the “fiction that such a foreign search and seizure is a domestic act….”
While courts and the Federal Rules of Evidence take an increasingly pragmatic approach to the question of when inadvertent disclosure of privileged information results in waiver, a recent federal magistrate’s ruling serves as a potent warning that use of a file-sharing site – without sufficient safeguards – may constitute a waiver. Harleysville Insurance Co. v. Holding Funeral Home, Inc., No. 1:15-cv-00057 (W.D. Va. Feb. 9, 2017) is the first published decision to find that the use of a file-sharing site to exchange potentially privileged information constituted a waiver of the attorney-client privilege and work product protection—because the company failed to password protect its transmission.
March 9, 2017 - Craig A. Newman wrote "Digital Privacy Rights Take A U-Turn, And Congress Needs To Act," published in Forbes on March 7, 2017. For a link, please click here. In the article, Mr. Newman looks at two recent decisions issued by federal magistrates that are contrary to the a case decided just seven months ago by the U.S. Court of Appeals for the Second Circuit in Microsoft v. United States.
Back in December of last year, we reported that for the first time, a U.S. law firm – Johnson & Bell, a mid-sized Chicago firm – was publicly named in a class action data security lawsuit. Last month, the firm obtained a significant victory in the case.
Does Facebook Have the Right to Challenge Search Warrants Seeking Facebook Users’ Data? New York’s Highest Court Hears Argument
Facebook is the latest social media giant to push back on law enforcement efforts to seek user information. On Tuesday, the New York Court of Appeals heard oral argument in a case focusing on whether Facebook has the right—or legal standing—to challenge bulk search warrants issued by the Manhattan District Attorney’s office for its users' data. The case is In re 381 Search Warrants Directed to Facebook, Inc. and Dated July 23, 2013.
The United States Court of Appeals for the Third Circuit recently ruled that a data breach class action may proceed on the basis of a Fair Credit Reporting Act (FCRA) violation alone, even where the putative class members do not allege that they were actually harmed by the breach. The ruling, which both relies on and distinguishes the Supreme Court’s recent analysis of FCRA standing in Spokeo v. Robins, suggests that at least in the Third Circuit, “injury” from a data breach may be presumed from the fact of the breach itself. This, in turn, could have the effect of expanding potential liability for any consumer-facing entity that suffers a breach.
Today, the U.S. Court of Appeals for the Eighth Circuit vacated the class action settlement between Target Corp. and consumers whose card data was compromised in the company’s 2013 data breach.
On January 23, 2017, President Donald Trump named Ajit Pai as Chairman of the Federal Communications Commission (FCC). In his previous role as the senior Republican on the FCC under President Barack Obama, Mr. Pai was an outspoken critic of the agency’s decision to assert jurisdiction over Internet Service Providers (“ISPs”) and its rules governing broadband privacy. Pai’s appointment suggests that significant changes may be on the horizon.
Last year was the first that national banks and federal savings associations subject to supervision by the Office of the Comptroller of the Currency (“OCC”) were armed with a sense of the agency’s regulatory expectations when it came to cybersecurity.
Back in December 2013, a U.S. magistrate issued a seemingly routine warrant in a narcotics case demanding that Microsoft turn over messages from a customer’s email account that resided on a server in Ireland. That warrant, which issued under a 1986 law called the Stored Communications Act (“SCA”), 18 U.S.C. § 2703, is still being debated today.
The U.S. Securities and Exchange Commission is reportedly looking into whether two data breaches at Yahoo!, Inc. should have been disclosed earlier. In a front page article today, the Wall Street Journal reported that “people familiar with the matter” say the SEC is investigating whether Yahoo!’s disclosures complied with the securities laws.
The U.S. Federal Trade Commission (“FTC”) has filed suit against Taiwan-based D-Link Corporation and D-Link Systems, Inc. (collectively, “D-Link”), manufacturers and sellers of home networking devices including routers, cameras, baby monitors, and video recorders. The lawsuit claims that D-Link failed to take reasonable steps to protect its devices from known and foreseeable risks of unauthorized access.
Hedge funds and broker dealers can expect their cybersecurity preparedness to come under scrutiny again this year by federal securities regulators.
Firing the opening salvo in its appeal of one of the most controversial data security decisions by the U.S. Federal Trade Commission in years, LabMD accused the agency of overstepping its authority and “destroy[ing] [the] small medical testing company” in the process.
In what New York’s top federal prosecutor called a “wake-up call for law firms around the world,” three Chinese citizens have been charged with hacking into the servers of two prominent – but unidentified – international law firms to steal confidential client information in connection with pending M&A deals
Today, Reuters reported that the New York Department of Financial Services (“DFS”) will delay the effective date of its new cybersecurity regulation. According to a “person familiar with the matter,” the DFS will publish a new version of the cyber security regulation on December 28, 2016, and the effective date for the rule will now be March 1, 2017.
Industry groups continued their assault yesterday on New York’s “first-in-the-nation” cybersecurity regulation by telling state lawmakers that the proposed regime was inflexible and unfairly burdened smaller institutions.
On Wednesday, Yahoo! disclosed that more than 1 billion of its users’ personal information was exposed in a newly discovered cyber-attack, making it the largest data breach reported to date. The breach apparently took place in August of 2013.
Yesterday, the Federal Trade Commission (“FTC”) announced a settlement with the owners of “dating site” AshleyMadison.com, arising from a July 2015 data breach that received broad media coverage. According to a proposed order filed in the District Court for the District of Columbia, the operators of the website are also simultaneously settling with thirteen states—including New York—and the District of Columbia.
Just weeks before the Cuomo administration’s “first-in-the-nation” cybersecurity regulation is scheduled to go into effect, the New York State Assembly Standing Committee on Banks will open a public hearing on Monday, December 19th into the controversial plan to require financial institutions that operate in New York to comply with a series of strict – and in some cases, unprecedented – data security measures.
Last week marked the first time a U.S. law firm was publicly named in a class action data security lawsuit. Originally filed in April 2016, the class action complaint in Shore v. Johnson & Bell, Ltd., 16-cv-4363 (N.D. Ill.), was unsealed last week after months of back-and-forth over whether the alleged security flaws had been patched. The complaint accuses Johnson & Bell, a mid-sized Chicago firm, of “systematically exposing confidential client information and storing client data without adequate security.” The lawsuit makes no claim that any client information has been stolen or misused. Even so, the filing of this complaint amplifies the risks already facing law firms – including reputational – at a time when data security is a top concern for law firms and their clients.
Patterson Belknap’s Privacy & Data Security Group is pleased to announce the publication of “Primer: An Overview of the New York Department of Financial Services Proposed Cybersecurity Regulation,” which includes an analysis of the proposed cybersecurity regulation and identifies priority implementation issues.
The transition of power from President Barack Obama to President-Elect Donald Trump is underway. Although President-Elect Trump did not lay out specific policy prescriptions about data privacy or consumer protection during his candidacy, his recent choice of Dr. Joshua D. Wright to lead transition efforts at the Federal Trade Commission provides some hints as to the direction the agency may take under a Trump administration.
This is the second installment in our interview with Steven Grossman, VP Strategy & Enablement at Bay Dynamics, the cyber risk analytics company. Here, Steven discusses the importance of aligning an institution’s risk profile with its cybersecurity plan and recommendations for bridging the gap between IT and the boardroom.
As part of Patterson Belknap’s continuing focus on the New York Department of Financial Services (DFS) proposed cybersecurity regulation, we sat down with Steven Grossman, VP Strategy & Enablement at Bay Dynamics, a cyber risk analytics company, to talk about cybersecurity in a highly regulated environment. In the first installment of our 2-part interview with Steven, he discusses implementation of the new regulation and the fact that organizations shouldn’t confuse regulatory compliance with effective cybersecurity planning and strategy.
This is our final installment in a three-part series examining the New York State Department of Financial Services (“DFS”) new cybersecurity regulation. In this installment, we provide an overview of the regulation’s impact on third-party vendors and business partners, including law firms.
This is our second installment in a three-part series examining the New York State Department of Financial Services (“DFS”) new cybersecurity regulation. In this installment, we provide an overview of the regulation’s impact on corporate governance and the scope of liability for corporate boards.
The Electronic Frontier Foundation (“EFF”) and the American Civil Liberties Union (“ACLU”) have weighed in on Facebook’s high-profile dispute with a social media aggregation company over whether it had unlawfully accessed Facebook’s computers. The EFF and ACLU warned the Ninth Circuit that the panel’s ruling for Facebook risks chilling important investigations and makes “potential criminals out of millions of ordinary Americans on the basis of innocuous online behavior.” The case is Facebook, Inc. v. Power Ventures, Inc., No. 13-17102.
This is the first installment in a three-part series examining the New York State Department of Financial Services (“DFS”) new cybersecurity regulation. The Patterson Belknap Privacy and Data Security Team has studied the regulation, its legislative and regulatory underpinnings, and practical consequences.
The fight between the Federal Trade Commission and LabMD, the defunct medical testing lab, entered a new chapter late yesterday. In a 13-page ruling, the U.S. Court of Appeals for the Eleventh Circuit said that LabMD’s appeal presented “a serious legal question” as to the Commission’s interpretation of Section 5 of the FTC Act and that any enforcement of the agency’s order should be stayed until the appellate process had run its course.
Earlier today, the Chinese government in Beijing approved a sweeping new cybersecurity law aimed at centralizing control over computer networks operating within China’s borders. An unofficial English translation of the newly-enacted law is available here.
We’re writing this week to highlight some of the ways in which President Obama’s evolving views on cybersecurity can help guide corporate governance on this increasingly important subject. In an interview with Wired Magazine, the President admitted that he is rethinking his own view on cybercrime: comparing it to a “pandemic” no longer addressed by traditional means such as the latest and greatest defensive technologies
The Financial Crimes Enforcement Network, or FinCEN, an arm of the United States Department of the Treasury, issued an advisory last week to remind financial institutions of their obligations to report cyber-events on Suspicious Activity Reports (SARs). While FinCEN emphasizes that its advisory does not change existing reporting requirements, it goes to lengths to discuss its “expectations” about what and how information will be reported when it comes to cybersecurity events.
Boards of directors remain increasingly exposed to the threat of liability arising from data breaches and other cyber-incidents.
Bank regulators are continuing to demand more accountability from corporate leaders when it comes to compliance with cybersecurity safeguards.
America has had a longstanding love affair with the automobile, as a manifestation of innovation and independence. The next chapter is likely the advent of the (fully or partially) autonomous vehicle.
The aftermath of Yahoo’s data breach has raised a number of questions from customers, law enforcement, and most recently six U.S. Senators.
In the midst of its acquisition by Verizon Communications Inc., Yahoo Inc. disclosed what looks like one of the largest reported thefts of user information in U.S. history.
This week, in the first post-Spokeo circuit court decision to address standing in a data breach class action, the Sixth Circuit joined the Seventh Circuit in holding that plaintiffs whose sensitive personal information has been obtained by hackers have Article III standing to sue based on the risk of future fraud and identity theft.
Banner Health recently announced that hackers may have gained “unauthorized access to patient information” and “payment card data” from approximately 3.7 million patients, health plan members, food and beverage customers, and physicians. The breach has been reported as the largest for a hospital in 2016.
Patterson Belknap litigation partners Michael F. Buchanan and Craig A. Newman will be speaking at the State Capital Group’s Annual Meeting on September 15, 2016 in Boston.
As New York public schools increase the use of technology in day-to-day operations and in the classroom, they increasingly face data management and data security threats similar to those faced by businesses and non-profit institutions.
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