In distinct efforts to strengthen data security requirements, the California and Massachusetts legislatures recently passed bills affecting data breach notification requirements and data security notification, respectively.
On April 14, 2011, the California senate approved S.B. 24, requiring California businesses and agencies to notify the state attorney general if more than 500 California residents are notified of a data breach. The California bill also would require certain information be included in the notices.
While similar attempts to modify California’s data breach law have been vetoed by then-Gov. Arnold Schwarzenegger (R), the state’s new governor, Edmund G. “Jerry” Brown, Jr. (D) may likely sign S.B. 24. The bill also would amend the substitute notice provisions for breaches to require placing a notice that a breach has occurred on the business’s website and in major statewide media and notifying the California Office of Privacy Protection.
While California’s current breach notice statute does not specify the information that must be included in an individual breach notification, S.B. 24 would mandate the notice include, among other things, the type of information breached, the time of the breach, and a toll-free telephone number of major credit reporting agencies.
On April 13, 2011, Massachusetts H.B. 3360 was referred for committee consideration. Under the bill, vendors of photocopiers in Massachusetts that fail to adequately notify purchasers of potential data security risks would be subject to a civil fine of up to $50,000 and could be sued by customers whose personal information is subsequently compromised. Also, Massachusetts businesses that sell photocopiers must tell customers if a particular machine is equipped with a hard drive capable of retaining information from copied documents. Vendors must provide a notice stating that "the photocopier does or does not contain an eraser that deletes and destroys any previously captured picture from the copier’s hard drive.” The notice must “inform the user of the risk of retention of such private data or images.” In addition, if a machine is such a “digital copier,” the vendor also must place a “conspicuous,” written data-security warning on the top of the copier.
H.B. 3360 also authorizes the state attorney general to enforce the law by filing a civil action seeking a fine of up to $50,000. Additionally, the bill would permit a lawsuit by customers who did not receive the required notification and warnings and whose private data was subsequently “misused.”