Image result for CCPA class actionAs reported by Bloomberg Law, data breach class action litigation has begun under the California Consumer Privacy Act (CCPA). Filed in the Northern District of California, San Francisco Division, a putative class action lawsuit against Hanna Andersson, LLC and its ecommerce platform provider, Salesforce.com, alleges negligence and a failure to maintain reasonable safeguards, among other things, leading to a data breach. The complaint specifically seeks recovery under the CCPA – Cal. Civ. Code § 1798.100, et seq.

The complaint alleges a familiar story – in the latter part of 2019, hackers compromised the retailer’s website with malware enabling the hackers to scrape names, billing and shipping addresses, payment card numbers, CVV codes, and credit card expiration dates of thousands of the retailer’s customers. Hanna Andersson notified affected persons of the breach on January 15, 2020, and the complaint was filed on February 3, 2020.

Whether the complaint alleges sufficient harm for the case to proceed will be for the court to determine, but under the CCPA that may not be necessary.  The new California law authorizes a private cause of action against covered businesses if a failure to implement reasonable safeguards to protect personal information results in a data breach. Cal. Civ. Code § 1798.150. If successful, a plaintiff can recover statutory damages in an amount not less than $100 and not greater than $750 per consumer per incident or actual damages, whichever is greater, as well as injunctive or declaratory relief and any other relief the court deems proper.

To bring an action for statutory damages under the CCPA, consumers must first notify the business of the alleged violation. The business then has thirty days to cure the violation and provide the consumer with “an express written statement that the violations have been cured and that no further violations shall occur.” It does not appear an opportunity to cure was provided in this case. Also, the breach reportedly occurred in 2019, before the CCPA became effective (January 1, 2020).

Regardless of the outcome of this case, certainly one we will be watching, it should serve as an important reminder for businesses to ensure they have reasonable safeguards in place to protect personal information. Under California law,

A business that owns, licenses, or maintains personal information about a California resident shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the personal information from unauthorized access, destruction, use, modification, or disclosure.

Cal. Civ. Code § 1798.81.5(b).

But, the meaning of “reasonable safeguards” is not entirely clear in California.  One place to look is in the California Data Breach Report (Report) former California Attorney General, Kamala D. Harris, issued in February, 2016. According to the Report, an organization’s failure to implement all of the 20 controls set forth in the Center for Internet Security’s Critical Security Controls constitutes a lack of reasonable security.

It is not clear that adherence to those controls will provide a sufficient basis to defend a business from an action under the CCPA relating to a data breach. But, those controls might be a good place to start. It also is important to understand how those safeguards should be applied.

First, the CCPA’s private right of action for data breaches applies with respect to personal information of consumers and employees, applicants, officers, etc. Personal information of consumers and employees often resides on different systems, subject to access by different users, and collected, processed, and stored by different third party service providers. Thus, it is important to think broadly when safeguarding personal information that could trigger a class action under this section.

Second, “personal information” for purposes of the “reasonable safeguards” requirement is much narrower than the general definition of personal information for CCPA purposes. Specifically, the private right of action under Cal. Civ. Code § 1798.150 extend only to personal information, “as defined in subparagraph (A) of paragraph (1) of subdivision (d) of Section 1798.81.5.” This means:

(A)  An individual’s first name or first initial and the individual’s last name in combination with any one or more of the following data elements, when either the name or the data elements are not encrypted or redacted:

(i) Social security number.

(ii) Driver’s license number, California identification card number, tax identification number, passport number, military identification number, or other unique identification number issued on a government document commonly used to verify the identity of a specific individual.

(iii) Account number or credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual’s financial account.

(iv) Medical information.

(v) Health insurance information.

(vi) Unique biometric data generated from measurements or technical analysis of human body characteristics, such as a fingerprint, retina, or iris image, used to authenticate a specific individual. Unique biometric data does not include a physical or digital photograph, unless used or stored for facial recognition purposes.

similar cause of action exists under an Illinois privacy law that you might have heard about, the Illinois Biometric Information Privacy Act or “BIPA.” That provision has resulted in a flood of litigation, including putative class actions, seeking to recover statutory damages for plaintiffs who allege their biometric information has been collected and/or disclosed in violation of the statute. As data breaches continue to plague businesses across the country, including those subject to the CCPA, ensuring reasonable safeguards are in place may be the best defense.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Tampa, Florida, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the…

Joseph J. Lazzarotti is a principal in the Tampa, Florida, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Photo of Jason C. Gavejian Jason C. Gavejian

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy…

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy Professionals.

As a Certified Information Privacy Professional (CIPP/US), Jason focuses on the matrix of laws governing privacy, security, and management of data. Jason is co-editor of, and a regular contributor to, the firm’s Workplace Privacy, Data Management & Security Report blog.

Jason’s work in the area of privacy and data security includes counseling international, national, and regional companies on the vast array of privacy and security mandates, preventive measures, policies, procedures, and best practices. This includes, but is not limited to, the privacy and security requirements under state, federal, and international law (e.g., HIPAA/HITECH, GDPR, California Consumer Privacy Act (CCPA), FTC Act, ECPA, SCA, GLBA etc.). Jason helps companies in all industries to assess information risk and security as part of the development and implementation of comprehensive data security safeguards including written information security programs (WISP). Additionally, Jason assists companies in analyzing issues related to: electronic communications, social media, electronic signatures (ESIGN/UETA), monitoring and recording (GPS, video, audio, etc.), biometrics, and bring your own device (BYOD) and company owned personally enabled device (COPE) programs, including policies and procedures to address same. He regularly advises clients on compliance issues under the Telephone Consumer Protection Act (TCPA) and has represented clients in suits, including class actions, brought in various jurisdictions throughout the country under the TCPA.

Jason represents companies with respect to inquiries from the HHS/OCR, state attorneys general, and other agencies alleging wrongful disclosure of personal/protected information. He negotiates vendor agreements and other data privacy and security agreements, including business associate agreements. His work in the area of privacy and data security includes counseling and coaching clients through the process of investigating and responding to breaches of the personally identifiable information (PII) or protected health information (PHI) they maintain about consumers, customers, employees, patients, and others, while also assisting clients in implementing policies, practices, and procedures to prevent future data incidents.

Jason represents management exclusively in all aspects of employment litigation, including restrictive covenants, class-actions, harassment, retaliation, discrimination, and wage and hour claims in both federal and state courts. He regularly appears before administrative agencies, including the Equal Employment Opportunity Commission (EEOC), the Office for Civil Rights (OCR), the New Jersey Division of Civil Rights, and the New Jersey Department of Labor. Jason’s practice also focuses on advising/counseling employers regarding daily workplace issues.

Jason’s litigation experience, coupled with his privacy practice, provides him with a unique view of many workplace issues and the impact privacy, data security, and social media may play in actual or threatened lawsuits.

Jason regularly provides training to both executives and employees and regularly speaks on current privacy, data security, monitoring, recording, BYOD/COPE, biometrics (BIPA), social media, TCPA, and information management issues. His views on these topics have been discussed in multiple publications, including the Washington Post, Chicago Tribune, San Francisco Chronicle (SFGATE), National Law Review, Bloomberg BNA, Inc.com, @Law Magazine, Risk and Insurance Magazine, LXBN TV, Business Insurance Magazine, and HR.BLR.com.

Jason is the co-leader of Jackson Lewis’ Hispanic Attorney resource group, a group committed to increasing the firm’s visibility among Hispanic-American and other minority attorneys, as well as mentoring the firm’s attorneys to assist in their training and development. He also previously served on the National Leadership Committee of the Hispanic National Bar Association (HNBA) and regularly volunteers his time for pro bono matters.

Prior to joining Jackson Lewis, Jason served as a judicial law clerk for the Honorable Richard J. Donohue on the Superior Court of New Jersey, Bergen County.