Data Privacy

American businesses spend an average of $7.01 million on a single data breach, including the price of notifying potentially affected individuals and ensuing legal costs. As the amount of data collected from and about people explodes, the number of breaches has also grown. Companies affected by data breaches subsequently face significant enforcement by federal and state regulators, as well as litigation by opportunistic plaintiffs' lawyers. Data privacy, as a result, is predicted to become “the new asbestos.” Reforms can help curb unreasonable costs to businesses while still providing relief to those who have truly been harmed. Read More...

Information holders no longer just have to worry about whether employees are disposing of data correctly—from domestic hackers to hostile foreign governments, cyberattacks have grown in number and in sophistication. As businesses work to navigate the evolving landscape, they find themselves bombarded by federal and state regulators using outdated laws, to plaintiffs seeking large settlements despite showing no actual injury from a data breach.

It is unclear for businesses what the scope of their liability is and to whom. The U.S. has a patchwork of federal laws intended to protect personal information. At the same time, states laws continue to evolve, imposing different (and sometimes contradictory) requirements for data privacy, including when and how victims of data breaches must notify their customers. Regulators have struggled to keep pace with the rising number of incidents and individuals’ concerns, with the result being a piecemeal, hastily-assembled legal regime.

A standard federal law governing breach notification requirements, preempting state laws, would provide much-needed predictability for businesses and protect them from abusive and overlapping enforcement. There is public support for this commonsense solution. Only those who are actually at risk or who have been harmed by a data breach should get notice or be able to sue.

Moreover, vague laws prohibiting unfair and deceptive practices, from Section 5 of the Federal Trade Commission (FTC) Act to similar state laws, are ripe for abuse; the FTC and some state attorneys general have broadly wielded them to go after businesses’ privacy and security practices. To make matters worse, individual and class action plaintiffs, led by the plaintiff’s bar, have jumped on the bandwagon as well.

It is important that privacy laws address real harms and actual injury and place reasonable limits on liability while discouraging meritless suits that simply take advantage of businesses. Holding businesses to impossible standards and allowing excessive and duplicative litigation hurts Americans and the economy.

Suggested Resources

Research
  • Torts of the Future: Addressing the Liability and Regulatory Implications of Emerging Technologies

    Torts of the Future: Addressing the Liability and Regulatory Implications of Emerging Technologies

    March 29, 2017

    Torts of the Future examines the emerging technology sectors of autonomous vehicles, commercial drones, private space exploration, the "sharing economy," and the Internet of Things, and assesses the existing regulatory and litigation environments and future liability trends for each. The paper also draws from experience in each area to present guiding principles for addressing the liability and regulatory implications of emerging technologies. Read More

  • Engineered Liability: The Plaintiffs' Bar's Campaign to Expand Data Privacy and Security Litigation

    Engineered Liability: The Plaintiffs' Bar's Campaign to Expand Data Privacy and Security Litigation

    April 19, 2017

    As data breaches are becoming more commonplace, the plaintiffs' bar is engineer a staggering expansion of liability in the areas of privacy and data security. Class action lawyers are pursuing data privacy cases and amassing fortunes even where no one has been harmed. This paper examines the data privacy and security legal landscape, plaintiffs' bar tactics, major cases and settlements, and a suggested framework for reform. Read More

All Results for Data Privacy

  1. In the News Today - October 27, 2015

    October 27, 2015 | News and Blog

    A BloombergView editorial today calls for reining in the U.S. Securities and Exchange Commission's in-house administrative courts: "Some have likened the SEC's quasi-judicial system to a kangaroo court. Even if it isn't, it has the potential to become one. It should be restrained before it does too much damage." (BloombergView)... Read More

  2. A Perilous Patchwork: Data Privacy and Civil Liability in the Era of the Data Breach

    October 27, 2015 | Research

    This paper provides an overview of the patchwork of civil liability that U.S. companies face over data breaches, including actions by federal regulators, state attorneys general and private plaintiffs.... Read More

  3. ILR Summit Series: Is data privacy the next lawsuit megatrend?

    October 26, 2015 | News and Blog

    Data privacy is a hot topic. With popular companies like Target and Uber facing class action lawsuits over data breaches and new hacks occurring every single day, customers and businesses alike are concerned about data privacy – and the lawsuits that come with data breaches.... Read More

  4. Lawsuit Ecosystem II: New Trends, Targets and Players

    December 04, 2014 | Research

    This report, authored by a distinguished group of practitioners, explores the evolving lawsuit "ecosystem." It considers how plaintiffs' lawyers generate litigation and significant developments that will spur more lawsuits or rein in excessive liability.... Read More

  5. Perils and Pitfalls: Social Media Law and the Workplace

    October 21, 2014 | Research

    This paper discusses why and how the increase in workplace social media use presents U.S. employers with considerable risks. The uncertain legal environment created by the inconsistency among state privacy statutes and recent ad hoc social media rulings by the NLRB make social media a high risk area for U.S. businesses.... Read More

  6. A Peek Inside The New Data Privacy Lawsuit Playbook

    November 12, 2013 | News and Blog

    When a blogger revealed that Facebook tracked users even after they had logged off from Facebook's service, the company thanked him and promised an immediate fix. But plaintiffs' attorneys socked the company with a class action seeking $15 billion in damages for alleged privacy violations, a number just shy of what Facebook raised in its IPO.... Read More

  7. New Research on Lawsuit Trends Headlines Chamber's Legal Reform Summit

    October 23, 2013 | Press Release

    ILR today identified asbestos, class-action, data privacy, and False Claims Act lawsuits among the leading lawsuit trends, in a paper released at its 14th Annual Legal Reform Summit. ... Read More

  8. The New Lawsuit Ecosystem: Trends, Targets and Players

    October 23, 2013 | Research

    Authored by a distinguished group of practitioners, this report examines the developing lawsuit "ecosystem" and areas of litigation of most concern to the business community.... Read More