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Current Trends in Data Security Litigation
Pressed by new security breach disclosure laws, companies and universities have been compelled to disclose quite a number of security breaches in recent years. One of the first highly publicized data security breaches involved the consumer information broker, ChoicePoint Inc., which announced in 2005 that criminals posing as legitimate businesses accessed the personal information of more than 145,000 individuals. Following the ChoicePoint incident, a cascade of personal data security breaches became public, involving companies such as BJ's Wholesale Club, LexisNexis, and MasterCard International, which suffered a security breach affecting more than 40 million credit cards stemming from unauthorized access to the computer network of CardSystems Solutions, an Arizona-based company that processes credit card payments. Subsequently, both CardSystems and ChoicePoint settled their data breach charges with the FTC, agreeing, among other things, to implement new data security procedures, obtain independent data security audits bi-annually for 20 years, and, in the case of ChoicePoint, pay millions of dollars in civil penalties. See, FTC press releases, available at http://ftc.gov/opa/2006/02/cardsystems_r.htm and www.ftc.gov/opa/2006/01/choicepoint.htm.
Both companies continue to face civil lawsuits filed in the California courts, with plaintiffs seeking injunctive relief and damages stemming from the data security breaches. In the ChoicePoint consolidated class action litigation, the California district court dismissed two claims, but ChoicePoint still faces claims under the federal Fair Credit Reporting Act ('FCRA') and the California Credit Reporting Agencies Act ('CCRAA'), among others. See, Harrington v. ChoicePoint Inc., No. 05-cv-1294 MRP (JWJx) (C.D. Cal., Sept. 15, 2005). CardSystems faces a similar suit in California Superior Court, with plaintiffs alleging that the defendants violated certain provisions of the state's data protection statute, namely Cal. Civ. Code '1798.81. See, Parke et al. v. CardSystems Solutions, Inc., No. CGC-05-44264 (S.F. Cty. Super. Ct., First Am. Comp., filed July 6, 2005).
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.