CCPA Litigation is on the Rise: Is Your Organization Prepared?
On January 1, 2020 the California Consumer Privacy Act (CCPA) took effect. Largely considered the most expansive U.S. privacy law to date, there has been much anticipation over the impact the law will have on the privacy litigation landscape. Although the California Attorney General’s (“AG”) enforcement authority only begins on July 1, this has not stopped plaintiffs from already pursuing CCPA litigation in light of the January 1 effective date.
The CCPA authorizes a private cause of action against a covered business if a failure to implement reasonable security safeguards results in a data breach. The definition of personal information for this purpose is much narrower than the general definition of personal information under the CCPA. 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. This means that plaintiffs in these lawsuits likely do not have to show actual harm or injury to recover.
As of today, there have been approximately 25 CCPA-related claims filed in state and federal court. Thus far, there are three common types of CCPA-related litigation:
Reasonably Security Safeguards. Unsurprisingly, given the limited nature of the CCPA’s private cause of action, most claims to-date have been on the basis of an alleged failure to implement reasonable security safeguards resulting in a data breach. For example, in February a putative class action was filed in the Northern District of California, San Francisco Division, against a supermarket and its e-commerce platform provider, alleging negligence and a failure to maintain reasonable safeguards, among other things, leading to a data breach. The complaint specifically seeks recovery under the CCPA – Civ. Code § 1798.100, et seq. It is worth noting that several complaints on the basis of an alleged failure to implement reasonable security safeguards were filed in light of the increase in videoconferencing platform usage in response to COVID-19. In addition, at least one complaint is based on a data breach that occurred before January. And, yet, another claim (the first CCPA case filed in federal court), was brought by a non-California resident. While many of these cases may face viability issues moving forward, they indicate the eagerness of plaintiffs and their counsel to pursue relief under the CCPA, and the likely uptick in CCPA litigation in the coming years.
Consumer Rights. The CCPA does not provide consumers with a private cause of action if their rights (g. right to notice, right to delete, right to opt out) under the statute are violated. This, however, has not stopped plaintiffs from filing claims on the basis that their rights under the CCPA have been violated. For example, in one case, the plaintiff alleged that the defendant violated the CCPA by failing to provide consumers notice of their right to opt out of sale of their personal information to a third party, and failure to provide notice of their collection and use of personal information practices.
CCPA References. In several cases, although the plaintiff is not seeking relief on the basis of a CCPA violation, the CCPA is still mentioned in connection with a different violation. For example, in a case against a videoconference provider, the CCPA is mentioned in a claim regarding a violation of the Cal. Bus. Code – Unfair Competition law, highlighting that the defendant failed to provide accurate disclosures to users on their data sharing practices and failed to implement reasonable security measures, but never explicitly alleged that the defendant violated the CCPA.
CCPA litigation is only ramping up, and organizations need to be prepared. 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. To learn more about the CCPA’s obligations and how to implement policies and procedures to ensure compliance, check out Jackson Lewis’s CCPA FAQS for Covered Businesses. For more information on what businesses can be doing to ensure they have reasonable safeguards to protect personal information, review our post on that topic.