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Antitrust UCL and Privacy

Update on SB 561: The Private Right of Action under CCPA

Jennifer M. Oliver, CIPP/US
MoginRubin LLP

On April 9, 2019, the California Senate Standing Committee on Judiciary voted 5-3 in support of advancing SB 561 out of their committee.  SB 561 would expand the private right of action under the California Consumer Protection Act (“CCPA”) beyond damages for data breaches, remove the 30-day cure period for Attorney General (“AG”) enforcement actions, and remove the AG obligation to provide compliance opinions. The bill now moves to the Senate Standing Committee on Appropriations.

Remarks

In her opening remarks, Committee Chair Senator Hannah-Beth Jackson said that without SB 561, the CCPA is doomed to become a “right without a remedy.” Sen. Jackson argued that the amendment affords consumers access to justice by allowing them to exercise their own rights under the CCPA, and ensures accountability by removing the right-to-cure provision that hinders the AG’s enforcement. She also noted that (i) the bill does not implicate the right-to-cure provision attached to the consumer enforcement provision; rather it only removes that provision for the AG, and (ii) requiring the AG to provide opinions would be burdensome and a drag on taxpayer funds.

According to Sen. Jackson, opponents of the amendment want to dilute CCPA’s impact and cater to their specific interests, for example, by seeking exemptions for certain industries. Arguments that increased privacy enforcement will stifle innovation are tiresome, said Sen. Jackson, and are contradicted by industry requests for more privacy regulation, a reference to Facebook. Profit, she argued, cannot come at expense of values and priorities of people the legislators represent, and if privacy is incompatible with a company’s business model, it is time to innovate. In fact, she said, companies that promise their customers privacy are flourishing.

A representative of the AG’s office noted that the CCPA offers protection for consumers but also presents serious workability challenges for the AG’s office. It is too difficult, he said, for the AG to carry out enforcement duties under the CCPA as written.

The California Chamber of Commerce, on the other hand, argued in opposition to SB 561, stating that CCPA will be challenging to implement for the AG and for businesses because the law is a “moving target” and regulations won’t be finished until after enforcement starts.  Numerous other organizations voiced opposition as well.

Debate

In the debate following the opening statements, one senator pointed out that the term “cure” is not defined in the statute, leaving as an open question the standard to be met to achieve a cure. 

The AG’s office pointed out that there are other statutory provisions with a similar right to cure that the they have looked to for guidance, for example the Labor Code.

Finally, Sen. Jackson suggested that upcoming rulemaking can clarify the definition of the term “cure.” Other senators were skeptical that regulations can resolve these issues, warning that courts may be left to resolve it instead.

Alternatives to private right of action

One senator suggested there might be another mechanism for enforcement, similar to that in the CA Bus. Prof. Code 17200, under which a public official is authorized to enforce the law. If something similar were incorporated in the CCPA, he argued, the individual private right of action could be removed, and a city, county, or district attorney would be entitled to enforce in lieu of private plaintiffs.

The Vote

The hearing concluded with a vote on whether to advance the bill out of the Standing Judiciary Committee and send it to the Standing Appropriations Committee. The vote passed with five yeas and three nays, but with several senators noting that while they support advancing the bill they are not in support of the proposed measure its “current state.”

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