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Big Brother may be at it again. Behavioral advertising - the tracking of consumer's Internet surfing activity to create tailored ads - has triggered an intense legal controversy that has law firms scrambling to stay on top of a burgeoning practice. Attorneys say that behavioral advertising is raising privacy, litigation and regulation fears among consumer advocates, the electronic commerce and advertising industries and legislators. Law firms are busy helping companies come up with a transparent way of letting consumers know that their online activities are being tracked and possibly shared. "Lawmakers and companies are having a tough time keeping up with this new frontier of Internet privacy issues, and there is growing consumer unrest about behavioral advertising, leading in some cases to consumer rebellion," said Lisa Sotto, a partner and head of the privacy and security data group in the New York office of Richmond, Va.-based Hunton & Williams. "Consumers find this type of tracking intrusive, and businesses are starting to take the consumer reaction seriously," she said. The buzz over behavioral advertising has been building since congressional hearings that were held last year, during which Congress called on Internet service providers (ISPs) to testify about a highly controversial advertising practice known as "deep-packet inspection." The practice gives companies the ability to track every Web site consumers visit and provides a detailed look at everything they're doing, such as where they're going on vacation, who is going, how much they spent on the trip and what credit card was used. But then came the first class action targeting behavioral advertising, filed against Foster City, Calif.-based NebuAd Inc., an online advertising company accused of spying on consumers from several states and allegedly violating their privacy and computer security rights. The lawsuit specifically alleges that NebuAd engaged in deep-packet inspection. Valentine v. Ne

Until now, lawsuits seeking to recover significant damages based on the loss of, or unauthorized access to, sensitive personal information have not been especially successful for plaintiffs. Most companies suffering data breaches have escaped by offering affected consumers inexpensive credit monitoring services. But two recent cases show plaintiffs a way to expose many previously safe companies to substantial claims for damages. Any company that thinks there are no risks in employing less than best practices for data privacy and security needs a wake up call. The headlines are all too familiar. Some well known consumer services company (or less known wholesale data processor) announces that millions of individual records containing names, Social Security numbers, account numbers and other sensitive information were left in a dumpster, saved to a stolen, unencrypted laptop, or stored on a misplaced USB drive or backup tape. The press is terrible, the company's stock takes a temporary plunge, and sometimes the Federal Trade Commission enters into a consent decree where the company promises to never do it again. But when affected individuals or groups of consumers tried to sue for damages, they seldom recover significant amounts. These cases have not often succeeded because the plaintiffs have been unable to prove actual pecuniary losses resulting from the security breach. Sure, if identify theft occurs the affected individuals can suffer significant emotional trauma, loss of time, etc. But Courts have been unwilling to award damages for anxiety, fear, and other emotional harm that can result from a data breach, for the risk of future identify theft, or for actual identity theft when the plaintiff could not prove that the theft occurred as a direct result of a data breach at a particular source. Most companies facing claims based on data breaches have been able to settle cheaply by offering to provide credit monitoring services, which most consumers do not use, resu

In court papers filed Wednesday, former federal prosecutor Richard Convertino called reporter David Ashenfelter's invocation of the Fifth Amendment, in an attempt to keep from having to reveal his confidential sources, both "speculative" and "unreasonable." Convertino urged the federal district court in Michigan to sanction Ashenfelter and to require him to present further evidence as to why he should not be held in contempt for his refusal at a December deposition to reveal the confidential sources. For the past two years, Convertino has been seeking Ashenfelter's testimony in hopes of boosting his Privacy Act lawsuit against the Department of Justice. Convertino claims DOJ violated the law by leaking to the press details of an investigation into Convertino's conduct during a terrorism trial. At a deposition in December, after Judge Robert Cleland in the Eastern District of Michigan ruled twice that Ashenfelter is not protected by a First Amendment reporter's privilege, the reporter invoked the Fifth Amendment right against self-incrimination.

Enterprise employees frequently use social networking tools, most notably Web-based applications. It's no surprise more organizations are wondering what happens if social networking data becomes relevant to an e-discovery investigation. How does an enterprise go about discovering and assessing Web 2.0 data? How responsible is an organization, legally speaking, for the information that's out there in the Web 2.0 world? What risks arise from e-discovery as it relates to Web 2.0 data, and how can you mitigate them? In this tip, we will look at e-discovery as it relates to Web 2.0 and consider the strongest options for minimizing risks to the organization. E-discovery basics We begin with a quick look at what e-discovery is and how it can create risk. Essentially, e-discovery is the electronic extension of the legal process of discovery, which Wikipedia defines as "the pre-trial phase in a lawsuit in which each party through the law of civil procedure can request documents and other evidence from other parties or can compel the production of evidence by using a subpoena or through other discovery devices, such as requests for production and depositions." If you're an IT person, not a lawyer, it's important to note that the rules governing the discovery process now require plaintiffs to address all electronically stored information or ESI. In other words, if your organization faces litigation, it will have to deal with the issue of e-discovery, which will entail a whole lot more than turning over some old emails. Depending upon your role in the organization, the first you may hear of this is a "notice of litigation" with perhaps a "litigation hold directive" containing a "preservation directive." Here is a generic e-discovery request below. Apart from a few limiting factors, such as subject matter, named persons and a specified time period, the scope of such a notice is likely to be broad; blame standard procedure, not some high-powered attorney pushing his or her lu

Jan 15, 2009 There may be only a handful of days left in the Bush administration, but the brouhaha over White House e-mail retention policies promises to continue right up to the last day. A federal court yesterday extended a preservation order to ensure that the outgoing administration does everything it can to recover any missing White House e-mails. The White House IT staff now has five days to scour workstations for missing e-mail before administration data records are archived on Jan. 20. The ruling, by U.S. District Judge Henry Kennedy Jr., also orders staff of the Executive Office of the President (EOP) to relinquish any digital media that may contain e-mails from March 2003 and October 2005. The legal action is the latest resulting from a lawsuit filed in September 2007 by the National Security Archive against the EOP, seeking to preserve and restore White House e-mails it alleged were missing. "There is nothing like a deadline to clarify the issues," Tom Blanton, the National Security Archive's director, said in a statement. "The White House will complain about the last-minute challenge, but this is a records crisis of its own making." The Archive, an independent nongovernmental research institute based at George Washington University, is a repository of government records and does not receive U.S. government funding. The Citizens for Responsibility and Ethics in Washington (CREW), a left-wing public advocacy group, also filed suit, but its legal action was subsequently consolidated with the Archive's legal action, which is taking place in the U.S. District Court for the District of Columbia. Last May, the White House's top tech staffer acknowledged that three months of data were missing from backup tapes. In earlier testimony before a congressional committee, White House technical staff said millions of e-mails from the past eight years could potentially have been erased. Also yesterday, Magistrate Judge John M. Facciola held an emergency status con

Federal regulators on Tuesday met to hear about whether the benefits of cloud computing justify increased regulation, as privacy activists claim, or whether such an approach would do more harm than good. "We need to be smarter about dealing with technology, and cloud computing is posing (a) risk for us," said Hugh Stephenson, deputy director for international consumer protection at the Federal Trade Commission's Office of International Affairs. The FTC convened the two-day meeting in its offices here, which follows a series of similar workshops held in previous years on topics like spam, privacy, and behavioral advertising. The agency may file lawsuits to halt "unfair or deceptive acts or practices," meaning that if cloud computing is not unfair or deceptive, the FTC would likely not have jurisdiction. To secure personal information on the cloud, regulators may have to answer questions such as which entities have jurisdiction over data as it flows across borders, whether governments can access that information as it changes jurisdiction, and whether there is more risk in storing personal information in data centers that belong to a single entity rather than multiple data centers. The current panoply of laws at the state, national, and international level have had insufficient results; FTC Commissioner Pamela Jones Harbour cited a 2008 PricewaterhouseCoopers information security survey (PDF) in which 71 percent of organizations queried said they did not have an accurate inventory of where personal data for employees and customers is stored. With data management practices that are not always clear and are subject to change, companies that offer cloud-computing services are steering consumers into dangerous territory, said Marc Rotenberg, executive director of the Electronic Privacy Information Center. Already, problems of identity theft are skyrocketing, he said, and without more regulation, data management services may experience a collapse analogous to that

Promoting Privacy And Free Speech Is Good Business This Guide will help you make smart, proactive decisions about privacy and free speech so you can protect your customers' rights while bolstering the bottom line. Failing to take privacy and free speech into proper account can easily lead to negative press, government investigations and fines, costly lawsuits, and loss of customers and business partners. By making privacy and free speech a priority when developing a new product or business plan, your company can save time and money while enhancing its reputation and building customer loyalty and trust.

A federal judge said he will decide in the next few days whether supermarket giant Hannaford Bros. is potentially liable for damages because of a data breach that exposed more than 4 million credit and debit card numbers to computer hackers. Judge D. Brock Hornby heard arguments on Wednesday at U.S. District Court. Attorneys for Hannaford asked the judge to dismiss the lawsuit, which was filed against the Scarborough-based company last year. Attorneys for the plaintiffs said Hornby should certify the case as a class-action suit and let it proceed toward trial. The upcoming ruling will determine whether parts or all of the suit will go forward. The case boils down to a couple of central questions: To what extent are merchants responsible for securing the electronic data that gets processed with every noncash purchase, and what should the consequences be when that data is stolen? "These are fascinating and difficult issues," Hornby said after hearing the arguments Wednesday. "I'll get a written decision out to you as soon as I can." Between Dec. 7, 2007, and March 10, 2008, hackers stole credit and debit card numbers, expiration dates and PIN numbers from people shopping at Hannaford supermarkets. The grocery chain operates more than 200 stores under various names in New England, New York and Florida. More than 4 million card numbers were exposed, and by the time Hannaford publicly announced the breach, on March 17, 2008, about 1,800 fraudulent charges had been made.

Big Brother may be at it again. Behavioral advertising -- the tracking of consumer's Internet surfing activity to create tailored ads -- has triggered an intense legal controversy that has law firms scrambling to stay on top of a burgeoning practice. Attorneys say that behavioral advertising is raising privacy, litigation and regulation fears among consumer advocates, the electronic commerce and advertising industries and legislators. Law firms are busy helping companies come up with a transparent way of letting consumers know that their online activities are being tracked and possibly shared. "Lawmakers and companies are having a tough time keeping up with this new frontier of Internet privacy issues, and there is growing consumer unrest about behavioral advertising, leading in some cases to consumer rebellion," said Lisa Sotto, a partner and head of the privacy and security data group in the New York office of Richmond, Va.-based Hunton & Williams. "Consumers find this type of tracking intrusive, and businesses are starting to take the consumer reaction seriously," she said. The buzz over behavioral advertising has been building since congressional hearings that were held last year, during which Congress called on Internet service providers (ISPs) to testify about a highly controversial advertising practice known as "deep-packet inspection." The practice gives companies the ability to track every Web site consumers visit and provides a detailed look at everything they're doing, such as where they're going on vacation, who is going, how much they spent on the trip and what credit card was used. But then came the first class action targeting behavioral advertising, filed against Foster City, Calif.-based NebuAd Inc., an online advertising company accused of spying on consumers from several states and allegedly violating their privacy and computer security rights. The lawsuit specifically alleges that NebuAd engaged in deep-packet inspection. Valentine v. Ne

LOS ANGELES-Fifteen hospital workers have been fired and another eight disciplined for looking at medical records of octuplet mother Nadya Suleman without permission, hospital officials said Monday. Kaiser Permanente reported the violations of health care privacy laws to the state and has warned employees at its Bellflower facility to keep away from Suleman's records unless they have a medical purpose, said hospital spokesman Jim Anderson. "Despite the notoriety of this case, to us this person is a patient who deserves the privacy that all our patients get," Anderson told The Associated Press. Anderson would not elaborate on how the other eight employees were reprimanded, saying only that the punishments were significant. A similar privacy breach at UCLA hospitals led to celebrities' medical information getting leaked to tabloids in recent years, including details of Farrah Fawcett's cancer treatment showing up in the National Enquirer. Anderson said Kaiser does not believe any of Suleman's information was shared with the media, based on the results of their inquiry. The 33-year-old single mother of 14 gave birth to her octuplets on Jan. 26 at Kaiser's hospital in Bellflower, about 17 miles southeast of Los Angeles. Her attorney Jeff Czech said Suleman does not plan to file a lawsuit, though he suspects Kaiser employees were looking for medical information on Suleman's sperm donor. He said the name is not listed on the Advertisement medical records. "She trusts Kaiser and they said they'd look into it," Czech said. "We feel that they're on top of it and are taking care of it." Anderson could not provide details about when Suleman's medical records were accessed and by what kind of hospital employee. He said Kaiser had warned its employees about patient confidentiality rules before Suleman checked into the hospital in December. "Even though no one knew she was there, they knew she was going to have a lot of babies," Anderson said. "The extra monitoring he

In a decision that has privacy advocates and others scratching their heads, a federal judge has ruled that LifeLock has been breaking California law for years by placing fraud alerts on its customer's credit profiles. The decision is a blow to the burgeoning identify-theft protection industry, and means that companies that experience data breaches may no longer be able to offer victims free subscriptions to such services - a standard damage-control tactic in recent years. Consumers can still place fraud alerts by contacting one of the three U.S. credit reporting agencies directly. Bo Holland, founder and CEO of Debix, a competitor of LifeLock, called the ruling "dramatic and unexpected." "It causes a real shift in the industry," he told Threat Level. The pre-trial partial summary judgment comes in a lawsuit filed last year against LifeLock by Experian, one of the nation's three credit reporting bureaus. Experian claimed LifeLock is trying to "game the system" of fraud alerts to make a profit.

Defunct behavioral targeting company NebuAd did not just spur complaints by lawmakers and privacy advocates. This week, NebuAd's defense lawyers filed papers with the federal district court in San Francisco asking to withdraw as counsel in a privacy lawsuit. In a motion dated Monday, attorney Thomas Gilbertsen alleges that NebuAd is behind on its legal bills -- in some cases by more than 45 days. He also argues that because NebuAd is out of business, no officers or employees are available to help with the defense. "Because NebuAd has essentially ceased to exist, it can no longer participate in this case," states the motion. Gilbertsen also asked that the case be delayed pending NebuAd's liquidation and the resolution of creditors' claims. Gilbertsen also says in court papers that counsel and NebuAd have "irreconcilable differences." He did not elaborate in the motion or return messages seeking comment.

Veterans suffering anxiety and paranoia following the theft of a government hard drive containing the medical histories and Social Security numbers of 198,000 of their brethren cannot recover financial damages, a federal appeals court says. The 11th U.S. Circuit Court of Appeals, in largely dismissing a class-action, ruled Wednesday that the veterans could recoup at least $1,000 under the Privacy Act if they could show financial damages, not mental anguish. What's more, the Atlanta-based court noted that the veterans - some already suffering post-traumatic stress syndrome from their Vietnam War days - likely could recover damages for mental anguish associated with the data breach if the lawsuit was before a different court. That's because the courts of appeal across the nation have issued conflicting interpretations of the Privacy Act of 1974, which allows people to sue the government for privacy breaches and recover "actual damages." Precedent in the 11th Circuit, which includes Alabama, Florida and Georgia, interprets "actual damages" as money losses only. So 198,000 veterans - whose life history was on a hard drive that vanished from a Birmingham, Alabama Veterans Administration hospital - are out of luck, even if their war-time paranoia was exacerbated by the breach. The 11th Circuit noted (.pdf) that the 5th U.S. Circuit Court of Appeals and the 10th U.S. Circuit Court of Appeals "do not restrict 'actual damages' under the Privacy Act to pecuniary losses." And the Supreme Court has refused to resolve the circuit splits.

You have an unlisted phone number, you guard your personal information, you shred your financial papers- so everything is private and safe, right? Would you be alarmed to know that even when you think things are private, a perfect stranger can look you up online, see your address, birth date, past addresses, and even see a photo of your home, down to the detail of your child's play set out in the back yard? Alarmed yet? You should be. Take a look at this website: www.zabasearch.com. Simply plug your name in, and you are likely to be surprised, and probably a bit distressed to see all the information that is readily available online. How could this happen? Easy. Virtually every major change in your life is recorded somewhere in a government document. When you are born, a birth certificate is issued. When you obtain a driver's license, get married, buy a house, file a lawsuit ' all of these events are recorded in public documents easily available to you and to others. Government records are intentionally public in order to enable citizens to monitor the government and to ensure accountability in our society. The challenge is to balance the public's right to information with the individual's right to privacy.

Complimentary Webinar: Managing Data Breach Litigation You are cordially invited to attend a complimentary Webinar hosted by Debix Titled: Managing Data Breach Litigation. Proskauer Rose, Partner, Tanya Forsheit, will discuss recent developments in data breach litigation and other privacy class actions. Tanya also will discuss lessons to be learned from recent decisions and what these court opinions mean for companies facing privacy litigation. Kroll Ontrack, Senior Managing Director, Alan Brill, will provide lessons learned from the field on litigation strategies. The presentation will include practical tips on avoid litigation, getting litigation dismissed or in the unfortunate scenario of a lawsuit, winning strategies. Debix, VP of Emerging Technologies, Julie Fergerson has been working with data breached organizations for over 10 years and will moderate the call.

"The Electronic Frontier Foundation said it sued the Justice Department and other U.S. agencies to get information about their policies for using social networks including Facebook and Twitter in investigations, data collection and surveillance. The civil rights group said in a complaint filed yesterday in federal court in San Francisco that the government has used social-networking sites in conducting investigations and hasn't clarified the scope of that use or whether there are any restrictions or oversight to prevent abuses. The EFF said in its complaint that it is seeking the information to "help inform Congress and the public about the effect of such uses and purposes on citizens' privacy rights and associated legal protections." It cited news articles that reported police searching Facebook photos for evidence of underage drinking and an FBI search of an individual's home after the person sent messages on Twitter during the G-20 Summit notifying protesters of police movements. Facebook, based in Palo Alto, California, is the world's largest social networking site with more than 300 million users who post photos, messages and other information on their own free Facebook pages. Twitter, based in San Francisco, is a free Web service with 58 million users that lets people send 140- character messages, called "tweets," to multiple followers. EFF, also based in San Francisco, filed Freedom of Information Act requests with federal agencies in October. None of the agencies had completed processing the requests by the applicable 20-day deadline, according to the complaint. The lawsuit seeks a court order for the government to process the requests and produce documents."

Hospital CIOs, chief information security officers, and privacy officers are working diligently to keep their names off that wall. But they are dealing with a regulatory environment that is still in flux. A final rule that will strengthen HIPAA privacy and security safeguards is due out before the end of the year. HHS also has proposed a rule for the accounting of disclosures from electronic records. The biggest shift under way may be a new enforcement regime as the HHS Office for Civil Rights (OCR) shifts gears from only reacting to data breach reports to begin random audits of the privacy and security safeguards of large and small providers and their business associates. Another new wrinkle under the HITECH Act is that state attorneys general can file civil lawsuits for HIPAA violations.

It was only a matter of time! Auditor accuracy being examined in lawsuit may signal change in PCI and other compliance processes.

When CardSystems Solutions was hacked in 2004 in one of the largest credit card data breaches at the time, it reached for its security auditor's report. In theory, CardSystems should have been safe. The industry's primary security standard, known then as CISP, was touted as a sure way to protect data. And CardSystems' auditor, Savvis Inc, had just given them a clean bill of health three months before. Yet, despite those assurances, 263,000 card numbers were stolen from CardSystems, and nearly 40 million were compromised. More than four years later, Savvis is being pulled into court in a novel suit that legal experts say could force increased scrutiny on largely self-regulated credit card security practices. They say the case represents an evolution in data breach litigation and raises increasingly important questions about not only the liability of companies that handle card data but also the liability of third parties that audit and certify the trustworthiness of those companies. "We're at a critical juncture where we need to decide . . . whether [network security] auditing is voluntary or will have the force of law behind it," says Andrea Matwyshyn, a law and business ethics professor at the University of Pennsylvania's Wharton School who specializes in information security issues. "For companies to be able to rely on audits . . . there needs to be mechanisms developed to hold auditors accountable for the accuracy of their audits." The case, which appears to be among the first of its kind against a security auditing firm, highlights flaws in the standards that were established by the financial industry to protect consumer bank data. It also exposes the ineffectiveness of an auditing system that was supposed to guarantee that card processors and other businesses complied with the standards. Credit card companies have touted the standards and the auditing process as evidence that financial transactions conducted under their purview are secur

A surprise legal maneuver by the defense in the Sarah Palin hacking case could undermine key charges carrying the stiffest potential penalties. A lawyer for the Tennessee college student charged with hacking into the Alaska governor's Yahoo e-mail account last year says his client couldn't have violated Palin's privacy because a judge had already declared her e-mails a matter of public record. "He's not suggesting that e-mail can't be private," says Mark Rasch, a former Justice Department cybercrime prosecutor. "He's saying this particular e-mail was not private or personal because of who she is and because it wasn't intimate communication. " Additionally, photos that 20-year-old David Kernell allegedly obtained of Palin and her family were not private since the Palins are "the subjects of untold numbers of photo-ops," the lawyer argued last week, in one of a slew of motions and memorandums attacking the government's four-count federal indictment against Kernell.

Creative lawyer. The kid is still stupid. To me, It says more that Palin didn't get in trouble for using a public web mail account for State business. The kid who reads her email is on trial? What a country.

Four HIV-positive patients whose records were left behind on an MBTA train by a Massachusetts General Hospital employee are suing the hospital, claiming their privacy has been breached. In March the hospital notified 66 patients who received care at its Infectious Disease Associates outpatient practice that billing records bearing their names, Social Security numbers, doctors, and diagnoses had been lost by a manager who was riding the Red Line. She had brought the paperwork home for the weekend, but left it on the train when she returned to work the morning of Monday, March 9, according to hospital security reports. Last week two patients who are HIV-positive filed a suit in Suffolk Superior Court against the hospital and the unidentified billing manager. The unnamed plaintiffs have been joined by two other HIV-positive people. The legal action was first reported in the weekly newspaper Bay Windows. Their lawyer, John Yasi of the Salem law firm Yasi and Yasi, said in an interview he has filed a motion to make the suit a class action that could cover all 66 patients, a significant number of whom are also HIV-positive. "The damages that jump out are the emotional distress surrounding the loss of obviously very sensitive medical information and secondarily the loss of personal security information," he said. "A Social Security number in reality may lead to identity theft, which we all know is a nightmare."