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Information relevant to breaches.

You are now Liable for Unintentional Medical Data Breach In NY State

A New York State Appellate Court has recently upheld a $365,000 jury award against a health care center that mistakenly disclosed information regarding a patient’s medical information…. She gave instructions to Surgi-Center never to call her at home despite providing them with her home telephone number on questionnaire forms. A day after the procedure, a nurse called the number provided to inquire about her condition and to confirm that she had no subsequent medical complications…. In a 3-2 decision, the Court held that the plaintiff be awarded punitive damages for an unintentional breach of confidential medical information even if there was no malice or malicious behavior by the defendant. As a result, the 2nd Department of New York has expanded the scope of punitive damages to include unintentional medical disclosure regardless of whether the act was done in good-faith…. Even though the medical center’s actions were not malicious, intentional or done in bad faith, disclosing the plaintiff’s medical information was grossly negligent and wanton behavior…. The Court here is clearly concerned with instances of wrongful medical disclosure and shows itself to be in sync with state and federal legislative efforts to protect confidential information. The opinion does not discuss violations of federal privacy laws such as the Health Insurance Portability and Accountability Act (HIPPA)…. Court cases like this highlight the need for companies to enact strong compliance rules that clearly describe the conditions in which data can be disclosed.

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Do Data-Breach Laws Give You The Power to Hold Corporations Liable?

Recently, state governments have begun to change this by imposing liability on the retail business and others, thereby opening the door for consumers to sue companies that do not adequately protect the personal information that they collect…. In the meantime, we’re going to ignite our series of articles exploring these laws and developments by analyzing some recent events.Minnesota PCI LegislationEffective August 1st 2007, Minnesota became the first state to require that all companies handling credit and debit card data comply with the Payment Card Industry (PCI) data security standard (in a future article or podcast, we’ll explore and debate the value of tying the PCI standard to the legislation – Michael).The state’s new Plastic Card Security Act would prohibit a company from retaining a credit card’s security code data, the PIN verification code number, or the full contents of any track of magnetic strip data…. In Pisciotta v. Old Nat’l Bancorp, the court held that there was no state statute supporting the compensation of incurred costs because “had the Indiana legislature intended that a cause of action should be available against a database owners for failing to protect adequately personal information, we believe it would have made some more definite statement of that intent.” So for the time being, unless you have an actual showing of harm as a victim of identity theft, potential harm will not suffice.Consequences for the Courts As more states begin to enact legislation that requires companies to comply with PCI, courts may begin to allow litigants to be compensated as a result of a security break. The argument that courts have made in cases like Pisciotta will clearly be much weaker as states legislatures conspicuously demonstrate their intent to punish companies by enacting specific statutes targeting the security of personal information…. Clearly, there is a way for the legislature of any state to write a statute that can pressure companies to improve their data security standards without crippling small business owners. While the retail industry will continue to resist such legislation, there is strong support from banks and credit unions, since in the eyes of consumers they often blamed for such breaches…. Depending on how the case turns out, the burdens and cost of breaches will shift away from consumers, banks, and credit unions but will perhaps be shared by the retailers and others (of course, the consumer pays in the end).Preparing for the changeAs a consequence of new state and federal legislation, the landscape of data security will continue to evolve, sometimes in seemingly dramatic fashion…. Industries that have for now been able to get away with having minimum security standards will begin to take notice of their potential liability and hopefully, will improve the way they guard information.

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