Newsom
SACRAMENTO — Gov. Gavin Newsom signaled his support for future tort reforms last week when he signed into law a reform of the California Invasion of Privacy Act that ends a years-long litigation spree targeting thousands of California businesses.
Newsom signed Senate Bill 690, authored by state Sen. Anna Caballero (D-Merced), on Sept. 30. In an explanation of his vote to state senators, the governor said the measure would end private CIPA lawsuits involving the law’s “pen register” and “trap-and-trace” provisions when the complaints involve websites, online applications and mobile technologies.
CIPA barred the illegal use of pen register and trap-and-trace, which refer to outgoing and incoming electronic communications tracking. The 1967 law established a private right of action for violating these legal provisions in the context of wiretapping and landline telephone communications. But in the last few years, trial attorneys have attempted to use the CIPA’s provisions against commonplace website features, to the tune of $5,000 in damages per violation.
“This measure addresses the vexatious use of CIPA lawsuits and demand letters to extract settlement money from small businesses that unwittingly install software on their websites that at times have tracked and shared the information of visitors to the site,” Newsom said in his SB 690 message.
Small businesses should be protected from “overzealous lawsuits” arising from the nearly 60-year-old law, which was written well before today’s communications technologies were in popular use, according to the governor.
“... Additional work in this area is needed, as CIPA contains other decades-old statutes that are also susceptible to abuse by aggressive litigants,” he said, adding that state lawmakers should expand legal reforms next year by striking the right balance between protecting privacy and stopping predatory litigation.
The Civil Justice Association of California (CJAC) was one of the groups applauding Newsom’s action.
“Californians pay the price when businesses are forced to spend money fighting abusive lawsuits instead of serving their customers,” the CJAC president and CEO, Jaime Huff, said in a statement emailed to the Southern California Record. “SB 690 represents meaningful progress toward protecting small businesses from CIPA lawsuits over common website technologies.”
Huff emphasized that businesses remain vulnerable to other litigation abuses associated with provisions of the CIPA – and that such lawsuits drive up the cost of doing business in the state.
“If lawmakers are serious about affordability, they must build on this progress and make tackling lawsuit abuse a priority,” she said.
The coalition called Stop CIPA Shakedown Lawsuits indicated that SB 690 passed the state legislature without a single “No” vote. The new law, which takes effect on Jan. 1 of next year, will bring relief to thousands of businesses and nonprofits that have had to spend their limited funds fighting such litigation, they said.
“This is a meaningful step forward for organizations across California that have faced costly litigation and significant disruption, even when there is no allegation of actual harm or injury,” Andrew Kingman, general counsel of the Alliance for Legal Fairness, said in a prepared statement.
The Stop CIPA Shakedown Lawsuits coalition said it would continue working with lawmakers and others to advocate for further CIPA reforms that would reduce abusive litigation in the state.
