Privacy & Information Security Law Blog

On March 27, 2024, the U.S. Cybersecurity and Infrastructure Agency (“CISA”) released an unpublished version of a Notice of Proposed Rulemaking (“NPRM”), as required by the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (“CIRCIA”). The NPRM will be officially published on April 4, 2024, and comments are due by June 3, 2024. Pursuant to the proposed rules, “covered entities” would be required to report (1) “qualifying cyber incidents,” (2) ransom payments made in response to a ransomware attack, and (3) any substantially new or different information discovered related to a previously submitted report to CISA. Covered entities are required to notify CISA within 72 hours in the event of a qualifying cyber incident and within 24 hours, in the event that payment is made in response to a ransomware attack.

On February 21, 2024, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) entered into a resolution agreement and corrective action plan with Green Ridge Behavioral Health LLC (“GRBH”) stemming from the organization’s failure to comply with the Privacy and Security Rules of the Health Insurance Portability and Accountability Act (“HIPAA”) and subsequent failure to protect against a 2019 ransomware attack that impacted the personal health information (“PHI”) of more than 14,000 patients. This marks the second such settlement with a HIPAA-regulated entity for violations that were discovered following a ransomware attack, according to HHS.

On February 1, 2024, the Federal Trade Commission announced a proposed settlement with Blackbaud Inc. (“Blackbaud”) in connection with alleged security failures that resulted in a breach of the company’s network and access to the personal data of millions of consumers. As part of the settlement, Blackbaud will be required to comply with a variety of obligations, including deleting personal data that the company does not have a need to retain.

On January 18, 2024, the European Data Protection Board published a thematic one-stop-shop (“OSS”) case digest titled, “Security of Processing and Data Breach Notification” (the “Digest”). The Digest analyzes a selection of decisions adopted by EU data protection authorities on data security and data breaches. 

On December 14, 2023, the Court of Justice of the European Union (“CJEU”) issued its judgment in the case of VB v. Natsionalna agentsia za prihodite (C‑340/21), in which it clarified, among other things, the concept of non-material damage under Article 82 of the EU General Data Protection Regulation (“GDPR”) and the rules governing burden of proof under the GDPR.

On November 23, 2023, the UK government’s National Cyber Security Centre (“NCSC”) and the Republic of Korea’s National Intelligence Service (“NIS”) issued a joint advisory detailing techniques and tactics used by cyber actors linked to the Democratic People’s Republic of Korea (“DPRK”) that are carrying out software supply chain attacks. The publication follows the recent announcement of a new Strategic Cyber Partnership between the UK and the Republic of Korea where the two nations have committed to work together to tackle common cyber threats.

Glass Lewis & Co. recently published its updated Benchmark Policy Guidelines for 2024 (the “Policy”), which reflect investors’ continuing focus on corporate disclosure and board oversight of cyber risks. The Policy indicates that Glass Lewis may recommend “against” directors following a cybersecurity incident if it finds the board’s risk oversight or its post-incident response to be insufficient. The Policy also provides guidance on what Glass Lewis expects companies to disclose after such an incident.  

On October 31, 2023, the Department of Health and Human Services (“HHS”) announced the issuance of a settlement agreement with Doctors’ Management Services (“DMS”), a Massachusetts-based medical management company, related to alleged violations of the Health Insurance Portability and Accountability Act’s (“HIPAA’s”) Privacy and Security Rules (collectively, the “HIPAA Rules”). DMS is a HIPAA business associate (“BA”) that provides payer credentialing and medical billing services to HIPAA Covered Entities (“CEs”). 

On October 5, 2023, Blackbaud Inc., a software provider for the philanthropy, healthcare, and education sectors, has resolved claims that the District of Columbia and 49 U.S. states raised. The claims stem from a ransomware attack that impacted Blackbaud in 2020. The company was affected by a ransomware attack that exposed user information to unauthorized third parties. The breach not only impacted approximately 13,000 Blackbaud customers, but the customers’ own clients and donors as well.

On February 16, 2023, the National Credit Union Administration (“NCUA”) Board unanimously approved a final rule requiring federally insured credit unions (“FICUs”) to notify the NCUA as soon as possible, within 72 hours, after an FCIU “reasonably believes” that a reportable cyber incident has occurred.

On December 20, 2022, the English High Court has granted the victim of a cyber attack a permanent injunction against cyber attackers whilst the victim organization maintains its anonymity. Generally, a claimant's identity is public in English court proceedings. Injunctions can be made against unknown and unidentifiable defendants enabling them to be granted against individuals who are acting in breach or threatening to commit a breach. 

On November 30, 2022, the UK government confirmed that the Network and Information Systems (“NIS”) Regulations 2018 (“NIS Regulations”) will be strengthened to protect essential and digital services against cyber attacks. The changes bring providers of outsourced IT and managed service providers (“MSPs”) into scope of the NIS Regulations. The announcement comes in response to a public consultation held in January this year.

The Cybersecurity and Infrastructure Security Agency (“CISA”) recently released a draft of the agency’s Cross-Sector Cybersecurity Performance Goals (“CPGs”) for critical infrastructure in the United States. The CPGs provide a common set of fundamental cybersecurity practices to guide critical infrastructure entities in measuring and improving their cybersecurity maturity.  

On October 18, 2022, the Transportation Security Administration (“TSA”) issued a new cybersecurity directive requiring passenger and freight railroad carriers to create plans for responding to cybersecurity incidents. The new directive is one of many actions taken by the Biden Administration to strengthen the cybersecurity posture of the U.S.’s critical infrastructure following a significant ransomware attack on a major U.S. pipeline in 2021.

On October 24, 2022, the UK Information Commissioner’s Office (“ICO”) issued a £4.4 million fine to Interserve Group Limited for failing to keep employee personal data secure, which violates Article 5(1)(f) and Article 32 of the EU General Data Protection Regulation (“GDPR”), during the period of March 2019 to December 2020. The ICO determined that such violations rendered Interserve vulnerable to the cyber attack which took place between March 2020 and May 2020, affecting the personal data of up to 113,000 Interserve employees. The compromised data included contact details, national insurance numbers and bank account details, as well as special category data, including ethnic origin, religion, details of any disabilities, sexual orientation and health information.

On October 18, 2022, the New York State Department of Financial Services (“NYDFS”) announced that EyeMed Vision Care LLC (“EyeMed”) agreed to a $4.5 million settlement for violations of the Cybersecurity Regulation (23 NYCRR Part 500) that contributed to the exposure of hundreds of thousands of consumers’ health data in connection with a cybersecurity event in 2020.

On October 12, 2022, New York Attorney General Letitia James announced that her office had secured a $1.9 million penalty from e-commerce retailer Zoetop, owner of SHEIN and ROMWE, following an improperly handled data breach. The Office of the Attorney General of the State of New York (“NYAG”) alleged in its Assurance of Discontinuance that Zoetop failed to properly handle the breach and lied about its scope to consumers.

On September 12, 2022, the Cybersecurity and Infrastructure Security Agency (“CISA”) released a Request for Information (“RFI”) seeking public input regarding the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (“CIRCIA”). The public comment period will close on November 14th, 2022. The RFI provides a “non-exhaustive” list of topics on which CISA seeks public input, including:

On July 26, 2022, the attorneys general of New Jersey, Pennsylvania, Delaware, Maryland, Virginia, Florida and Washington D.C. announced an $8 million multistate settlement with Wawa Inc. that resolves the states’ investigation into a 2019 data breach that compromised approximately 34 million payment cards used by consumers at Wawa stores and fueling locations. 

On July 29, 2022, the New York Department of Financial Services (“NYDFS”) posted proposed amendments (“Proposed Amendments”) to its Cybersecurity Requirements for Financial Services Companies (“Cybersecurity Regulations”). The Proposed Amendments would expand upon the set of prescriptive cybersecurity requirements applicable to all covered financial institutions, as well as impose more stringent requirements for “Class A Companies” (as defined below). There will be a brief pre-proposal comment period, followed by the official publication of the Proposed Amendments, which will trigger a new 60-day comment period. Below are the key changes introduced by the Proposed Amendments.

On July 1, 2022, amendments to Florida’s State Cybersecurity Act (the “Act”) took effect, imposing certain ransomware reporting obligations on state agencies, counties and municipalities and prohibiting those entities from paying cyber ransoms.

On June 24, 2022, the New York State Department of Financial Services (“NYDFS” or the “Department”) announced it had entered into a $5 million settlement with Carnival Corp. (“Carnival”), the world’s largest cruise-ship operator, for violations of the Cybersecurity Regulation (23 NYCRR Part 500) in connection with four cybersecurity events between 2019 and 2021, including two ransomware events.  

On April 5, 2022, North Carolina became the first state in the U.S. to prohibit state agencies and local government entities from paying a ransom following a ransomware attack.

North Carolina’s new law, which was passed as part of the state’s 2021-2022 budget appropriations, prohibits government entities from paying a ransom to an attacker who has encrypted their IT systems and subsequently offers to decrypt that data in exchange for payment. The law prohibits government entities from even communicating with the attacker, instead directing them to report the ransomware attack to the North Carolina Department of Information Technology in accordance with G.S. 143B‑1379.

On March 15, 2022, the Federal Trade Commission (FTC) announced a proposed settlement with custom merchandise platform CafePress in connection with the company’s alleged failure to implement reasonable security measures, and its alleged attempt to cover up a 2019 data breach. The proposed settlement would require CafePress to implement a comprehensive data security program and pay $500,000 in redress to affected individuals.

On January 5, 2022, the New York Office of the Attorney General (“NY AG”) announced the results of an investigation into “credential stuffing,” which uncovered 1.1 million compromised accounts from cyberattacks on 17 well-known companies. The announcement included a “Business Guide for Credential Stuffing Attacks,” (the “Guide”) detailing the attacks and providing tips for businesses to protect themselves.

On December 15, 2021, the New Jersey Acting Attorney General Andrew J. Bruck announced that its Division of Consumer Affairs had reached a $425,000 settlement with New Jersey-based providers of cancer care, Regional Cancer Care Associates LLC, RCCA MSO LLC and RCCA MD LLC (collectively, “RCCA”), over alleged failures to adequately safeguard patient data.

On November 8, 2021, law enforcement agencies in both the United States and European Union announced that a series of actions, including a number of arrests, were taken against the Russia-linked ransomware group, “REvil.” The U.S. Department of Justice (the “DOJ”) unsealed documents relating to an August indictment against two individuals in Dallas for alleged involvement in REvil ransomware attacks against several U.S. businesses. The European authorities, Europol, also announced that police in Romania and South Korea had arrested five people alleged to be REvil affiliates.

On October 12, 2021, New Jersey Acting Attorney General Andrew J. Bruck and the Division of Consumer Affairs announced a settlement with Diamond Institute for Infertility and Menopause, LLC, over a data breach that compromised the personal information of 14,663 patients, including 11,071 New Jersey residents. The Division of Consumer Affairs alleged that the fertility clinic violated the New Jersey Consumer Fraud Act and the federal Health Insurance Portability and Accountability Act’s (“HIPAA”) Privacy and Security Rules by removing protected health information (“PHI”) safeguards.

On September 22, 2021, Secretary of Homeland Security Alejandro N. Mayorkas and Secretary of Commerce Gina Raimondo released a joint statement on the Department of Homeland Security’s (“DHS’s”) issuance of preliminary Critical Infrastructure Control Systems Cybersecurity Performance Goals and Objectives (the “Preliminary Goals”). As we previously reported, on July 28, 2021, the Biden Administration signed a National Security Memorandum on Improving Cybersecurity for Critical Infrastructure Control Systems (the “Memo”), which instructed DHS to lead the development of cybersecurity performance goals for critical infrastructure firms. The Memo described the initiative as “a voluntary, collaborative effort between the Federal Government and the critical infrastructure community to significantly improve the cybersecurity of these critical systems.”

On September 21, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an Updated Advisory on Potential Sanctions Risks for Facilitating Ransomware Payments (the “Updated Advisory”) on the sanctions risks associated with facilitating ransomware payments.

On July 30, 2021, the UK High Court handed down its judgment in the case of Warren v DSG Retail Ltd [2021] EWHC 2168 (QB), determining that the claimant could not seek damages on the basis of misuse of personal information, breach of confidence or common law negligence following a data breach.

On July 20, 2021, the U.S. Department of Homeland Security’s (“DHS’s”) Transportation Security Administration (“TSA”) announced a new Security Directive (the “Second Directive”) requiring owners and operators of certain critical pipelines transporting hazardous liquids and natural gas to implement specific cybersecurity measures. This Second Directive builds on the TSA’s earlier directive of May 27, 2021, on which we previously reported.

On July 28, 2021, President Biden signed a National Security Memorandum entitled “Improving Cybersecurity for Critical Infrastructure Control Systems” (the “Memorandum”). The Memorandum formally establishes an Industrial Control Systems Cybersecurity Initiative and directs the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (“CISA”) and the Department of Commerce’s National Institute of Standards and Technology (“NIST”), in collaboration with other agencies, to develop and issue cybersecurity performance goals for critical infrastructure. The Memorandum follows recent high-profile attacks on U.S. critical infrastructure, including ransomware attacks on Colonial Pipeline and JBS Foods.

On May 27, 2021, the U.S. Department of Homeland Security’s (“DHS”) Transportation Security Administration (“TSA”) announced a Security Directive (the “Directive”) that will impose new cybersecurity requirements on critical pipeline owners and operators.

On April 9, 2021, the First-Tier Tribunal of the General Regulatory Chamber stayed proceedings in Ticketmaster UK Limited’s (“Ticketmaster’s”) appeal against a fine issued by the UK Information Commissioner’s Office (“ICO”) until 28 days after a judgment in civil litigation brought by 795 customers against Ticketmaster. The group action, which relates to the breach for which Ticketmaster was fined by the ICO, is currently before the High Court in England. As a result of the stay in proceedings, the appeal likely will not be heard before the Tribunal until mid to late 2023.

On March 3, 2020, the New York Department of Financial Services (“NYDFS”) announced it had entered into a settlement with Residential Mortgage Services, Inc. (“RMS”) related to allegations that RMS violated the NYDFS Cybersecurity Regulation in connection with a 2019 data breach.

As reported on the Hunton Insurance Recovery blog, on February 4, 2021, the New York Department of Financial Services (“NYDFS”), which regulates the business of insurance in New York, has issued guidelines, in the Insurance Circular Letter No. 2 (2021) regarding “Cyber Insurance Risk Framework” (the “Guidelines”), calling on insurers to take more stringent measures in underwriting cyber risks. In the Guidelines, NYDFS cites the 2020 SolarWinds attack as an example of how managing growing cyber risk is “an urgent challenge for insurers.”

On February 16, 2021, the New York Department of Financial Services (“NYDFS”) issued a Cyber Fraud Alert (the “Alert”) to regulated entities in light of a growing campaign to steal Nonpublic Information (“NPI”), as defined under New York law, from public-facing websites that provide instant quotes for products like auto insurance (“Instant Quote Websites”).

On January 27, 2021, the French Data Protection Authority (the “CNIL”) announced (in French) that it imposed a fine of €150,000 on a data controller, and a fine of €75,000 on its data processor, for failure to implement adequate security measures to protect customers’ personal data against credential stuffing attacks on the website of the data controller. The CNIL decided not to make its decisions public, thereby not disclosing the name of the companies sanctioned.

On November 13, 2020, the UK Information Commissioner’s Office (“ICO”) fined Ticketmaster UK Limited (“Ticketmaster”) £1.25 million for failing to keep its customers’ personal data secure. The ICO found that Ticketmaster had failed to implement appropriate security measures to prevent a cyber attack, breaching the requirements of Articles 5(1)(f) and 32 of the EU General Data Protection Regulation (“GDPR”). The ICO acted as the lead supervisory authority with regard to the cross-border processing affected by this breach, and the penalty has been approved by the other EU data protection authorities through the GDPR’s cooperation process. Ticketmaster has indicated that it will appeal the fine.