Posts Tagged ‘Nevada’

Nevada data encryption law

On October 1 a new law went into effect in Nevada requiring businesses to encrypt all “personal identifying information” (things like Social Security and drivers’ license numbers and credit card numbers) of customers in email and “electronic transmissions” more generally. The law has raised concern among, e.g., law offices and medical providers which often work with client documents containing such numbers; it will now be unlawful (say) to email such documents from a professional’s workplace to his or her home office absent encryption. Howard Marks at Information Week (Oct. 13):

Electronic transmission isn’t defined, so one interpretation would include the telephone — so if you forget the password to your online banking account, your bank will have to snail mail or fax you a new one. It does say “to a person outside of the secure system of the business,” so you don’t have to run out and encrypt all your disks like the vendor that brought this to my attention would like.

Don Sears at Baseline (Sept. 19) cites a Las Vegas lawyer on such problems with the law as “the lack of coordination with industry standards and the unclear nature of penalties both criminal and civil” and concludes “once again, the legal system and the IT industry are faced with potentially bigger compliance and liability issues than they probably intended.” At Davis Wright Tremaine’s Privacy and Security Law Blog (Feb. 27), Randy Gainer cites similar (but not identical) mandates moving forward in other states and also notes, “the overwhelming majority of reports of stolen and lost consumer data relate to stored data, not data in transit…. The limited, data-in-transit, encryption mandate in the Nevada statute will therefore do little to stem the tide of stolen and lost consumer data.” Marian Waldmann at Morrison & Foerster (Oct. 2007) notes California’s more sweeping but less specific mandate for businesses to implement and maintain “reasonable security procedures and practices”, and also points out that the determination of whether an out-of-state entity dealing with Nevada residents is “doing business” in the state, and therefore subject to legal mandates of this sort, has been described by the Nevada Supreme Court itself as “often a laborious, fact-intensive inquiry resolved on a case-by-case basis” in litigation. Other commentary: Sidley Austin, Lori MacVittie/DevCentral.

Next: Esquire magazine vs. all those lawyers?

The developer of a $3.9 billion casino resort on the Las Vegas Strip with the proposed name Cosmopolitan is being sued for trademark infringement by Hearst, publisher of Cosmopolitan magazine. A local IP attorney not involved with either side says the claim could “go either way” and is “not a frivolous lawsuit”. Does this mean there is evidence that the casino people were seeking to sow confusion about which business was which, or just that another valuable English word is falling prey to the trademark Enclosures? (Arnold Knightly, “Fashion mag publisher sues Strip project”, Las Vegas Business Press, Jul. 2).

Vegas columnist, sued for libel, declares bankruptcy

John L. Smith, whom the Las Vegas Review-Journal describes as its most widely read columnist, “has filed for bankruptcy after a two-year legal battle” with casino owner Sheldon Adelson, a subject of Smith’s 2005 book “Sharks in the Desert: The Founding Fathers and Current Kings of Las Vegas.” The newspaper wasn’t sued. Smith concedes the muckraking book contained inaccuracies about Adelson but takes issue with the tycoon’s claim of damages, pointing out that Adelson has mounted from 15th to 6th richest man in the world in the Forbes standings since the book’s publication, “so it’s hard to see how he has been harmed.” Barricade Books, associated with the late Lyle Stuart, also filed recently for bankruptcy. (A.D. Hopkins, “Columnist pursues bankruptcy protection”, Las Vegas Review-Journal, Oct. 12) (via Romenesko).

Watch what you tell your hairdresser, cont’d

The official recruitment of cosmetologists as informants (and as intermediaries steering customers to approved “domestic-violence” programs) continues, with programs reported in Florida, Idaho, Oklahoma, Virginia, Ohio and Maine, as well as Nevada and Connecticut (see Mar. 16 and Mar. 29, 2000). It’s not just black eyes or lacerations that the salon employees are supposed to be on the lookout for, either. A customer’s protestation that “he would not like that”, as a reason to turn down a new hairstyle, might be a sign of “controlling behavior” that needs watching. (“Salons join effort to stop violence”, Bangor Daily News, Jun. 15) (via van Bakel).

Supported by a Reid

New Senate Minority Leader Harry Reid (D-Nevada) is sounding conciliatory toward the Republican majority on some issues, but not on litigation reform, where he’s hinting at a Daschle-like line of hard-core resistance. Reid appears to have plenty of friends in the Litigation Lobby: reports that of his top seven contributors, five are casino companies that operate in his home state of Nevada, while the other two are plaintiffs’ law firms SimmonsCooper (Madison County, Ill.) and Baron & Budd (Dallas) (more). The increasingly invaluable Madison County Record has more, quoting unnamed sources who tell it that Reid “has long been a regular on the SimmonsCooper corporate jet”. (“Follow the Leader: East Alton Clout”, Nov. 21). Update Dec. 7: more on Madison County Record.