Author: TSA Press

What year was the Supreme Court Police established?

Hint: The Court is protected by the Supreme Court Police, a federal law enforcement agency headquartered in D.C., which falls under the jurisdiction of the Marshal of the United States Supreme Court.

See the answer on the next page.

By now, you have probably heard about the California Consumer Privacy Act, or “CCPA.”  Whether you agree with it or not, you need to pay close attention.  Taking a page from Europe’s General Data Protection Regulation (GDPR), the CCPA appears to be California’s answer to protecting consumer data.  Effective January 1, 2020, the CCPA will impact how businesses collecting personal information from California consumers can collect, store, and handle such personal information from them.  The issues presented by compliance with the CCPA are many, but there are a few aspects of the CCPA that may prove to be more of a problem for businesses than they may think.

It’s not hard to understand why California decided to pass the CCPA.  As I have written before here, the advent of the internet has created a mechanism whereby companies (from your internet service provider to your browser, mobile devices… even the “internet of things” or IoT) can (and do) collect, store, use, and share personal information.  Unfortunately, the level of collection and use of such data from interactions on the internet has reached epic proportions, as has the hacking of such information and its unauthorized use.  Despite such impacts, we have yet to see any type of federal legislation in the U.S. akin to the level of protection afforded to EU citizens under the GDPR.  In this vacuum, some states have passed (or are in the process of passing) laws to address the problem. Enter California and the CCPA.

The CCPA is a comprehensive piece of state legislation ostensibly designed to provide a level of protection to California consumers that is not available at the federal level.  Who has to comply?  Those for-profit businesses that (i) have an annual gross revenue of at least $25 million or more, (ii) buy, receive, sell, or share consumer data from 50,000 or more consumers, households, or devices, OR (iii) gain a majority of their annual revenue from the selling of personal data.  As you can see, such businesses do not need to be located in California.  It doesn’t take a deep dive to realize that a great many businesses in the U.S. will be impacted by this legislation given its projected application.  This point, however, is just the beginning of the challenges presented by the legislation.

For one, the CCPA takes a very broad view of “persona data” that arguably goes beyond what the GDPR requires.  Specifically, the CCPA defines “personal information” as “information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.”  Beyond the consumer’s real name, such “personal information” includes, but is not limited to, a consumer’s alias, postal address, unique personal identifier, online identifier Internet Protocol address, email address, Social Security Number, driver’s license number, and passport number. In fact, the collection of personal information includes collection from devices that are part of the IoT (such as smart thermostats, smart appliances, etc.).  Wait — we’re not done yet.  Such data includes biometric information, geolocation data, and much, much more. Broad?  You bet.  When it comes to compliance, the breadth of this definition leaves little room to argue that the information collected from California consumers does not meet the definition of “personal information” due the CCPA.

Another problem many businesses may not appreciate is the potential impact of the private right of action available under the CCPA.  Specifically, a California consumer whose “non-encrypted or non-reacted personal information” is stolen/hacked or otherwise disclosed due to the businesses’ noncompliance with the CCPA:

may institute a civil action for any of the following:

(A) To recover damages in an amount not less than one hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per incident or actual damages, whichever is greater

(B) Injunctive or declaratory relief.

(C) Any other relief the court deems proper.

Although businesses have a 30-day window after notice from the consumer of an alleged violation of their privacy rights regarding their personal information, failure to cure can incite a private right of action should the attorney general decide not to prosecute the violation.  Worse, a class action lawsuit can be brought.  Moreover, as you can see from the above language, such a claim is not limited to a breach, but in fact, can arise from noncompliance with the CCPA’s requirements including, but not limited to, failure to delete personal information (absent an applicable exception), lack of a required “Do Not Sell My Personal Information” opt-out link, etc.  Defending any such private actions (let alone any prosecution by the attorney general) can result in not just financial impact from such litigation and potential damages, but a loss of consumer confidence and trust as well.

But these are not the biggest problems presented by the CCPA — the biggest issue may arguably be change.  That’s right — although the CCPA becomes effective in January 2020, the legislation was quickly passed and has not been vetted.  There is a rising backlash within industry regarding the CCPA.  In fact, 41 privacy experts (including privacy professionals, professors, and legal practitioners) have signed onto a letter spearheaded by Prof. Eric Goldman, co-director of the High Tech Law Institute at Santa Clara University School of Law, that outlines some of the shortcomings of the legislation.  Make no mistake — the CCPA may have been passed, but it is anything but set in stone, so ongoing compliance will be a challenge, to say the least.

Only time will tell how the CCPA will shake out after it becomes effective in 2020.  That said, your company (or clients) will absolutely need to address potential CCPA application to their business.  If they haven’t done so yet, then I would strongly suggest that they do so ASAP — there are a number of reasons that CCPA compliance can cause headaches to the business of your company (or clients), but it doesn’t mean that they shouldn’t comply. Quite to the contrary, noncompliance is simply not an option.

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Tom Kulik is an Intellectual Property & Information Technology Partner at the Dallas-based law firm of Scheef & Stone, LLP. In private practice for over 20 years, Tom is a sought-after technology lawyer who uses his industry experience as a former computer systems engineer to creatively counsel and help his clients navigate the complexities of law and technology in their business. News outlets reach out to Tom for his insight, and he has been quoted by national media organizations. Get in touch with Tom on Twitter (@LegalIntangibls) or Facebook (www.facebook.com/technologylawyer), or contact him directly at tom.kulik@solidcounsel.com.

Politics

And a formal vote is coming too.

By Elie Mystal

at 5:45 PM

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Gov. Gavin Newsom recently signed into law legislation raising the fees attorneys must pay the State Bar of California next year by 27 percent, clearing the way for the first such increase in two decades.

It was an event that would have seemed unthinkable just a few years ago for the then-embattled bar.

In 2016, I revealed in reports for the Los Angeles Daily Journal that the bar had let hundreds of complaints about the unauthorized practice of law sit uninvestigated for months. I also documented how the agency had pledged lawyers’ dues as collateral for building loans without input from key lawmakers.

These were among the scandals that drew the ire of the Legislature, and one assemblyman compared the bar to the Titanic at a committee hearing in the spring of 2016.

Some current and former members of the bar’s board at that time suggested it would be best to split off the agency’s trade association-like functions from its regulatory duties to get the bar back on track.

Members of the Assembly Judiciary Committee warmed to the idea, but members of the state Senate were resistant.

The debate about what reform measures to include in the bar’s funding bill for 2017 continued until the last hours of the 2016 legislative session. Ultimately, the Legislature did not enact a bar bill for the governor to sign.

As a result, the state Supreme Court had to step in and order attorneys to pay to fund the bar’s discipline system so the agency did not have to drastically curtail its operations.

The following year, the state Senate and California Chief Justice Tani G. Cantil-Sakauye came around to the Assembly’s view that the bar needed to be de-unified to help it focus on attorney discipline and admissions.

The agreement led to the passage of historic legislation splitting up the agency effective at the beginning of 2018.

While bar leadership ultimately embraced the separation, it was a step taken because lawmakers had lost confidence in the agency.

Both the bar and the newly formed California Lawyers Association that housed the bar’s former practice law sections said the split got off to a strong start.

However, the bar began to build a case that it needed the Legislature to authorize it to charge higher fees so it could strengthen its discipline system and undertake various technology and capital improvement projects.

There was no appetite for taking such a step in 2018. But the tide began to turn earlier this year when the state auditor agreed a fee increase was justified, though at a significantly lower amount than the bar proposed. The Legislative Analyst’s Office struck a similar tone.

Lawmakers eventually agreed to bump bar fees for 2020 from a combined $430 to $544, and the legislation was enacted by the Legislature with minimal opposition.

Gov. Newsom signed the bill, SB 176, into law on Oct. 9.

The bar board’s new chair called the legislation’s approval an “important milestone” and indicated the agency was already gearing up for its next ask.

“We are grateful to the Legislature and the Governor for this progress and look forward to working with our stakeholders in the coming legislative term to arrive at a multiyear fee bill and a more predictable process for seeking fee adjustments as needed over time,” said Board Chair Alan Steinbrecher.

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Lyle Moran is a freelance writer in San Diego who handles both journalism and content writing projects. He previously reported for the Los Angeles Daily Journal, San Diego Daily Transcript, Associated Press, and Lowell Sun. He can be reached at lmoransun@gmail.com and found on Twitter @lylemoran.

There’s an old simple joke around here about everyone’s favorite Swiss banking carnival sideshow, but we never thought for a moment that the CEO of UBS would give an interview so critical of his company that he gave credence to the old credo “UBS sucks.”

Yet, in an interview with Bloomberg, we found a litany of moments in which Sergio Ermotti sounded less like a chief executive and more like UBS Sucks Guy himself. Here are the best moments of Ermotti clowning on his bank:

On future cuts:

“It’s not just an investment bank issue, it’s across the board,” Ermotti, 59, said in the interview at UBS’s New York offices. “Nothing is really untouchable.”

Have you ever imagined climbing into your grandmother’s attic on a lazy Sunday afternoon and stumbling on a copy of the first print of the U.S. Constitution? Or a long-lost original Van Gogh?

In my case, this dream had no chance of being a reality: All my grandparents live in a cramped apartment with no attic. And my family has moved around so much that, to the extent, there had ever been anything of value or historical significance, it qA already been discovered and sold by others long ago. And that is how I gave up all hope to ever own the first print of the U.S. Constitution or an original Van Gogh.

Eve Sussman runs Snark.art, a Brooklyn laboratory for art and technology that explores the ways that blockchain can unleash creativity in art. One day, Eve, who works with film, video, and installation, wondered what happens when many people own a piece of a work of art. She shot a video piece called 89 Seconds at Alcázar, recreating the famous Las Meninas 1656 masterpiece by Diego Velázqueis that now hangs at the Museo del Prado in Madrid.

She then divided her original Ethereum-based video into 2,304 unique squares to create a new piece of art on the blockchain. She allowed collectors to purchase individual, unique blocks. Now, the 89 Seconds at Alcázar is in the collections of the Whitney Museum, the Museum of Modern Art, Seoul’s Leeum Samsung Museum, and others. As the white paper put it, “The resulting blockchain-based artwork, 89 seconds Atomized, can be collected by a group of new owners, who are empowered to reassemble the full video at will.” Eve’s experiment is an example of fractional ownership, an intriguing concept enabled by blockchain-based smart contract technology that will challenge many of our existing models of ownership and assets.

In 89 Seconds Atomized, each square is registered on the Ethereum blockchain as a digital token (“atom”). It cannot be duplicated but can be freely traded or sold. It is offered at random for the price of $120. The purchaser receives an atom on the Ethereum blockchain (ERC-721), each of which contains a full 10-minute 20×20 pixel video, that can be viewed at Snark.art and stored in a digital wallet. Collectors can loan out atoms or request a loan from the community for public and private screenings. Individual atoms can also be bought or sold by collectors — each is a piece of art on its own.

This approach allowed many people to own a part of Eve’s work. It is also becoming a social experiment in ownership and collective interaction. Eve’s work of art can be reassembled and screened at will by the community of collectors. So, what happens if some of the purchases don’t want to display their unique block or somehow missed the notice to do so?

At this time, the unique blocks that do not have permission are not displayed and instead, a black square appears. This obviously pushes the boundaries of what it means to own something collectively. What impact should each owner have on how the work is displayed? Should she be able to choose not to display it? Is being able to make that choice part of the dynamic nature of the artwork? Is the ability to experience the same artwork differently each time a central part of the blockchain art experience? Thus, legal issues of governance may become significant soon. This area of law and business will be developing — and these questions could be answered — in our lifetimes.

You may ask, “Why?” Well, it’s not because everyone wants to own a piece of history or masterpiece. It’s because fractional ownership has real-life uses. For example, blockchain-based smart contract tokenization in real estate allows owners to create partial, or “fractionalized,” unique digital ownership interests in real estate. Specifically, real estate owners can issue fractionalized tokens to investors, disburse profits proportionally to each token holder, and empower token holders with voting power. This, in turn, allows token owners to trade tokens in secondary markets, which significantly increases liquidity within the real estate asset class.

Of course, this method of ownership is novel and will likely be a turbulent one for a while. For years to come, numerous legal and business minds will develop new concepts and frameworks around fractional ownership and governance. Suffice it to say those disruptive technologies won’t make the practice of law obsolete. On the contrary, lawyers will enable many new business models and social changes as they have done in the past.

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Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. Olga founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. Olga also co-founded SunLaw, an organization dedicated to preparing women in-house attorneys to become general counsels and legal leaders, and WISE to help female law firm partners become rainmakers. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can email Olga at olga@olgamack.com or follow her on Twitter @olgavmack.