All 50 States Have Breach Notification Laws

by Jackson Walker

Jackson Walker

Alabama and South Dakota have now enacted data breach notification laws. They were the last two states in the United States without a notification law. Both laws cover the usual topics, defining what categories of information might trigger notice and the circumstances triggering that notice. Both laws apply to electronic data, require notice only upon a finding of harm (or substantial harm), and contemplate notices to the Attorney General and credit reporting agencies under certain circumstances.

The Alabama law is more robust, and includes a requirement that covered entities have reasonable security measures in place to protect “sensitive personally identifying information.” The law defines reasonable security measures and specifies factors that must be considered in determining whether security measures are reasonable. The Alabama law also requires the covered entity to conduct a “good faith and prompt investigation” and expressly lays out what that requires.

The South Dakota law is noteworthy in that it requires notification to all consumer reporting agencies if notification is required to any affected individual. Most laws only require that credit reporting agencies be notified if the breach impacts a large number of individuals.

Alabama’s and South Dakota’s new laws are addressed more fully below.

Alabama’s Breach Law

The Alabama law takes effect on May 1, 2018. It requires notification if the unauthorized acquisition of electronic data containing “sensitive personally identifying information” is reasonably likely to cause substantial harm.

“Sensitive personally identifying information”

“Sensitive personally identifiable information” is defined as: an Alabama resident’s first name or first initial and last name in combination with one or more of the following:

(1) a non-truncated social security number or tax identification number;

(2) a non-truncated driver’s license number, state-issued identification card number, passport number, military identification number, or other unique identification number;

(3) a financial account number, including a bank account number, credit card number, or debit card number, in combination with any security code, access code, password, expiration date, or PIN, that is necessary to access the financial account or to conduct a transaction that will credit or debit the financial account;

(4) any information regarding an individual’s medical history, mental or physical condition, or medical treatment or diagnosis by a health care professional;

(5) an individual’s health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual; and

(6) a user name or email address, in combination with a password or security question and answer that would permit access to an online account and is reasonably likely to contain or is used to obtain sensitive personally identifying information.

Required Notice to Individuals

A covered entity is required to notify affected individuals of the breach as expeditiously as possible and without unreasonable delay. The notice must be provided within 45 days of the breach discovery and harm analysis unless federal or state law enforcement determines that notice should be delayed to further their criminal investigation. The notice to the individuals must include:

(1) the date, estimated date, or estimated date range of the breach;

(2) a description of the sensitive personally identifying information that was acquired by an unauthorized person as part of the breach;

(3) a general description of the actions taken to restore the security and confidentiality of the personal information involved in the breach;

(4) a general description of steps a consumer can take to protect himself or herself from identity theft; and

(5) information that the individual can use to contact the covered entity about the breach.

Required Notice to the Attorney General

If the breach impacts over 1,000 individuals, the covered entity must also provide notice to the Alabama Attorney General. Notification must be made as expeditiously as possible and without unreasonable delay and, unless delayed by law enforcement, within 45 days of the determination that a breach has occurred and the determination that the breach is reasonably likely to cause substantial harm. Written notice to the Attorney General must include:

(1) a synopsis of the events surrounding the breach at the time the notice is provided;

(2) the approximate number of individuals in the state who were affected by the breach;

(3) any services related to the breach being offered, without charge, to the affected individuals and instructions on how to use those services; and

(4) the name, address, telephone number, and email address of the employee or agent of the covered entity from whom additional information may be obtained.

Required Notice to Credit Reporting Agencies

If the breach requires notification to over 1,000 individuals, the covered entity must also notify, without unreasonable delay, all consumer reporting agencies that compile and maintain files on consumers on a nationwide basis.

Third Party’s Required Notice to Covered Entity

A covered entity’s service provider is required to notify the covered entity of a breach as expeditiously as possible and without unreasonable delay, but no later than 10 days following the breach determination or reason to believe that a breach occurred.

Records of Harm Analysis
If the covered entity determines that notification to affected individuals is not required because there is no likelihood of substantial harm, the covered entity must document its determination and maintain the documentation for at least five years.

South Dakota’s Breach Law

The South Dakota data breach notification law takes effect on July 1, 2018. The law requires notification to affected individuals in the event of unauthorized acquisition of unencrypted computerized data or encrypted computerized data and the encryption key that materially compromises the security, confidentiality, or integrity of personal or protected information unless the information holder reasonably determines that the breach will not likely result in harm to the affected person.

“Personal Information” and “Protected Information”

“Personal information” is defined as a person’s first name or first initial and last name, in combination with any one or more of the following data elements:

(1) social security number;

(2) drivers’ license number or other unique identification number created or collected by a government body;

(3) account, credit card, or debit card number, in combination with any required security code, access code, password, routing number, PIN, or any additional information that would permit access to a person’s financial account;

(4) health information; and

(5) an identification number assigned by an employer in combination with any required security code, access code, password, or biometric data for authentication purposes.

“Protected information” is defined as:

(1) a user name or email address in combination with a password, security question, answer, or other information that permits access to an online account; and

(2) account number or credit or debit card number, in combination with any required security code, access code, or password that permits access to a person’s financial account.

Required Notice to Individuals

Notification to affected individuals must be made no later than 60 days from the discovery of the breach, unless law enforcement has authorized a notification delay to further a criminal investigation.

Required Notice to Attorney General

If a breach impacts over 250 residents of South Dakota, the information holder must notify the Attorney General.

Required Notice to Credit Reporting Agencies

If a breach requires affected individuals to be notified, the information holder must notify, without unreasonable delay, all consumer credit reporting agencies.

Records of Harm Analysis

If the information holder determines that notification to affected individuals is not required because there is no likelihood of harm, the information holder must document its determination and maintain the documentation for at least three years.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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