Minding Your Business

Proskauer’s perspective on developments and trends in commercial litigation.

A Primer on the SHIELD Act: New York’s Move to Adopt More Stringent Data Security Requirements, Part II

What would companies need to do to comply with the law?

The Stop Hacks and Improve Electronic Data Security (SHIELD) Act imposes requirements in two areas: cybersecurity and data breach notification. The cybersecurity provisions of the proposed SHIELD Act would require companies to adopt “reasonable safe-guards to protect the security, confidentiality and integrity” of private information. The Act provides examples of appropriate administrative, technical, and physical safeguards, such as designating an employee to oversee the company’s data security program; identifying “reasonably foreseeable” risks to data security; selecting vendors that can maintain appropriate safeguards; detecting, preventing and responding to attacks and system failures; and preventing unauthorized access to private information.  Continue Reading

A Primer on the SHIELD Act: New York’s Move to Adopt More Stringent Data Security Requirements

In November 2017, New York Attorney General Eric Schneiderman introduced the Stop Hacks and Improve Electronic Data Security (SHIELD) Act (the “Act”) in the state’s Legislature. Companies – big and small – that collect information from New York residents should take note, as the Act could mean increased compliance costs, as well as potential enforcement actions for those that do not meet the Act’s requirements. This blog post provides a breakdown of the essential components of the SHIELD Act and information on how to comply with this potential new law. Continue Reading

Coupon Settlements: Discount or Discontent?

Congress passed the Class Action Fairness Act of 2005 (“CAFA”) with the hope of preventing abuse in class action lawsuits. CAFA assigns jurisdiction to federal courts over class actions where: (i) the aggregate amount in controversy exceeds five million dollars ($5,000,000); (ii) the class comprises at least 100 plaintiffs; and (iii) there is at least “minimal diversity” between the parties (i.e., at least one plaintiff class member is diverse from at least one defendant). In addition, CAFA mandates that courts apply greater scrutiny to class action settlements and, in particular, those involving coupons (i.e., vouchers or other non-cash disbursements which can be redeemed for (typically discounted) products or services).[1] Continue Reading

The Lynyrd Skynyrd Texting Case: Spoliation and Non-Party Texts

It was a tragedy. The 1977 plane crash that killed Ronnie Van Zant and Steven Gaines almost ended the band Lynyrd Skynyrd forever. In the wake of the crash, the survivors swore an oath never again to perform as “Lynyrd Skynyrd.” That oath made its way to court where it would be memorialized in a 1988 Consent Order outlining how and when surviving members could use the name “Lynyrd Skynyrd.”  Continue Reading

N.Y. Court of Appeals: No Difference Between “Private” and “Public” Posts in Discovery

Those who thought designating social media posts as “private” would be sufficient to shield them from outsiders—including opposing parties in litigation—had better think again. On February 13, 2018, the New York Court of Appeals, New York’s highest court, unanimously held that the rules generally applicable to discovery in civil actions are just as applicable to “private” social media posts, and that they are therefore subject to disclosure if they are “reasonably calculated to contain evidence ‘material and necessary’ to the litigation.”  Forman v. Henkin, New York State Court of Appeals, No. 1 (quoting N.Y. C.P.L.R. 3101(a)). Continue Reading

Deceptive Discovery: Second Circuit Affirms Sanctions for Mishandling of Discoverable Data

Late last month, in Klipsch Grp., Inc. v. ePRO E-Commerce Ltd., the Second Circuit affirmed a $2.7 million sanctions award against defendant ePRO after repeated instances of discovery misconduct. Finding that the district court’s award properly reflected the additional costs plaintiff Klipsch Group Inc. was forced to bear due to ePRO’s actions, the Second Circuit disagreed with ePRO that the sanctions were impermissibly punitive and disproportionate. In an era of increasingly complex digital discovery, this case serves as both a sword and a shield: it protects litigants who pursue corrective discovery efforts to remedy an opponent’s willful mishandling of discoverable information, and it punishes litigants who flout their duties to maintain and disclose relevant information. Continue Reading

Copyright in the Digital Age: Cisco v. Arista and the Scènes à Faire Doctrine

Imagine producing a classic Western without cowboys, saloons, or standoffs. This seems almost inconceivable because these elements are deeply integral to the genre – so much so, in fact, that they are essentially necessary for the creation of such works. Copyright law recognizes and accounts for this, by denying copyright protection to such elements under the “scènes à faire” doctrine. “Scènes à faire” literally means “scenes that must be done.” This doctrine traditionally has been applied in the context of literature and film, to keep classic tropes free for use by artists looking to create works in such genres. The Federal Circuit will soon decide, in Cisco Systems v. Arista, whether the scènes à faire doctrine can also be applied in the context of computer programming, to deny copyright protection for software commands that have become commonplace within the field. Continue Reading