Search results for: california consumer privacy act

The California Consumer Privacy Act (CCPA) currently has limited carve-outs for personal information (PI) collected from a job applicant, employee, owner, director, officer, medical staff member, or independent contractor of a business acting in such capacity (including, without limitation, communications, emergency contact and benefits PI) (HR data). An even broader exception applies to B-to-B communications and related PI (e.g., vendor, supplier and business customer contacts and communications) (B-to-B data). As a result, businesses subject to the CCPA are not currently required to honor CCPA rights requests received from persons concerning HR data and B-to-B data. These carve-outs are set to sunset on January 1, 2023, when the California Privacy Rights Act (CPRA), which substantially amends the CCPA, goes into full effect, at which point HR data and B-to-B data will be fully subject to all of the requirements of the CCPA/CPRA. Many business administrators had hoped that either the California legislature would extend the HR data exceptions (or maybe even make them permanent), or a federal law that limited data subject rights to traditional consumers would pass and preempt CCPA/CPRA. It is now clear that the former is impossible and the latter is highly unlikely. Accordingly, many companies have a lot to do by year-end to prepare to stand up a CCPA/CPRA program for HR data and B-to-B data.

Continue Reading HR and B-to-B Data Compliance Deadline Looming – Legislative Efforts to Extend California Consumer Privacy Act Exemptions Fail

On August 24, 2022, California Attorney General Rob Bonta issued a press release announcing the first public settlement by the Office of the Attorney General (OAG) involving alleged violations of the CCPA. The settlement involves a judicial judgment, civil penalties and ongoing monitoring and reporting. The use of noncompliance letters to cajole companies into compliance over many months now appears to be a closed chapter in the CCPA saga. Season 2 promises more drama, more action and more money. Entertaining unless you are the next target!

Continue Reading The Cookie Crumbles – Lessons from First California Consumer Privacy Act (CCPA) Monetary Settlement

As the first year for litigation and enforcement, 2020 was a big year for the California Consumer Privacy Act (“CCPA”).  Read on for ConsumerPrivacyWorld’s highlights of the year’s most significant events, as well as our predictions for what 2021 may bring.

Recap – What is the CCPA?

Following the lead of the European Union’s General Data Privacy Regulation (“GDPR”), the CCPA is the nation’s first definitive set of data privacy laws and went into effect on January 1, 2020.  It regulates any “business” that “does business in California,” even those without a physical presence in the state, and determines the means and purposes of the processing of “personal information”.

So what entities qualify as a “business” subject to the CCPA? The statute defines a “business” as a for-profit, private entity that (1) collects “personal information”, (2) determines the means of processing that personal information, (3) does business in California, and (4) meets one of the following criteria:

  • Has annual gross revenues exceeding $25 million;
  • Annually sells/buys or receives/shares for commercial purposes the personal information of 50,000 or more California consumers; or
  • Derives 50% or more of its annual revenue from selling personal information.

Generally, the CCPA covers all information so long as it relates to a California resident or California household.  Aligning with the GDPR, the CCPA defines “personal information” to include “information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.”  Cal. Civ. Code § 1798.140(o).

The CCPA requires compliance with its notification and transparency notices.  First, the CCPA expects businesses present up to four notices, to be determined by that business’s practices.  Second, businesses must also inform consumers of their rights under the CCPA including their: (1) right to know, (2) right to delete, (3) right to opt out, (4) right to not be discriminated against for exercising their CCPA rights.

Key Developments in CCPA Litigation and Enforcement

January 1, 2020 and July 1, 2020 were important dates for the CCPA.  The former date set the act into motion, and saw the commencement of private rights of action.  The latter marked the start of enforcement proceedings.

Litigation

It didn’t take long for litigants to begin alleging violations of the CCPA. The first such lawsuit, Fuentes v. Sunshine Behavioral Health Group, LLC, No. 8:20-cv-00487 (C.D. Cal.), appeared on March 10, 2020, only three months after the law went into effect.  Besides being the first lawsuit to expressly allege a specific violation of the CCPA, this putative class action lawsuit also presented a notable standing issue:  whether a Pennsylvania resident that stayed in a California treatment facility for one month could be a “consumer” under the CCPA.

In early motion practice, the defendant seized on this standing issue, asserting that plaintiff’s one-month stay in California did not render him a consumer as required by the statute.  The CCPA defines a “consumer” as “a natural person who is a California resident.”  The applicable regulations in turn define as resident as:  (1) individuals who are in California for other than a temporary or transitory purpose; or (2) individuals domiciled in California who are outside the state for a temporary or transitory purpose.

Unfortunately, the Court did not have an opportunity to weigh in on this dispute before the parties filed a notice of voluntary dismissal of suit.

At least one CCPA class action, G.R. v. TikTok, No. 2:20-cv-04537 (C.D. Cal.), has already been consolidated with a several other lawsuits in an MDL in the U.S. District Court for the Northern District of Illinois.  On May 20, 2020, “G.R.,” a minor, filed a putative class action suit against popular social media platform TikTok and its parent company, ByteDance.  Seeking to represent a class of “[a]ll minor persons who registered for or used the TikTok app from at least May 14, 2017 to the present,” the plaintiff alleged that TikTok violated the CCPA when it allegedly failed to provide notice of the app’s alleged use and collection of its users’ data.  The complaint alleged that this use and collection included scanning every video uploaded to the app with facial recognition technology, extracting geometric data regarding the unique points and contours of each face as they appear in each uploaded video, and then creating and storing a template of each face from that data.

In September, G.R. was consolidated with several other lawsuits against TikTok into an MDL.  The MDL currently features over 30 plaintiffs, many of which are alleged to be minors.  On December 18, 2020 an amended consolidated class action complaint was filed.  Check back here for updates on how this case develops.

On the litigation front, one district court held that the CCPA’s focus on privacy does not restrict the scope of discovery.  In Kaupelis v. Harbor Freight Tools USA, Inc., No. 8:19-cv-01203 (C.D. Cal.), the court granted a motion to compel, stating that, “[n]othing in the CCPA presents a bar to civil discovery.  Notably, no other case has so held.  And the statute itself explicitly says that it is not a restriction on a business’s ability to comply with federal law”.

Another case, Stasi v. Inmediata Health Grp. Corp., No. 3:19-cv-02353 (S.D. Cal.),  confirmed that the CCPA does not apply to medical information that is governed by the California Confidentiality of Medical Information Act (“CMIA”) but can apply to disclosed non-medical information.

2020 also recently saw a settlement in a putative class action that when filed, was among the first to cite a violation of the CCPA.  High-end children’s clothing retailer Hanna Andersson faced numerous claims in the putative class action that followed a widespread data breach.  The alleged breach affected the personal information of over 200,000 customers who made online purchases on the Hanna Andersson website between September 16 and November 11, 2019.  The personal information included names, shipping and billing addresses, payment card numbers, CVV codes, and expiration dates.  This information was then exfiltrated and used to make fraudulent purchases using the affected customers’ credit cards.  On January 15, 2020, Hanna Andersson notified its customers of the breach.

In a settlement reached last month, Hanna Andersson agreed to create a settlement fund of $400,000 and implement new security measures.  These measures include hiring a director of cyber security, conducting a risk assessment of the its data assets and environment consistent with the NIST Risk Management Framework, and completing PCI Attestation of Compliance (AOC) in conjunction with a PCI-certified Qualified Security Assessor (QSA).  For more information on the significance of this settlement, including how the financial component of the settlement compares to other settlements, be sure to read ConsumerPrivacyWorld’s previous, in-depth coverage.

Legislation and Enforcement

As reported on our sister blog, Security & Privacy Bytes, 2020 was an incredibly active year for CCPA-related legislation and enforcement activity.

State enforcement of the CCPA began on July 1, 2020, when the Attorney General of California started to issue violation notice letters to a swath of online businesses. Although the letters themselves remain confidential, California’s Supervising Deputy Attorney General, Stacey Schesser, has provided some insight into their substance.  The letters targeted multiple industries and business sectors, which dispelled the belief that certain industries would be prioritized over others.  Additionally, the letters focused on businesses that operated online and were missing either key privacy disclosures or a “Do Not Sell” link (where the Attorney General thought one was necessary).  Finally, the targets of the letters were identified, at least in part, based on consumer complaints, including complaints made using social media.

On August 14, 2020, several regulations concerning the CCPA went into effect or were dropped.  The issues addressed by the regulations included the ease with which consumers could submit requests to opt out, whether certain businesses were required to provide offline notices of the right to opt-out, and the wording that businesses must incorporate when the sale of personal information is involved.  For more information, our sister blog, Security & Privacy Bytes, previously provided in-depth coverage.

This year, California also enacted a law to resolve the disconnect between the CCPA and HIPAA.  On September 14, 2020, Governor Gavin Newsom signed AB 713 into law.  AB 713 expands the CCPA exceptions for HIPAA business associates and HIPAA de-identified data, which may be particularly helpful in research.  AB 713 solves a disconnect between the CCPA and HIPAA’s arguably less burdensome de-identification standards.  Without this “fix,” data could have been sufficiently deidentified to be exempt from HIPAA, yet not sufficiently deidentified to be exempt from CCPA, creating a much more complicated legal regime for health companies.  Check out Security & Privacy Bytes’ coverage here.

Additionally, although this year was the first year in which the CCPA was in effect, it was also the year when its successor was determined.  On November 6, 2020, a majority of Californians voted to approve Proposition 24, the “California Privacy Rights Act of 2020” (“CPRA”).  The CRPA will go into effect on January 1, 2023, but will apply to all personal information (PI) collected on or after January 1, 2022.  Security & Privacy Bytes provided more coverage.

Finally, on December 10, 2020, the California Department of Justice released a fourth set of proposed modifications to the regulations regarding the CCPA.  The comment period is set to expire on December 28, 2020.  Stayed tuned to ConsumerPrivacyWorld to know the final outcome.

What Does the Future Hold?

With the CCPA now in effect, all eyes are focused on the significant changes that will be ushered in by the CPRA.  One of the most significant changes will be the creation of a new state agency, the California Privacy Protection Agency (“CalPPA”).  By July 1, 2021, the CalPPA will take over rulemaking and beginning January 1, 2024, the CalPPA will implement and enforce the CPRA.

The CalPPA will be the first enforcement agency in the United States dedicated solely to privacy.  For those familiar with the Consumer Financial Protection Bureau and its significant impact on the industry, the CalPPA is speculated to strengthen the enforcement and compliance with CCPA.  With the creation of the CalPPA – which is set to operate as a key privacy regulator — we know that the CCPA is here to stay.

Additionally, with a new administration and Congress arriving in the new year, the stage may finally be set for enacting comprehensive federal data privacy laws.  ConsumerPrivacyWorld previously reported on the status of federal legislation and glimpsed at the preemption issues that federal legislation would almost surely create.

The CCPA continues to evolve and  remains poised to reshape the data privacy landscape, including in the context of consumer litigation.  How will the CalPPA function?  Will the new administration and Congress make federal regulations?  Will it preempt the CCPA?  We guarantee to keep you informed on everything you need to know.  Stay tuned and do not hesitate to reach out for any questions or advice!

We have scheduled a make-up session with CLE for June 4, 2019 at 3p EST.

Effective January 1, 2020, the California Consumer Privacy Act (CCPA) will impose burdensome GDPR-like transparency and individual rights requirements on almost every company that handles “personal information” regarding California residents, regardless of where the business is based. The Act will impact information regarding not only consumers, but also employees and business contacts. Continue Reading Did You Miss Our Recent CCPA webinar? Understanding and Preparing for the California Consumer Privacy Act

Effective January 1, 2020, the California Consumer Privacy Act (CCPA) will impose burdensome GDPR-like transparency and individual rights requirements on almost every company that handles “personal information” regarding California residents, regardless of where the business is based. The Act will impact information regarding not only consumers, but also employees and business contacts.

Join us for a webinar on May 7, 2019, when Phil Zender and Ivan Rothman will provide an overview of the CCPA and discuss the act’s:

  • Scope and applicability (e.g., what companies, data and processes will be impacted)
  • Key requirements (e.g., privacy statement, individual rights, etc.)
  • Contextual comparisons to existing US law and GDPR
  • Suggested steps to build a CCPA compliance program efficiently and effectively
  • Practical tips to manage risk and leverage existing compliance processes where possible

Attendees will have the opportunity to ask questions during the program, with a full Q&A session to follow.

California’s Consumer Privacy Act of 2018 (“CCPA”) which was signed into law in June 2018 will take effect on January 1, 2020.

California Attorney General Xavier Becerra has announced that the California Department of Justice has organized six public forums throughout the State that will provide those impacted by the new law an opportunity to comment on the rulemaking process. Continue Reading California to Hold Public Forums on California Consumer Privacy Act as Part of Rulemaking Process

Amendments to California’s expansive Consumer Privacy Act of 2018 (“the Act”) include new provisions that may significantly impact the timing of enforcement and provide exemptions for large amounts of personal data regulated by other laws.

The Act, signed into law in June, is a sweeping data privacy law that regulates the processing of personal data of California residents. Because the Act was hastily passed in order to prevent a similar ballot initiative proceeding to a vote in the November elections, it was expected that the Act would undergo significant amendments before it enters into effect on January 1, 2020.

Continue Reading Amendments to the California Consumer Privacy Act of 2018: Progress toward Clarity

California’s newly enacted Consumer Privacy Act of 2018 is the strictest of the US’s patchwork of privacy related regulations. The Act will impact any legal entity that (i) does business in California, (ii) is operated for the profit or financial benefit of its owners, (iii) collects consumers’ personal information and determines the purpose and means of processing such information, and (iv) satisfies at least one of the following three conditions:

  • Has an annual gross revenue of over $25 million
  • Alone or in combination, annually buys, receives, sells or shares for commercial purposes the personal information of 50,000 or more consumers, households or devices, or
  • Derives 50% or more of its annual revenues from selling consumers’ personal information

Continue Reading California’s Consumer Privacy Act of 2018

The 2025 legislative cycle marked a pivotal year in US privacy law, defined not only by continued nationwide expansion into Artificial Intelligence (AI) governance, children’s and teen privacy and online safety, as well as emerging data categories, but by a major restructuring of California’s privacy enforcement infrastructure. California’s introduction of the Delete Request and Opt-out Platform (DROP) system, the nation’s first centralized, statewide platform for managing consumer deletion requests; combined with sweeping reforms to the Consumer Privacy Fund, will materially increase CalPrivacy and attorney general enforcement capacity on a recurring, self-replenishing basis. These developments accompany completion of a far-reaching rulemaking package that imposes detailed obligations for Data Protection Impact Assessments (DPIAs or risk assessments), cybersecurity governance and Automated Decision-Making Technology (ADMT). At the same time, states beyond California have enacted targeted statutory reforms addressing neurotechnology, data-broker practices and minors’ online safety, underscoring that – absent federal preemption – state-driven models will continue to shape the national privacy compliance landscape in 2026. By January 2026, there will be 20 state consumer privacy laws in effect, several with unique material obligations. We detail what enterprises need to be prepared for in 2026 and explain why we believe next year will be a watershed period for consumer privacy in the US.

Continue Reading 2025 State Privacy Roundup: Key Trends and California Developments to Watch in 2026

A Domino’s customer may proceed in her putative class action for violations of the California Invasion of Privacy Act (CIPA) against ConverseNow for its provision of an AI virtual assistant that processes restaurant telephone orders. In Taylor v. ConverseNow Technologies, Inc., Case No. 25-cv-00990-SI, 2025 WL 2308483 (N.D. Cal. Aug. 11, 2025), the Court held that a communication software provider that could potentially improve its software with collection of communications was plausibly violating CIPA even though it had an agreement with the business receiving the communications. This ruling serves a cautionary note to both software companies and – because of potential aiding and abetting liability – companies that use those technologies.

Case Background

According to the complaint, ConverseNow provides AI voice assistants to clients like Domino’s to answer calls and process orders. Plaintiff Eliza Taylor alleged she called Domino’s to place a delivery order, was routed to ConverseNow’s virtual assistant without notice, and then provided personally identifiable information (including her payment information and delivery address). Taylor alleged “ConverseNow has the capability to use caller communications” to improve its products and develop new ones. Taylor brought claims under CIPA, seeking statutory damages for herself and a putative class.

CIPA is an anti-wiretapping statute that imposes criminal and civil penalties. Cal. Penal Code §§ 631(a), 632(a).  Section 631(a) prohibits, among other things, (1) unauthorized wiretapping, (2) intercepting the contents of any wireline communication, or (3) using or attempting to use any information so obtained. Section 637.2 authorizes a private right of action and imposes statutory damages of at least $5,000 per violation without requiring proof of actual damages.

Court Adopts Capability Test To Uphold CIPA Claims Against Software Provider

Critically, CIPA exempts parties to a conversation from liability. In other words, both Taylor and Domino’s could “intercept” communications with each other or use a tape recorder to record communications. ConverseNow moved to dismiss on this basis, arguing that its AI voice assistant was simply an extension of its client, Domino’s, who was a party to the conversation.

The Taylor Court disagreed and held that ConverseNow was an intercepting third party and not covered by the exemption for Domino’s. The Court discussed two different approaches adopted by California federal courts: the “extension” test and the “capability” test. 

Under the extension test, a software provider is not liable under CIPA where it is a tool used by a party to the communication (akin to a tape recorder) and does not use communication for the software provider’s own purposes. 

Under the capability test, whether the software provider did use the communication for the software provider’s own purposes is irrelevant; the inquiry is whether the software provider had the capability to use the communication for its own purposes. 

Citing “[a] growing number of district courts,” the Taylor Court adopted the capability test as the better interpretation of CIPA. Applying the capability test, the Court held that Taylor sufficiently alleged ConverseNow is a third party based on its capability and actual use of data from customers’ calls “to improve its own product.”

After concluding that ConverseNow was a third party to the conversation, the Court quickly disposed of the defendant’s other CIPA arguments. The Court found that there were sufficient allegations of “interception” because Taylor did not realize her phone call was connected to a party other than Domino’s. Taylor’s complaint also satisfied the intent element of CIPA because it alleged that ConverseNow’s business model depended on recording conversations. Finally, the Court held that plaintiff alleged a “confidential” conversation for purposes of a Section 632 claim by alleging disclosure of her personally identifiable information and personal financial information.

Conclusion

Not all decisions addressing CIPA claims have reached similar outcomes – many in fact have been dismissed. However, as this decision demonstrates, CIPA provides significant risk for software providers and website operators, particularly when it comes to training AI models using real human interactions. Moreover, all businesses using or developing AI-powered platforms to provide services to customers should also take this ruling under consideration. Although AI software providers may primarily offer tools for their customers to use, state wiretapping laws like CIPA can extend liability to providers themselves based on the software’s capabilities.  Given the proliferation of AI across industries  – and state efforts to regulate its use  – additional litigation activity is anticipated going into 2026. Privacy World will keep you in the loop on further developments in this space. Stay tuned.

Disclaimer: While every effort has been made to ensure that the information contained in this article is accurate, neither its authors nor Squire Patton Boggs accepts responsibility for any errors or omissions. The content of this article is for general information only, and is not intended to constitute or be relied upon as legal advice.

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