Read on to see more on legal industry hires, recognitions, and new technology and research impacting the legal industry.
Law Firm Hiring, Strategic Partnerships and Expansions
Vincenzo Franco
Van Ness Feldman announces the return of Vincenzo Franco as a partner in the Electric and Renewable Energy Practices. Franco was at Van Ness Feldman from 2010-2014, and left the firm to work with Exelon Corporation, as Assistant General Counsel – Wholesale Trading Compliance and then Associate General Counsel at Exelon Corporation, where he led the compliance function for Constellation. With his return to VNF, Franco focuses on transactional, regulatory and enforcement matters representing utilities, generation owners, developers and other investors before FERC (Federal Energy Regulatory Commission). VNF Chair, Richard Agnew, indicated his excitement at Franco’s return. Agnew says, “His [Franco’s] in- house experience coupled with his knowledge of our clients makes Vincenzo an exceptionally strong addition to the firms highly regarded electric practice.”
Leading international technology and energy law firm Baker Botts LLP announced that it has formed strategic partnerships with the Cannon Houston, Station Houston and Capital Factory. These Houston organizations are designed to aid entrepreneurs and will specifically be working with Baker Botts’ Emerging Company and Venture Capital practice based in Palo Alto. The firm’s experience in advising entrepreneurs, emerging growth companies, investors and venture capitalists provides a valuable resource for the incubators and the entrepreneurs they nurture and host. Samantha Crispin, the Technology Sector Chair at Baker Botts points out this partnership will allow Baker Botts to work with a generation of Texas-based companies from their very inception. She says, “One of the most intriguing aspects of these partnerships is the expected cross-pollination of our Texas and California ECVC practices and that the most promising companies will gain exposure to potential investors, including those in Silicon Valley.”
Baker Botts Managing Partner John Martin embraces the opportunities for growth this partnership will provide. He says, “We have a history of working with emerging and technology companies throughout their full life cycle, and we expect these partnerships will expand those opportunities more broadly. Some of our firm’s largest clients are businesses with which we have worked since they were startups themselves.”
Dinsmore has expanded operations onto the East Coast, opening an office in the Boston Financial District. Three partners—Javier F. Flores, Eric V. Skellyand Brian Blaesser will lead the new office and the firm’s expansion into this region. The firm will primarily represent clients in litigation and real estate development in New England. With the opening of the office in Boston, Dinsmore now has a presence in 25 cities across the country.
Beard has been litigating complex civil and intellectual property matters for over ten years, with a particular emphasis on handling complex discovery matters. He has argued cases in federal courts across the country, and has handled matters before the International Trade Commission (ITC) and the U.S. Court of International Trade. Beard says, “With its history and reputation in Colorado, the Firm is uniquely positioned to serve the explosive growth of Denver’s high-tech market.”
Along with Beard, Sherman & Howard is also adding Robert Thompson as an Associate to the Litigation, Trials and Appeals practice group. Thompson’s practice will focus on securities litigation and enforcement matters. His previous experience in house at a leading financial institution has prepared him well for representing clients in SEC (Securities and Exchange Commission), DOJ (Department of Justice) and FINRA (Financial Industry Regulatory Authority ) investigations. Katie Varholak, Litigation Practice Group Leader at Sherman & Howard, “Thompson’s background in finance, securities and complex corporate investigations positions him to serve a wide range of the firm’s clients.”
Sherman is joining the Boston office, while Trunkes will be in the New York office. Sherman has experience assisting project owners, developers and general contractors, and others, in navigating construction disputes, and with drafting contracts, negotiation and entity formation.
Trunkes works with developers, apartment building, brownstone and condominium unit owners, and others, in negotiating contracts and adjacent-owner license access agreements. R+C Construction chair, Gregory R. Faulkner, says the attorneys are welcome additions and will help the firm strengthen its presence in the construction market, and “Their hands-on experience is an added value to our practice and further enhances our collective ability to provide the best service to our clients.”
Law Firm Accomplishments, Awards and Recognitions
McKool Smith, noted litigation firm, secured an insurance recovery victory on behalf of Pfizer in Delaware Superior Court. This victory allows Pfizer to continue to compel two excess insurers to cover the costs related to defend and settle multidistrict litigation surrounding pain treatments Celebrex and Bextra. McKool Smith principals Robin Cohen, Adam S. Ziffer and Marc Ladd represented Pfizer in this litigation. A Delaware state court judge awarded partial summary judgment, saying Arch Insurance Company and U.S. Specialty Insurance Company were unable to apply a “specific litigation exclusion” in their D&O policies, and that these insurers must help cover the cost of the $486 million settlement.
Seyfarth Shaw was recently recognized for its commitment to diversity and inclusion by the California Minority Counsel Program (CMCP) receiving the Drucilla Stender Ramey Majority-Owned Law Firm Award. The CMCP is a state-wide non-profit dedicated to opening up the legal profession to attorneys from all backgrounds, by providing attorneys of color with opportunities for business development. Seyfarth Shaw has offices in Sacramento, San Francisco, Los Angeles and Century City. The firm has a recognized commitment to diversity, and was also recently named a “Best Law Firm for Women” for the ninth year in a row, and was shortlisted for the 2019 Chambers USA Diversity & Inclusion Awards. The firm is especially proud of its “Rooney Rule” initiative, where for every open associate position, at least one diverse candidate is considered and interviewed.
Full-service law firm Pillsbury’s Corporate practice, in a review of M&A and private equity, was ranked among the Top 20 legal advisers in the US and Japan. Factset highlighted Pillsbury as a top 20 firm in Japan for M&A deals, and in the United States, the firm was in the top 20 for middle-market M&A transactions. Along those lines, Refinitiv listed Pillsbury in the top 20 for deal count for firms handling U.S. middle-market mergers and acquisitions, so far in 2019, and Bloomberg named Pillsbury in the top 20 for active law firm advising on deals valued up to 250 million. Pillsbury has over 100 experienced M&A attorneys across the firm’s twenty global offices. Highlighted transactions for 2019 include Invitae Corp.’s acquisition of biotechnology company Jungla, Salarius Pharmaceuticals on its merger with Flex Pharma, and Intel’s acquisition of Barefoot Networks, just to name a few.
DirectWomen, dedicated to increasing the presence of women attorneys on corporate boards, will honor 2019 award recipients in October in New York City at the Sandra Day O’Connor Board Excellence Award Luncheon. These awards are given to recognize the efforts made by the recipients to increase corporate board diversity. The Sandra Day O’Connor Board Excellence Award honors women who have served on the board of a public company and have advanced the mission of diversity in the workplace. This year, Angela Braly, Co-founder of the Policy Circle and former Chair and CEO of WellPoint, now known as Anthem, among others, and Rose McKinney-James, Managing Principal of Energy Works LLC. PNC will be presented with the 2019 Board Diversity Award, which recognizes corporations that served as leaders in achieving board diversity by showing a commitment to diversity in the boardroom. Linda L. Addison, Immediate Past Managing Partner of Norton Rose Fulbright and Director, Torchmark Corporation will be recognized with the Distinguished Alumna Award, highlighting the accomplishments of an Alumnae who joined a large corporate board since completing the Institute. Finally, the Mary Ann Jorgenson Board Empowerment Award will be presented to DirectWomen Advisory Board Member Alan L. Beller, Senior Counsel, Cleary Gottlieb Steen & Hamilton LLP; Director, The Travelers Companies, Inc for his work preparing women attorneys to assume the responsibilities of board service.
Commercial Mortgage Alert once again ranked law firm Cadwalader, Wickersham & Taft LLP at the top of their commercial mortgage-backed securities (CMBS) tables, ranking Cadwalader as Number 1 for both Issuer Counsel and Underwriter Counsel, making it the 19th year in a row Cadwalader held that spot for Issuer Counsel. Further, the firm represented 58% of the issuer offerings floated in the United States in the first half of 2019, and 44% of the CMBS transactions on the underwriter side. Mike Gambro, co-chair of Cadwalader’s Capital Markets Group, says of the rankings, “We work with great clients who expect us to provide top-notch advice and service, and we are fortunate to have the results reflected in our position in the law firm rankings for so many years.” Cadwalader’s Capital Markets Group has attorneys based in New York, Charlotte, Washington, D.C., and London.
Legal Industry Technology, Research and Software Advancements
Qorus, a sales platform connecting contacts, content, and data, recently announced a Share & Track feature to their software. This addition enables user to send documents securely without attachments, and track how their contacts engage with those documents, such as proposals, pitches, and contracts. This enables sales teams to see and analyze which part of their proposal process is most important to their prospects, and they gain insight into their materials to ensure they create content that is engaging and effective.
The documents are sent via tracked sharing links that can be inserted into messages to clients. These links, when clicked, track the engagement with the content and launch an online document viewer and the file can be viewed securely, providing the information securely to the prospect. The sales team can see how long the prospect looked at the document, which pages were looked at the most, and whether or not the document was passed on, providing valuable feedback on what really matters to prospects. Ray Meiring, Qorus CEO, explains “This creates a powerful feedback loop that tells the team how interested a potential buyer is, and gives them insight into the prospect’s true propensity to buy – allowing them to adjust their approach accordingly.”
With the constant concerns regarding cybersecurity and with increasing regulation on a variety of levels, the introduction of Digital Defense’s Frontline InsightTM with on-demand peer analysis of security risk metrics gives companies another arrow in their quiver to secure their data. Frontline Insight is accessible via Frontline.Cloud Digital Defense’s Saas security assessment platform. This allows Digital Defense users to access information to reduce their own security risk, and provide information on how to evolve and maintain their information security programs so that they perform at top levels. By offering comparison from an industry perspective, but also integrating suggestions based on organizational and employee size, the tool can highlight vulnerable areas and threats, and assist in the development of benchmarks. Larry Hurtado, President & CEO of Digital Defense says this is a useful product for companies looking to evaluate their data security practices in comparison to organizations similar in size and scope. He says, “Frontline.Cloud enables clients to gauge their success in ways that previously required more intensive consultative studies. Now, this information is available with just a few clicks.”
Of particular interest to law firms as they look at managing law firm succession strategies as baby boomers exit the workforce and millennials assume greater responsibility is the results of a Manpower Group Survey, indicating only six percent of millennials want to be leaders, and just four percent want to manage others. The survey indicates that millennials, on a whole, are more interested in developing their own skill sets, and less interested in learning to manage and lead others. This suggests that law firms will be among the 84% of organizations facing a leadership shortfall, and developing a leadership pipeline for law firms, as well as client relationship management, will become increasingly important as firm leadership transitions become more complex and frequent.
Intapp has recently released a white paper The Modern CMO: Advancing Marketing From Reactive to Predictive. This paper discusses how adopting a modern approach to law firm business development, and harnessing data across the entire client lifecycle can lead to insights that drive smarter and more strategic decisions in law firms. Topics discussed include the role of the CMO as a change agent, smart collaboration in action and how to transition from a reactive to a predictive approach.
Well, no one can say that he did not get his day in Court.
Plaintiff Ewing, a serial TCPA litigator who filed yet another case assigned to Judge Battaglia, narrowly escaped dismissal of all his claims, and was permitted leave to amend for a second time. SeeStark v. Stall, Case No. 19-CV-00366-AJB-NLS, 2019 U.S. Dist. LEXIS 132814 (S.D. Cal. Aug. 7, 2019). But in the process, the Judge called attention to the Plaintiff’s unprofessional conduct in an earlier case, ruled that he failed to name a necessary party, and found that he inadequately plead the existence of an agency relationship between the defendant and the necessary party that he had failed to join in the lawsuit.
At the outset, the court dismissed the claim brought by co-plaintiff Stark, as the Complaint contained no allegations that any wrongful telephone calls were placed to that particular individual.
In 2015, Ewing had already been put on notice of the local rules of professionalism and their applicability to him, despite his status as a pro se litigator. Thus, the Court easily granted defendant’s motion to strike Plaintiff’s allegations to the effect that defendant had made a “derogatory remark” simply by pointing out that he was designated as a vexatious litigator.
The two most important pieces of the case for TCPAWorld are the Court’s rulings about Plaintiff’s failure to join a necessary defendant and his insufficient allegations to establish vicarious liability.
Plaintiff had failed to name as a defendant the entity (US Global) that allegedly made the calls to him. The court determined that this company is a necessary party that must be added in order for the court to afford complete relief among the parties. We often see situations where only a caller but not a seller, creditor, employer, franchisor, etc. are named, or vice versa, so it is encouraging to see courts strictly enforce Federal Rule 15 in the TCPA context.
The court further held that the relationship between Defendant and US Global was not such that Defendant could be held liable for violations of the TCPA that were committed by US Global. While Plaintiff made unsubstantiated allegations that an agency relationship existed, the Court treated these as merely legal conclusions and granted dismissal based on insufficient allegations of facts to establish a plausible claim that there is a common-law agency relationship between Defendant and US Global. Simply stated, the bare allegation that Defendant had the ability to control some aspects of the caller’s activity was insufficient to establish control for purposes of TCPA vicarious liability principles.
Plaintiff’s amended pleading is due on August 31—anticipating another round of motion practice, we will track any further developments in this case.
Hyperconnectivity is a real phenomenon and it is changing the concerns of society because of the kinds of interactions that can be brought about by IoT devices, which could be: i) People to people; ii) People to things (objects, machines); iii) Things/machines to things/machines.
It gives rise to different issues for people. According to a European Survey, 72% of EU Internet users worry that too much of their personal data is being shared online and that they have little control over what happens to this information[1]. It gives rise to inevitable ethical issues and its relationship with the techno environment.
The discussion on ethics that follows aims to provide a quick tour on general ethical principles and theories that are available as they may apply to IoT[2]. Law and ethics are overlapping, but ethics goes beyond law. Thus, a comparison of law and ethics is made and their differences are pointed out in the great work of Spyros G Tzafestas, who wrote Ethics and Law in the Internet of Things World. In this article, he considers that the risks and harms in a digital world are very high and complex, especially explaining those tech terms and their impact in our private life. Thus, it is of primary importance to review IoT and understand the limitations of protective legal, regulatory and ethical frameworks, in order to provide sound recommendations for maximizing good and minimizing harm[3].
Major data security concerns have also been raised with respect to ‘cloud’-supported IoT. Cloud computing (‘the cloud’) essentially consists of the concentration of resources, e.g. hardware and software, into a few physical locations by a cloud service provider (e.g. Amazon Web Service)[4]. We are living in a data-sharing storm and the economic impact of IoT’s cyber risks is increasing with the integration of digital infrastructure in the digital economy[5]. We are surrounded by devices which contain our data, for instance:
Wearable health technologies: wearable devices that continuously monitor the health status of a patient or gather real-world information about the patient such as heart rate, blood pressure, fever;
Wearable textile technologies: clothes that can change their color on demand or based on the biological condition of the wearer or according to the wearer’s emotions;
As a result of the serious impact IoT may have and because it involves a huge number of connected devices, it creates a new social, political, economic, and ethical landscape. Therefore, for a sustainable development of IoT, political and economic decision-making bodies have to develop proper regulations in order to be able to control the fair use of IoT in society.
In this sense, the most developed regions as regards establishing IoT Regulations and an ethical framework are the European Union and the United States both of which have enacted:
Legislation/regulations.
Ethics principles, rules and codes.
Standards/guidelines;
Contractual arrangements;
Regulations for the devices connected;
Regulations for the networks and their security; and
Regulations for the data associated with the devices.
In light of this, the next section will deal with Data Protection Regulations, Consumer Protection Acts, IoT and Cyber Risks Laws, Roadmap for Standardization of Regulations, Risk Maturity, Strategy Design and Impact Assessment related with 2020 scenario, which is: 200 billion sensor devices and market size that, by 2025, will be between $2.7 trillion and $3 trillion a year.
Europe
The Alliance for Internet of Things Innovation (AIOTI) was initiated by the European Commission in order to open a stream of dialogue between European stakeholders within the Internet of Things (IoT) market. The overall goal of this initiative was the creation of a dynamic European IoT ecosystem to unleash the potential of IoT.
In October 2015, the Alliance published 12 reports covering IoT policy and standards issues. It provided detailed recommendations for future collaborations in the Internet of Things Focus Area of the 2016-2017 Horizon 2020 programme[7].
The IoT regulation framework in Europe is a growth sector:
EU Directive-2013/40: this Directive deals with “Cybercrime” (i.e., attacks against information systems). It provides definitions of criminal offences and sets proper sanctions for attacks against information systems[8].
EU NIS Directive 2016/1148: this Network and Information Security (NIS) Directive concerns “Cybersecurity” issues. Its aim is to provide legal measures to assure a common overall level of cybersecurity (network/information security) in the EU, and an enhanced coordination degree among EU Members[9].
EU Directive 2014/53: this Directive “On the harmonization of the laws of the member states relating to the marketing of radio equipment”[10] is concerned with the standardization issue which is important for the joint and harmonized development of technology in the EU.
EU GDPR: European General Data Protection Regulation 2016/679: this regulation concerns privacy, ownership, and data protection and replaces EU DPR-2012. It provides a single set of rules directly applicable in the EU member states.
EU Connected Communities Initiative: this initiative concerns the IoT development infrastructure, and aims to collect information from the market about existing public and private connectivity projects that seek to provide high-speed broadband (more than 30 Mbps).
United States
A quick overview of the general US legislation that protects civil rights (employment, housing, privacy, information, data, etc.) includes:
Fair Housing Act (1968);
Fair Credit Reporting Act (1970);
Electronic Communication Privacy Act (1986), which is applied to service providers that transmit data, the Privacy Act 1974 which is based on the Fair Information Practice Principle (FIPP) Guidelines;
Breach Notification Rule which requires companies utilizing health data to notify consumers that are affected by the occurrence of any data breach; and
IoT Cybersecurity Improvement Act 2019: the Bill seeks “[t]o leverage Federal Government procurement power to encourage increased cybersecurity for Internet of Things devices.” In other words, this bill aims to shore up cybersecurity requirements for IoT devices purchased and used by the federal government, with the aim of affecting cybersecurity on IoT devices more broadly.
SB-327 Information privacy: connected devices: California’s new SB 327 law, which will take effect in January 2020, requires all “connected devices” to have a “reasonable security feature.”
The above legislation is general, and in principle can cover IoT activities, although it was not designed with IoT in mind. Legislation devoted particularly to IoT includes the following:
White House Initiative 2012: the purpose of this initiative is to specify a framework for protecting the privacy of the consumer in a networked work.
This initiative involves a report on a ‘Consumer Bill of Rights” which is based on the so-called “Fair Information Practice Principles” (FIPP). This includes two principles:
Respect for Context Principle: consumers have a right to insist that the collection, use, and disclosure of personal data by Companies is done in ways that are compatible with the context in which consumers provide the data;
Individual Control Principle: consumers have a right to exert control over the personal data companies collect from them or how they use it.
China
Where we start to see the most advanced picture is in China. In 2017, the Ministry of Industry and Information Technology (MIIT), China’s telecom regulator and industrial policy maker, issued the Circular on Comprehensively Advancing the Construction and Development of Mobile Internet of Things (NB-IoT) (MIIT Circular [2017] No. 351, the “Circular”), with the following approach in the opening provisions:
Building a wide-coverage, large-connect, low-power mobile Internet of Things (NB-IoT) infrastructure and developing applications based on NB-IoT technology will help promote the construction of network powers and manufacturing powers, and promote “mass entrepreneurship, innovation” and “Internet +” development. In order to further strengthen the IoT application infrastructure, promote the deployment of NB-IoT networks and expand industry applications, and accelerate the innovation and development of NB-IoT[11]
Nowadays China already has a huge packet of regulation on technological matters:
2015 State Council – China Computer Information System Security Protection Regulation (first in 1994);
2007 MPS – Management Method for Information Security Protection for Classified Levels;
2001 NPC Standing Committee – Resolution about Protection of Internet Security;
2012 NPC Standing Committee – Resolution about Enhance Network Information Protection;
July 2015: National Security Law – ‘secure and controllable’ systems and data security in critical infrastructure and key areas;
2014 MIIT – Guidance on Enhance Telecom and Internet Security;
2013 MIIT – Regulation about Telecom and Internet Personal Information Protection
2014 China Banking Regulatory Commission – Guidance for Applying Secure and Controllable Information;
Technology to Enhance Banking Industry Cybersecurity and Informatization Development
Further, as if this were not enough, the Chinese government is being proactive and has several important laws and regulations in the Pipeline, as it can be seen from the list below:
CAC: Administrative Measures on Internet Information Services;
CAC Rules on Security Protection for Critical Information Infrastructure;
Cybersecurity Law;
Cyber Sovereignty;
Security of Product and Service;
Security of Network Operation (Classified Levels Protection, Critical Infrastructure);
Data Security (Category, Personal Information);
Information Security.
Finally, China established, in 2016, the National Information Security Standardization Technical Committee and its current work is developing a Standardization – TC260 (IT Security) on Technical requirement for Industrial network protocol and general reference model and requirements for Machine-to-Machine (M2M) security.
Latin America
The Latin American countries have different levels of development and this sets up a huge asymmetry between the domestic legal frameworks. The following is a quick regulation overview on Latin American countries:
Brazil has the “National IoT Plan” (Decree N. 9.854/2019) that aims to ensure the development of public policies for this technology sector and members of Brazilian parliament presented the bill No. 7.656/17 with the purpose of eliminating tax charges on IoT products;
Colombia has a Draft of Law No. 152/2018 on the Modernization of the Information and Communication providing investments incentives to IT Techs (article 3);
Chile has a new Draft Law Boletín N° 12.192-25/2018 on Cyber crimes and regulation on internet devices and hackers attacks;
In 2017, Argentina launched a Public Consultation on IoT regarding regulations that must be updated and how to get more security and improve the technological level of the country[12].
Most Promising Smart Environments
Smart environments are regarded as the space within which IoT devices interact connected through a continuous network. Thus, smart environments aim to satisfy the experience of individuals from every environment, by replacing the hazardous work, physical labor and repetitive tasks with automated agents. Generally speaking, sensors are the basis of these kind of smart devices with many different applications e.g. Smart Parking, Waste Management, Smart Roads and Traffic Congestion, Air Pollution, River Floods, M2M Applications, Vehicle auto-diagnosis, Smart Farming, Energy and Water Uses, Medical and Health Smart applications, etc[13].
Another way of looking at smart environments and assess their relative capacity to produce business opportunities is to identify and examine the most important IoT use cases that are either already being exploited or will be fully exploited by 2020.
For the purposes of this article, the approach was restricted to sectors consisting of the most promising smart environments to be developed up to 2020 in the European Market as displayed in the Chart below:
Vertical IoT Market Size in Europe
The conclusions of the last report of the European Commission are impressive and can help to understand the continuous development of the IoT market and how every market has to comply with the law and they will emerge facing a regulatory avalanche as mentioned in item 2 on the Regulatory Ecosystem.
Final Considerations: IoT as Consumer Product Health and Safety
IoT safety is becoming more important every day. On the one hand, as mentioned above, most concerns for IoT safety are primarily in the areas of cyber-attacks, hacking, data privacy, and similar topics; what is better referred to as security than safety. On the other hand, it can be approached by physical safety hazards which may result from the operation of consumer products in an IoT environment or system. IoT provides a new way to approach business and it is not restricted to one or other market or topic. It is a metatopic ormetamarketshowing different possibilities and applications and will be spread in the near future.
In general, IoT products are electrical or electronic applications with a power source and a battery connected by a charging device. So long as the power source, batteries and charging devices are present we have the usual risks of electrical related hazards (fire, burns, electrical shock, etc.). Nonetheless, IoT makes matters more complicated as smart devices have the function to send commands and control devices in the real world.
IoT applications can switch the main electrical powers of secondary products or can operate complex motor systems and so on. Then they have to be accurate and might provide minimal requirements to care of consumer health and safety. Risk assessment and hazard mitigations will have to adapt to IoT applications reinventing new methods to assure regular standards of IoT usability. Traditional health and safety regulations might be up to date with this new technological reality to be effective at reducing safety hazards for consumer products.
To conclude, this article was intended to summarize two main issues: I) IoT as an increasing and cross topic market which will become a present reality closer to our daily lives; II) IoT will be regulated and become an important concern in consumer product health and safety.
[1] Nóra Ni Loideain. Port in the Data-Sharing Storm: The GDPR and the Internet of Things. King’s College London Dickson Poon School of Law Legal Studies Research Paper Series: Paper No. 2018-27.P2.
[4] Nóra Ni Loideain. Port in the Data-Sharing Storm: The GDPR and the Internet of Things. King’s College London Dickson Poon School of Law Legal Studies Research Paper Series: Paper No. 2018-27.P. 19.
[5] Petar Radanliev, David Charles De Roure and others. Definition of Internet of Things (IoT) Cyber Risk – Discussion on a Transformation Roadmap for Standardization of Regulations, Risk Maturity, Strategy Design and Impact Assessment. Oxford University. MPRA Paper No. 92569, March 2019, P. 1.
And with all of the hacking news flying past us day after day, our imaginations have not even begun to grasp what could happen if a hostile person decided to hack our automotive computers – individually or en masse. What better way to attack the American way of life but disable and crash armies of cars, stranding them on the road, killing tens of thousands, shutting down functionality of every city? Set every Ford F-150 to accelerated to 80 miles an hour at the same time on the same day and don’t stick around to clean up the mess.
We learned the cyberwarfare could turn corporal with the US/Israeli STUXNET bug forcing Iran’s nuclear centrifuges to overwork and physically break themselves (along with a few stray Indian centrifuges caught in the crossfire). This seems like a classic solution for terror attacks – slip malicious code into machines that will actually kill people. Imagine if the World Trade Center attack was carried out from a distance by simply taking over the airplanes’ computer operations and programing them to fly into public buildings. Spectacular mission achieved and no terrorist would be at risk.
This would be easy to do with automobiles. For example, buy a recent year used car on credit at most U.S. lots and the car comes with a remote operation tool that allows the lender to shut off the car, to keep it from starting up, and to home in on its location so the car can either be “bricked” or grabbed by agents of the lender due to non-payment. We know that a luxury car includes more than 100 million lines of code, where a Boeing 787 Dreamliner contains merely 6.5 million lines of code and a U.S. Airforce F-22 Raptor Jet holds only 1.7 million lines of code. Such complexity leads to further vulnerability.
The diaphanous separation between the real and electronic worlds is thinning every day, and not enough people are concentrating on the problem of keeping enormous, powerful machines from being hijacked from afar. We are a society that loves its freedom machines, but that love may lead to our downfall.
An organization called Consumer Watchdog has issued a report subtly titled KILL SWITCH: WHY CONNECTED CARS CAN BE KILLING MACHINES AND HOW TO TURN THEM OFF, which urges auto manufacturers to install physical kill switches in cars and trucks that would allow the vehicles to be disconnected from the internet. The switch would cost about fifty cents and could prevent an apocalyptic loss of control for nearly every vehicle on the road at the same time. (The IoT definition of a bad day)
“Experts agree that connecting safety-critical components to the internet through a complex information and entertainment device is a security flaw. This design allows hackers to control a vehicle’s operations and take it over from across the internet. . . . By 2022, no less than two-thirds of new cars on American roads will have online connections to the cars’ safety-critical system, putting them at risk of deadly hacks.”
And if that isn’t frightening enough, the report continued,
“Millions of cars on the internet running the same software means a single exploit can affect millions of vehicles simultaneously. A hacker with only modest resources could launch a massive attack against our automotive infrastructure, potentially causing thousands of fatalities and disrupting our most critical form of transportation,”
If the government dictates seat belts and auto emissions standards, why on earth wouldn’t the Transportation Department require a certain level of security of connectivity and software invulnerability from the auto industry. We send millions of multi-ton killing machines capable of blinding speeds out on our roads every day, and there seems to be no standard for securing the hackability of these machines. Why not?
And why not require the 50 cent kill switch that can isolate each vehicle from the internet?
50 years ago, when Ralph Nader’s Unsafe at Any Speed demonstrated the need for government regulation of the auto industry so that car companies’ raw greed would not override customer safety concerns. Soon after, Lee Iacocca led a Ford design team that calculated it was worth the horrific flaming deaths of 180 Ford customers each year in 2,100 vehicle explosions due to flawed gas tank design that was eventually fixed with a tool costing less than one dollar per car.
Granted that safety is a much more important issue for auto manufacturers now than in the 1970s, but if so, why have we not seen industry teams meeting to devise safety standards in auto electronics the same way standards have been accepted in auto mechanics? If the industry won’t take this standard-setting task seriously, then the government should force them to do so.
And the government should be providing help in this space anyway. Vehicle manufacturers have only a commercially reasonable amount of money to spend addressing this electronic safety problem. The Russian and Iranian governments have a commercially unreasonable amount of money to spend attacking us. Who makes up the difference in this crital infrastructure space? Recognizing our current state of cyber warfare – hostile government sponsored hackers are already attacking our banking and power systems on a regular basis, not to mention attempting to manipulate our electorate – our government should be rushing in to bolster electronic and software security for the automotive and trucking sectors. Why doesn’t the TSB regulate the area and provide professional assistance to build better protections based on military grade standards?
Nothing in our daily lives is more dangerous than our vehicles out of control. Nearly 1.25 million people die in road crashes each year, on average 3,287 deaths a day. An additional 20-50 million per year are injured or disabled. A terrorist or hostile government attack on the electronic infrastructure controlling our cars would easily multiply this number as well as shutting down the US roads, economy and health care system for all practical purposes.
We are not addressing the issue now with nearly the seriousness that it demands.
How many true car–mageddons will need to occur before we all take electric security seriously?
When two tech titans clash in court, the outcome can reverberate widely. In what has been dubbed the “copyright lawsuit of the decade,” Oracle sued Google in 2010 for infringing its copyrights in 37 Java Application Programming Interface (API) packages used in Google’s Android software platform for mobile devices (as explained further below, API packages consist of pre-written computer programs that perform specified functions).
At the first trial in 2012, a jury found that Google infringed Oracle’s copyrights. The judge, however, concluded that the Java API packages were not copyrightable as a matter of law. In 2014, the Federal Circuit reversed and remanded for a second jury trial on Google’s fair use defense. Oracle Am., Inc. v. Google Inc., 750 F.3d 1339 (Fed. Cir. 2014). The Supreme Court denied Google’s cert petition.
In 2016, a second jury found in favor of Google on its fair use defense, and the trial court denied Oracle’s motion for judgment as a matter of law. In 2018, the Federal Circuit overturned the jury’s verdict, concluding that Google’s use of the 37 Java API packages was not fair use as a matter of law. Oracle Am., Inc. v. Google LLC, 886 F.3d 1179 (Fed. Cir. 2018).
On January 24, 2019, Google petitioned the Supreme Court for a writ of certiorari. It identified the issues presented as:
(i) whether copyright protection extends to a software interface; and
(ii) whether Google’s use of a software interface in the context of creating a new computer program constitutes fair use.
The Federal Circuit’s rulings sent shockwaves through the software industry, and fifteen parties—ranging from corporations like Microsoft to software-related associations, and intellectual property scholars—filed amicus briefs in support of Google’s petition. Microsoft warned that the Federal Circuit’s approach “threatens disastrous consequences for innovation” in the software industry by depriving third parties of access to and reuse of functional code used to “facilitate interoperability across myriad software platforms and hardware devices.” An association representing over 70,000 software developers worldwide asserted that the Federal Circuit’s conclusions had spawned confusion concerning whether longstanding practices such as sharing libraries of common software functions constitute copyright infringement. Likewise, Professor Peter S. Menell and Professor David Nimmer (the editor of Nimmer on Copyright) maintained that the Federal Circuit had “upended nearly three decades of sound, well-settled, and critically important decisions of multiple regional circuits on the scope of copyright protection for computer software.”
On March 27, 2019, Oracle filed its opposition to the petition. The tech giant identified the issues as:
(i) Whether the Copyright Act protects Oracle’s computer source code that Google concedes was original and creative, and that Oracle could have written in any number of ways to perform the same function?
(ii) Whether the Federal Circuit correctly held that it is not fair use as a matter of law for Google to copy Oracle’s code into a competing commercial platform for the purpose of appealing to Oracle’s fanbase, where Google could have written its own software platform without copying, and Google’s copying substantially harmed the actual and potential markets for Oracle’s copyrighted works?
After Google filed its reply, the Supreme Court invited the Solicitor General to file a brief expressing the views of the United States. This is where the case presently stands.
The Java Programming Language
Oracle’s predecessor, Sun Microsystems, Inc. (“Sun”) developed the Java programming language to allow programmers to write programs that run on different types of computing devices without having to rewrite the programs from scratch for each type of device. To that end, Java’s motto is “write once, run anywhere.”
To provide programmers with shortcuts for executing specific functions, Sun created the Java API, which consists of packages (akin to a bookshelf in a library), classes (akin to books on the shelves), and methods (akin to “how-to” chapters in each book). See Oracle Am., Inc. v. Google Inc., 872 F. Supp. 2d 974, 977 (N.D. Cal. 2012), rev’d and remanded, 750 F.3d 1339 (Fed. Cir. 2014).
Each method performs a specific programming function (for example, choosing between the greater of two integers). The key components of a method are: the “declaring code” that defines the package, class and method names, form of inputs and outputs, and the “implementing code” that provides instructions to the computer concerning how to carry out the declared function using the relevant inputs.
Google began negotiating with Sun in 2005 to license and adapt Java for its emerging Android software platform for mobile devices. After those negotiations failed, Google decided to use Java anyway, and copied verbatim the declaring code in 37 Java API packages (consisting of 11,500 lines of code), as well as the structure and organization of the packages (referred to as the SSO). However, Google wrote its own implementing code for the relevant methods.
In 2007, Google began licensing the Android platform free of charge to smartphone manufacturers. It earned revenue—$42 billion from 2007 through 2016—from advertising on the phones. In 2010, Oracle acquired Sun, and promptly sued Google for infringement.
The Copyright Question
In 2014, the Federal Circuit reversed the lower court’s ruling that the declaring code and SSO were not entitled to copyright protection. Importantly, while the Federal Circuit only has jurisdiction over patent-related matters, it handled the appeal because Oracle’s complaint had also included patent claims (which the jury rejected). The Federal Circuit, however, applied Ninth Circuit law to the copyright questions presented.
The Federal Circuit began by noting that “copyright protection extends only to the expression of an idea—not to the underlying idea itself.” Moreover, to the extent the particular form of expression is necessary to the use of the idea, then using the expression to that extent is not copyright infringement. This is known as the “merger doctrine” which states that if there are a limited number of ways to express an idea, the idea is said to “merge” with its expression—and the expression becomes unprotected. Further, the “scenes a faire doctrine,” bars certain standard, stock, or common expressions from copyright protection.
Thus, to use a simple example, while a book on arithmetic can be copyrighted, the idea of adding, subtracting, multiplying, and dividing cannot be. Moreover, if using symbols like “+” and “x” are necessary or commonly used to express the concepts of adding and multiplying, those expressions are not copyrightable.
Applying these principles, the Federal Circuit first observed that copyright protection extends to expressive elements of a computer program. It then rejected Google’s argument that Oracle’s expression merged with unprotectable ideas, noting that Oracle had unlimited options as to the selection and arrangement of the declaring code that Google copied. The Federal Circuit also rejected Google’s reliance on the scenes a faire doctrine. Because at the time the code was written, its composition was not dictated by external factors like “mechanical specifications of the computer” or “widely accepted programming practices within the computer industry.”
The Fair Use Question
After determining that Oracle’s declaring code and SSO were subject to copyright protection, the Federal Circuit remanded for a jury trial on Google’s fair use defense. As noted, the jury found that Google had established the defense, but the Federal Circuit overturned that verdict.
The fair use defense is a judge-made doctrine that has been incorporated into the federal copyright statute as Section 107, which provides that “the fair use of a copyrighted work…for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.” To determine whether particular copying constitutes fair use, the statute identifies the following factors as:
(1) “The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.”
(2) “The nature of the copyrighted work.”
(3) “The amount and substantiality of the portion used in relation to the copyrighted work as a whole.”
(4) “The effect of the use upon the potential market for or value of the copyrighted work.”
The Federal Circuit ultimately concluded that because Google’s copying was for a highly commercial purpose, was not qualitatively insignificant, and substantially harmed Oracle’s own licensing efforts; the copying was not fair use as a matter of law, notwithstanding the jury’s verdict to the contrary.
Because APIs are key to broad acceptance of standardized software functions, IMS computer and software expert Dr. John Levy believes that were the Supreme Court to affirm the Federal Court’s ruling, it may severely limit the spread of useful API’s to important code bases. As an example, Dr. Levy notes that a small company will usually want to make its declaring code available to all users and developers, so that the underlying application code will get the broadest possible use and market share. The developer counts on having a competitive set of implementing code to make money.
According to Dr. Levy, the Federal Circuit may have been influenced by the fact that Google made so much money using the copied declaring code. But as evidenced by the large number of amicus briefs, the broader software industry cares more about defending a broad reading of “fair use” than assessing damages against companies who make money from copied declaring code.
Dr. Levy sees the issues in the Oracle case as similar to those in a case he worked on as an expert back in the 80386 chip days. In that case, Intel owned the instruction set of the 386 chip. But because Intel customers didn’t want to be limited to a single source for these Intel-compatible processors, Intel licensed the instruction set to other chip manufacturers.
“One licensee produced chips that performed the Intel-owned instruction set. Intel sued that licensee for copyright infringement of the underlying microcode (the implementation of the instruction set in the chip designed by the licensee company),” recalled Dr. Levy.
A federal court ruled that the microcode (firmware) was indeed copyrightable, but that there was no infringement under the “limited expression” doctrine explained above. There simply were not many ways to implement the licensed instructions in microcode, and therefore the licensee’s implementation did not infringe Intel’s own implementation. In the Oracle case, however, the Federal Circuit concluded that there were many ways for a programmer to select and arrange the declaring code that Google copied.
There is no greater issue currently facing the aviation bar than whether the Federal Aviation Act (“FAAct”) preempts state law by occupying the entire field of air safety. In other words, do federal standards of care exclusively govern liability in the aviation industry, or are states allowed to govern aspects of aviation safety through a patchwork of unique tort or regulatory liability regimes? This question is the subject of a petition for writ of certiorari pending before the U.S. Supreme Court, seeking review of the Third Circuit’s decision in Sikkelee v. Precision Airmotive (2016). In Sikkelee, the Third Circuit concluded that Abdullah v. American Airlines – in which it previously held in the context of in-air operations that “federal law establishes the applicable standards of care in the field of air safety, generally, thus preempting the entire field from state and territorial regulation” – did not apply to state product liability claims concerning the design of aircraft engines.[1] The Supreme Court has asked the U.S. Solicitor General to weigh in on this important question.
Most recently, while the Sikkelee cert petition is pending, the Second Circuit decided Tweed-New Haven Airport Authority v. Tong (2019). In Tweed, the Court of Appeals doubled down on its prior holding in Goodspeed Airport v. East Haddam Inland Wetlands & Watercourses Commission (2011) that the FAAct occupies the “entire field of aviation safety” to the “exclusion of state law” and consequently preempts state laws that sufficiently interfere with federal regulation of air safety. Though the Third Circuit in Sikkelee tried to distinguish and reconcile such other broad field preemption decisions, the analytical split between them – made even more visible in Tweed – is unmistakable. The resultant uncertainty is antithetical to the very purposes of the FAAact – to create a uniform system of federal regulation for aviation industry participants. Tweed thus underscores the need for the Supreme Court to grant certiorari and resolve the split.
The Second Circuit’s Approach to Field Preemption
In Goodspeed, a small privately owned airport sought a declaratory judgment that local environmental and wetlands laws were preempted by the FAAct. The Second Circuit affirmed a “thorough and well-reasoned” district court decision using a two-step analysis for field preemption. The first step asks whether Congress intended the entire field to be occupied by federal law to the exclusion of state law. If so, the second step considers whether the state law in question sufficiently intrudes upon that field.
Applying the two steps, the Second Circuit had little difficulty concluding first that “the overall statutory and regulatory scheme” under the FAAct is “evidence of ‘a clear congressional intent to occupy the entire field of aviation safety to the exclusion of state law,’” because it “has established a comprehensive regulatory scheme ‘addressing virtually all areas of air safety,’ including the certification of aircraft, most airports, pilots and mechanics, air traffic control systems, air navigation and communication, and airspace classifications.” In so holding, the Court noted that it was joining the First, Third, Sixth, Ninth, and Tenth Circuits.
Turning to the second question, the Goodspeed Court considered whether the state environmental and wetland law at issue, which simply required a permit before cutting down trees in protected wetlands, “sufficiently interferes with federal regulation that it should be deemed preempted.” Examining the purpose and effect of the state law, the Court found that the law did not sufficiently enter into the scope of the preempted field: “Goodspeed Airport is not licensed by the FAA; it is not federally funded, and no federal agency has approved or mandated the removal of the trees from its property. Indeed, in its response to a formal inquiry from the district court, in this case, the federal government disclaimed any authority to order the trees’ removal.” In other words, as the district court had explained below, “Courts have long distinguished between state laws that directly affect aeronautical safety, on the one hand, and facially neutral laws of general application that have merely an incidental impact on aviation safety.”
In Tweed, the Second Circuit applied the same, two-step analysis in considering whether a state law preventing the expansion of an airport runway was impliedly field preempted. Tweed is a small commercial Airport. Its largest runway is currently 5,600 feet long making it one of the shortest commercial airport runways in the country, substantially limiting commercial flights. In 2002, Tweed had prepared a Master Plan with Federal Aviation Administration (“FAA”) involvement for upgrading its airport, including extending the runway. In 2009, however, the Connecticut legislature enacted a statute expressly blocking the expansion of the runway. In response, Tweed filed a declaratory judgment action seeking a determination that the statute was preempted by the FAAct. The district court rejected Tweed’s arguments, finding that Tweed lacked standing to sue, and that, even if it had standing, the FAAct did not preempt the statute. The Second Circuit reversed, finding both standing and preemption.
With regard to preemption, the Court of Appeals first reiterated the Goodspeed holding that the FAAct “was enacted to create a uniform and exclusive system of federal regulation in the field of air safety. . . . It was passed by Congress for the purpose of centralizing in a single authority . . . the power to frame rules for the safe and efficient use of the nation’s airspace.” Consequently, it reasoned, state laws that conflict with the FAAct “or sufficiently interfere with federal regulation of air safety are preempted.”
Thus turning to the second step in the analysis, the Court considered whether the statute fell within the scope of the preempted field. It found that the statute directly impacted air safety by limiting the length of the runway, which in turn limited the number of passengers, amount of baggage, and even the type of planes that could use the airport. The Court also considered the extent of FAA involvement with Tweed overall and with the length of the runway specifically, concluding that the “FAA’s involvement with Tweed and its runway project has been direct and significant.” As the Court explained, Tweed is federally regulated as part of the Tweed-New Haven Airport Layout Plan, which requires approval by the FAA. Additionally, as a primary commercial service airport, Tweed needs to hold an operating certificate pursuant to federal regulations. It is required to submit its Master Plan to the FAA, which, as early as 2002, included a plan for extending the length of the runway. The FAA directly approved the Master Plan, including the extension of the runway. For all these reasons, the Court held that the state law was preempted.
The Third Circuit’s Conflicting Approach
In Abdullah v. American Airlines (1999), the Third Circuit similarly considered whether the FAAct preempted the field of air safety thus barring a tort claim premised on an alleged failure by aircraft crew to warn passengers of expected turbulence. The Plaintiffs alleged negligence by the pilot and flight crew for failing to either avoid the turbulent conditions or warn the passengers so they could protect themselves. The Court of Appeals found implied field preemption based on its conclusion that the FAAct and relevant federal regulations “establish complete and thorough safety standards for interstate and international air transportation that are not subject to supplementation by or variation among, jurisdictions.” Indeed, the Third Circuit expressly distinguished its holding from those in which courts had only found preemption of “discrete aspects of air safety,” explaining that “federal law establishes the applicable standards of care in the field of air safety, generally, thus preempting the entire field from state and territorial regulation.”
Despite the breadth of this express holding in Abdullah, the Third Circuit subsequently held in Sikkelee that the FAAct does not preempt state law aviation product liability claims. The plaintiff had alleged that a design defect in the carburetor of an airplane engine resulted in the aircraft crashing shortly after takeoff. Examining whether that claim was subject to implied field preemption, the Third Circuit did not use the Second Circuit’s two-step analysis, but instead essentially conflated the inquiries, focusing entirely on whether there was pervasive enough federal regulation addressing the particular aviation safety aspect at issue to rebut the general presumption against preemption.
In that regard, the defendants pointed to the extensive certification process required by the FAA in order to receive a type certificate for the engine: “This certification process can be intensive and painstaking, for example, a commercial aircraft manufacturer seeking a new type certificate for wide-body aircraft might submit 300,000 drawings, 2,000 engineering reports, and 200 other reports in addition to completing approximately 80 ground tests and 1,600 hours of flight tests.” As the defendants explained, the type certificate “certifies that a new design for an aircraft or aircraft part performs properly and meets the safety standards defined in the aviation regulations,” and any changes to the design thereafter must be approved by the FAA. A “major” change to the type certificate requires the issuance of an amended or supplemental type certificate. The defendants argued that, because a type certificate applicant goes through such a rigorous regulatory process culminating in the certification of a part as meeting safety standards defined in the aviation regulations, the question of whether a part design was reasonably safe under state law was preempted by the FAAct.
The Third Circuit disagreed. Focused on the general presumption against preemption, the Court of Appeals considered the fact that “aviation torts have been consistently governed by state law” as far back as 1914. It also read the text of the FAAct as “not signal[ing] an intent to preempt state law products liability claims.” The Third Circuit dismissed the extensive regulations addressing the engine design and certification process as merely establishing “a baseline requirement” for “minimum standards.”
In thus holding that the FAAct did not impliedly preempt the field of aviation safety pertaining to engine certification, the Third Circuit tried to distinguish and reconcile its approach to field preemption with that of other Courts of Appeals, including the Second Circuit: “Appellees observe that various Courts of Appeals have described the entire field of aviation safety as preempted, but, on inspection, even those courts have carefully circumscribed the scope of those rulings. The Second, Ninth, and Tenth Circuits all assess the scope of the field of aviation safety by examining the pervasiveness of the regulations in a particular area rather than simply determining whether the area implicated by the lawsuit concerns an aspect of air safety.”
Not so. Again, for example, the Second Circuit has not started its analysis by “examining the pervasiveness of the regulations in a particular area” of aviation. In direct conflict with Sikkelee, the Second Circuit through Tweed has now twice readily found at the outset of its analyses that the FAAct impliedly preempted the “entire” field of aviation safety. Only thereafter has the Second Circuit examined the state law at issue to determine if it sufficiently intruded into the preempted field (Tweed), or, rather, was merely incidental to it (Goodspeed).
This fundamental difference in analyzing field preemption belies the Third Circuit’s attempt to distinguish product liability cases (Sikkelee) from in-air operations (Abdullah). Indeed, the Second Circuit acknowledged no such distinction in Tweed, and in its predecessor, Goodspeed, the Court affirmed the district court’s “thorough and well-reasoned” explanation that, in response to the FAAct’s “congressional mandate, the FAA has established a comprehensive regulatory scheme addressing virtually all areas of air safety, including the certification of aircraft.” Thus, unlike the Third Circuit, the Second Circuit would not start its analysis of a case involving engine product liability by examining whether the pervasiveness of aircraft design and certification regulations sufficiently evinces an intent to overcome a general presumption against preemption, but, rather, by yet again recognizing field preemption over all aspects of aviation safety – including engine design – and would then ask whether the state tort standards of care at issue sufficiently intrude upon the scope of that field. In that regard, we think the Second Circuit would have little difficulty concluding that they do. Like the extent of federal involvement with the physical layout of the airport in Tweed, the level of federal involvement in engine design and certification is indisputably “direct and significant,” such that state tort law standards of care that purport to govern the safety of engine design clearly intrude upon it.
Conclusion
The fundamental and critical circuit split on the proper analysis of implied field preemption in aviation cases, illustrated and emphasized most recently by Tweed, undermines the very purpose of the FAAct of creating uniform and consistent standards of care for safety in the aviation industry. We hope the Supreme Court will grant certiorari and resolve it.
[1] The Third Circuit remanded the case for consideration of conflicts preemption and on subsequent review of the district court’s determination that the product liability claims were conflict preempted, it reversed and remanded for further proceedings. The pending cert petition seeks review of both preemption rulings. This article, however, is focused solely on field preemption.
The cannabis industry is rapidly expanding in the United States, with multiple jurisdictions and corporations seeking to accommodate the evolving cannabis market. Carlton Fields attorneys Kevin McCoy and Jennifer Tschetter discuss the emergence of cannabis as a billion-dollar, mainstream industry; explore its impact on corporate clients; and analyze the ever-evolving legal landscape in this space.
Transcript:
Kevin: It’s an exciting day here at Carlton Fields. My name is Kevin McCoy. I am a trial lawyer here in the Tampa office of Carlton Fields with a background in commercial litigation, and today I’m going to be speaking with Jennifer Tschetter out of our Tallahassee office, who is the co-chair of our Cannabis taskforce, which is a very exciting area of the law and one that we are happy to be working in and learning about and helping clients with. So without further ado, welcome, Jennifer.
Jennifer: Thanks, Kevin.
Kevin: Thanks for making the time today. First of all, why don’t you give us a little background about you?
Jennifer: Sure. I’ve been practicing law about 18 years and during that time I spent 10 of them in public service, primarily at the Department of Health here in Florida.
Kevin: Wonderful. In the Department of Health, what were some of the areas that you touched upon in particular with respect to health issues, or have you been involved in the medical marijuana and the marijuana push here in Florida?
Jennifer: Yes, in fact, I was general counsel at the department when medical marijuana first came to this state. So, since the inception of the regulatory structure, I’ve either been intimately involved as a regulator, or since my move to private practice just a couple of years ago became more involved on the private side.
Kevin: Wow, so you’ve been in the front lines?
Jennifer: Yes.
Kevin: You’ve been in the front lines as the government has wrangled with this, I won’t say with the forbidden fruit anymore, because I don’t know that we’re in that land, but you’ve been fighting the fight for a while on both sides of the isle, I suppose?
Jennifer: Yes.
Kevin: So, you know, I use that term, the forbidden fruit, and it’s amazing to me, literally, that we are sitting here at a firm like Carlton Fields and we’re talking about Cannabis law, which, when I started here, I couldn’t have contemplated that that would be an area that we are growing and we are developing experience in and counseling clients on. But, it’s here. And, why don’t you talk to us a little bit about how here it is? I mean, in reality that this is no longer, you know, we don’t think of this anymore like this is two guys doing a drug deal in a parking lot, this is billion dollar industry. Is that fair to say?
Jennifer: Fair to say. So some of the things that I think are most interesting is to watch the evolution of this industry. If you’ve seen, I’m sure everybody has seen those maps, you know, that have varying colors of green based on, you know, are you a recreational state or a medical marijuana state, a low THC state and if you think about that 20 years ago there was one green state on that map and that was California and now you look at the states and there are only 3 that don’t have any color anymore. At least, in some form, 47 states have said you can use this on some level. Might be low THC. Might be full spectrum. Could be recreational. But, those types of statistics are interesting to me. The other ones that come to mind are 1 in 4 Americans right now live somewhere where purchasing recreational cannabis is legal. The farm bill’s delisting of hemp has opened another huge industry and they’re all derivatives of the cannabis plant which used to be forbidden.
Kevin: Let’s talk for a minute for those who are maybe new to this space, new to this industry, about that real distinction. Because that’s one that maybe I didn’t appreciate until recently. When we talk about cannabis, it’s easy to confuse some of the aspects of cannabis as it, as between marijuana or between CBD, which is all the rage of late. Can you just briefly give us an overview of the differences that happen between cannabis, between marijuana, between CBD? How does all that break down for somebody who’s really not deep in this space?
Jennifer: I’ll try. So, our definition in the United States of what constitutes the difference between hemp and marijuana, and they are both species of the same plant, cannabis. So they’re both cannabis, but what distinguishes them is their THC level and THC is the thing that most people think about as creating the euphoria typically associated with marijuana. In hemp, the THC level is .3% or less. If the cannabis plant, as it’s growing, has a THC level higher than .3%, it’s marijuana. So, that’s the distinction is the THC level in each.
Kevin: So, we’ve talked a little bit about some of the aspects that are happening and you talk about the delisting of hemp from the Controlled Substances Act. What has that or what have you observed the impact of that having as impacting some of the clients that we deal with in terms of, you know, these are corporate clients. These are big. They’re pharmaceutical. They are manufacturers. They are real businesses who are now looking at this. Can you just talk about what you’ve seen in industry as, for example, you mentioned CBD, as that has been delisted, or hemp I should say, has been delisted from a controlled substance.
Jennifer: So, CBD, I think there’s a place to start. So, hemp has opened the opportunity, not only for industrial uses for hemp, but it has created another potentially billion dollar industry in this country with the passage of the farm bill in 2018. So, those billion dollar industries don’t come around very often and one aspect of it is the CBD industry. Because hemp is low in THC, one of the other cannabinoids that’s very popular is CBD, which has been documented to relieve stress, anxiety, improve depression and can also alleviate some joint aches when applied topically. So, CBD is in high demand around the country and when it is extracted from the hemp plant, it can be infused in a variety of products: shampoos, lotions, gummy bears, drops. So, that created an enormous industry, but for every business in this country, the potential to at least contemplate whether a CBD additive would be helpful for their product and understanding how to navigate this new regulatory structure that’s kind of emerging, if you do chose to that, has been challenging.
Kevin: You mentioned the word challenging. What are some of the challenges that you are seeing as clients are coming to you for guidance as they’re entering, let’s just call it, the broad umbrella of cannabis without getting into whether it’s marijuana or CBD based on the .3% that you just described. But, what are some of the top, if you had to give us the top five challenges that people are coming to you, businesses, I mean we’re not talking little players here, we’re talking about real corporate clients, they need help, what are the areas that are the hottest right now that you are seeing?
Jennifer: So, compliance is one and the unfortunate part about that, and the challenge that goes with that, is the shifting sand that is the regulatory structure. When hemp was, when cannabis, I’m sorry, was put on the controlled substance act in the 70’s, it stopped all research, it stopped all production of both hemp and marijuana in this country. Because of that, everyone is just now putting brand new regulatory structures in place and research is ongoing and that continued compliance, I think that that is the number one challenge for a business trying to get in this market right now is that you can get a snapshot from a law firm as to whether your business is in compliance today, but the law in North Carolina can change tomorrow. The law in California can change next week and it’s that ongoing uneasiness and being willing to move in that space aggressively despite the potential for the bottom dropping out at any given moment.
Kevin: It sounds like on the compliance piece then, what folks are facing in this industry is right now, it’s you know, technology as I’ve seen it on, in any number of areas, whether it’s a plant, whether it’s a new gadget, a widget, whatever it may be, technology always moves faster than the law and the law is slow to catch up and that’s not necessarily a bad thing because we rely on law. But right now, what we’re dealing with is a regulatory patchwork, if you will, where step over the line from state X to state Y, you could be facing very different types of regulations, whether it’s labeling, whether it’s requirements and sourcing. Can you just talk about some of the things you’re seeing in that regard? I mean, for example, you know I think to the bill that we just passed here in Florida, the hemp bill, and some of the things that, for example, you would see here in terms of a Florida based hemp business that stick out to you that maybe could differ from other states around the country.
Jennifer: So, I think every state is going to have, and this will be a challenging piece of it, different rules on how you can bring that product into the state. And so, the USDA has issued some guidance that said everybody get ready, the farm bill said you can move this from state to state. It’s now a legal agricultural commodity. That’s great, except it does have an impact on agriculture and so, every agriculture department around the country right now is trying to figure out how to protect its farmers. And so the rules on how you bring product into this state, I think, will be one of the first challenges. That’s a patchwork where if you don’t know the law, you might not know that you need to be escorted into the state by our department of agriculture after you have an inspection, and when you get here, your truck needs to be a closed truck…
Kevin: Mm-hmm.
Jennifer: …in order to move about the state of Florida. Those are the proposed regulations.
Kevin: Sure.
Jennifer: We’ll see where they end up. Those will vary by state and part of it is that, I know here in Florida, it’s a perfect example. We’re so sensitive to invasive species. When you look at the cannabis plant, what the plant researchers have told you is that it’s a more invasive species, hemp, cannabis that would include hemp. It’s a more invasive species on their scale from 1 to 25, then Kudzu.
Kevin: Mm-hmm.
Jennifer: So, that should give us all pause as to whether we should be too quick to move so quickly in a space and eager, because it can have lasting implications.
Kevin: You know, it’s funny that you bring up this patchwork and states putting in place these kind of regulations to, maybe, protect their own, if you will. I think the last time I had ever thought about the commerce clause of the constitution was about a week ago when you and I were comparing notes on, I’m not so sure if this particular regulation doesn’t cut too close on protecting, you know, interfering with that. So, what are some of the legal issues that businesses are looking at as cannabis the plant impacts them? I mean, I would have to imagine, you’re dealing now, not only as a business dealing in cannabis, but, I mean, it’s gotta impact employment policies. It’s gotta be impacting, I mean, it’s actually, not to overstate it, but it’s almost like, what is this not going to impact, you know, in terms of policies, in terms of industry? Talk to us about some of the things that businesses have to be looking out for in terms of regulatory patchwork and you can interpret that or answer that in whatever way you want, because it’s a very broad question. But, based on what you’re seeing and what people are coming to you with, what are some of those top items outside of, maybe, compliance or regulatory?
Jennifer: There isn’t an item.
Kevin: Yeah.
Jennifer: This industry will touch almost all practice groups in law firms. When you think about it, because it’s both medicine and something that people want to use for recreational pleasure, it’s different than other things. That’ll make its impact on schools and Girl Scout troops. I mean, they’re gonna have to deal with issues related to cannabis and figure out what they can and can’t do for people that either have a prescription to take this medication, or CBD products limited, they’re not high in THC, so those are, there’s not an industry that I can think of that won’t be impacted by this.
Kevin: I tell you what, I have to agree and I am not anywhere near as versed in this space as you are. Admittedly, I’m a newcomer to understanding this as an industry. But, in the short time that I’ve been working with clients in this space, I mean, I have seen this touch land use. I have seen it touch rewriting employee handbooks which we’ve had to do, you’ve got tax issues. You’ve got money transmitter issues. You’ve got, how, where’s… great your business is doing well, but where are you going to put all that money? You know, US banks are slowly coming around. I think, part of that is because they’re pushing Congress to give them the clearance that they want to be able to touch some of this money.
You mentioned the USDA. You’ve got ongoing issues with the FDA and what are they going to do? And I think they, you know, they have been studying this and rightly so, which is, which is their task to do but, industry is crying out for them to make a move, to take a stand or at least a position and I think that will help industry in terms of knowing the rules of the road because right now, tell me if you disagree but, it’s almost like we are in the wild West in some regard because people are trying to predict what the regulatory framework will be and they’re not going to stop business while they’re waiting on government. So, they’re trying to do the best they can. Is that consistent with what you’re seeing?
Jennifer: Yes, and also a lot of innovation. So, the sky is the limit. You know, I was telling someone the other day, think about how different this industry is than some other highly regulated industries. And I think part of that is the federal prohibition on it, which makes it confusing to talk about. There’s not that federal overlay that you see in some other industries which is why, for example, we maybe don’t see nicotine gummy bears and we don’t see other products that are innovative. I think that they can be helpful, enjoyable. Those are all good things and they’re all possible in this cannabis space.
Kevin: What other areas, you know, we talk, we think about this in terms of somebody who’s directly in this space in terms of you’re cultivating, in terms of you’re manufacturing or you’re distributing whatever that product may be, whether it’s biomass, whatever you’re doing, maybe textile, but, it seems like they’re, this is going to touch a lot of ancillary businesses too. So, for example, you know, you look at the Florida farm bill, you have to have an approved third party independent lab testing your batches of product. So, talk about some of the ancillary industries that you’ve been working with in that regard, and just, setting aside not actually being in directly in the space but maybe a secondary player and areas where you’ve been giving counsel and people have been coming to you for your knowledge.
Jennifer: Sure. The ancillary businesses that we work with most often are those that are directly related. I mean, they’re driven by the cannabis space. And you’re right; the independent testing labs are one of them. And so we work with them and, you know, try to set high standards for those labs whether it be through accreditation and then work with the regulators to put appropriate regulations in place. And I think that’s where when clients can be introduced as an asset, a subject matter expert. Who knows better how to test and what’s possible to test for in a parts per million or parts per billion than the lab folks? And that’s why it’s been a pleasure to represent them and learn a lot about that space.
Other ancillary businesses are the seed to sale tracker. So what some people might not know is that virtually every state that has put in place a medical marijuana program puts in a seed to sale tracking system, and that literally tags plants from the time that they are growing in a cultivation room and you track them with bar codes all the way through the production process so that when you’re all done you know exactly what product was made with that plant. And those type of tracking mechanisms are essential to prevent against diversion in states that don’t want to have a legal recreational adult use market yet. So, that’s another ancillary business that is all unto itself but, the technology and information technology that goes into that is highly complicated and sophisticated. I think you will see that on the hemp side as well. In that most, one of the greatest concerns in the hemp industry is, where are we growing this? And part of that is to understand just how far the reach will be. Can you cross pollinate an orange field 10 miles away or is it 5 miles away? We’re gonna just all learn together. I think it’s an orange grove, candidly. But, those are the things that I think will be interesting and those ancillary businesses are creatively looking for solutions.
There are also drone manufacturers that will be essential in the GIS mapping of hemp cultivation plots all over this country that will help us understand the impact on other crops and also be a tool for law enforcement because I think what can be confusing for people – we were talking about it before in interstate shipments – is that if you were to cut up, you know, grind up a batch of hemp and a batch of marijuana or you drive by a field of hemp the terpenes are the same and it will smell a lot like that smell that we all associate with adult use or recreational marijuana. And so, when you see a load of it coming over state lines, that’s confusing to law enforcement, and rightfully so. Rightfully so. I think that there’s a lot of entrepreneurs looking for innovative solutions to help regulators to help the industry do it better, do it faster. And this is an industry that seems receptive to all those things.
Kevin: You know, you touch on a really interesting point. I went to one of the recent rule-making sessions here in Tampa that the Department of Agriculture put on. And there was a lot of discussion over the disposal requirement and the rule. And it actually surprisingly got a lot of pushback from the audience and a lot of questions about why would you impose these costs. And I actually thought the response from the folks from the Department of Agriculture sitting on the panels was encouraging because their response was, “Listen, there’s two paths here. If you get a crop of hemp that, we come out and we test it and it’s above .3% because of whatever factor happened, inadvertently it was too hot, who knows, you got bad seed. We can make that a law enforcement issue and now you have an entire acre or acreage of plant that is technically now illegal because of something that was out of your control. Or, what we have done is come up with this disposal plan that we’re still trying to flesh out but we can have a plan where we go, ‘This is no good. We’re going to give you the opportunity to dispose of it in the appropriate way.’ And then we don’t need to call law enforcement.” But, your comments trigger to me, what are you seeing in terms of the give and take of what’s happening or the receptiveness of regulators whether it’s federal or state to take input and be receptive to the idea that we’re going to work together on this. It’s not us versus you. It’s imperative to have relationships there and to be part of that discussion and sitting at that table having those conversations.
Jennifer: Both the Department of Health and the Department of Agriculture and Consumer Services are very partner oriented. They’re looking for solutions. I think you find that the law enforcement community as well, and everyone is trying their best to disseminate information. So State Attorney Dave Aronberg this week released some guidance that things that smell like marijuana anymore aren’t necessary probable cause for a search of a vehicle.
Kevin: Sure, yeah.
Jennifer: It might not be, because there is smokeable hemp on the streets in Florida. So, you can’t just smell a car and think you can search it. That was distributed widely. Generous of the law enforcement community to not limit it to one particular jurisdiction but instead to share it more broadly. They’re also looking for solutions that work for everyone. Everybody wants the bad actors out of the space, but everybody knows that most of the actors that are coming here are looking for an opportunity and mean to do it the right way. And I think the state of Florida has had a position for a long time – and I have not seen it change – that the goal is always compliance. It’s not punishment, but instead compliance is our goal.
So, that didn’t surprise me. I, too, was very pleased to hear that Ag had taken the position that even though it’s .5% THC, it’s still hemp. You’re just going to destroy it in accordance with your waste management plan.
Kevin: Right.
Jennifer: And that is a very generous interpretation and one that is very farmer-friendly.
Kevin: Well, you touch on an interesting topic. And I don’t think us sitting here talking about this topic in Florida we could get through this first podcast without talking about the situation of the grandmother over at Disney. But, to me what was encouraging out of that entire issue was somebody made a law enforcement decision on the street, but after, maybe there was some talking and some education back in the State Attorney’s office, about the direction. We were on the verge at that time of the hemp bill passing, which would, that same instance right now, assuming that bottle was oil that was .3% or less, that would have been a no probable cause. That would have been a no arrest. And, so it was encouraging, while probably maybe the lady who was arrested could disagree about the experience there, it was encouraging to see that law enforcement with, given a little more time, was already thinking about this. And I think that’s maybe part of the education component that’s gonna come across the board. It’s not just industry, but it’s law enforcement, it’s government, and it’s, let’s, let’s not consume resources here unnecessarily, unless, as you say, we’re focusing on some of the bad actors who may be ruining it for the rest of us, so to speak.
So, the next thing I want to talk about today, Jennifer, is where do you think the opportunity is? We’ve talked about some of the regulatory headwinds and we’ve talked about how businesses might be facing some of those, which can be bad or good depending on what side you’re on. As lawyers, we love, that’s where we make our money, navigating that for folks. But, talk about the opportunities that are there, the opportunities for those who want to get in the space and are new to the space or contemplating getting in the space, whether they’re investors, they’re business, they’re start-ups. What are you seeing based upon the practice that you’ve built around cannabis?
Jennifer: The farm bill definitely changed the field in that when clients call now and they want to get into this space, they want to do something because these are two new burgeoning billion dollar industries that don’t come along very often. How do I get in is usually the question. And what I’ve been telling everyone since passage of the farm bill, and in Florida specifically the passage of our state hemp bill, is hemp is the way to go. It’s an unlimited number of licenses as opposed to marijuana which is a very limited number of licenses. We started with five total in the entire state of Florida. Five licenses would be given out for 20 million people. That’s slowly growing, but still there’s only 22 companies that get to participate in that space. Contrast that with hemp where you can pick just a part of it and as many people as want to participate can. So, I think if there’s opportunities right now, it’s in the hemp space.
And there are corollaries between the two industries that if ever, if marijuana ever turns out to be a space where there are more opportunities – they either remove the vertical integration requirement from the license so that you could have one person licensed to grow and one person licensed to sell and another person licensed to process. That may happen in this state and that would create more opportunities. But until it does, there’s only a few licenses out there and you have to do everything in that chain.
The nice part about these two industries is that those overlaps both require processing to get finished product that patients want to use. Both require retail sales and how to market that product in compliance with FDA regulations on, you know, making sure that you don’t claim they have significant health effects. So there are a lot of overlaps that I think for someone that wants to get involved in the industry right now, what I’m counseling them is that start in the hemp space. That’s the place to be. There are no opportunities in Florida right now in the medical marijuana space unless you want to buy one of those licenses for a significant amount of money. And, that’s the only way to get in that space right now and probably the only way to be there for the foreseeable future. With the state of litigation on the medical marijuana side of the industry, I don’t anticipate that we’ll see any new licensees. Certainly not in 2019 and it will be a long way into 2020 before we get to that place. So, for folks that want to get in right now and do something, they should look at hemp as that opportunity.
On the investment side, that can vary. I think that depends upon the quality of the company.
And, I think, one of the things we haven’t touched on today but I think will root itself out eventually in these industries are things like pretenders and frauds and burgeoning industries can attract those kinds of people. So, I think that’s where due diligence is really important on the investment side: understanding the regulatory structures, understanding whether they are scaled up. They can tell you they want to put 100 dispensaries in a state, but if they have a 100,000 square foot cultivation facility, that’s probably not even possible. You could never stock the shelves. So, those are the things that I think due diligence will help investors, and that’s why they’re consulting people like you and me to talk through those issues. But, for investment, I think both spaces are good. For people that want to work, make money, and be a part of something new, I’d take a good look at hemp.
Kevin: That’s a fantastic insight. You know, and from what I’ve seen and just some of the market research and then in some of the other things that you can just find on the Internet, you know, you go back to where we started in the medical marijuana versus the hemp side, and then in terms of CBD, that whole dichotomy that’s happening there in terms of people who hear the word “cannabis” have always associated it with marijuana. And it’s, you know, I may or may not be interested in that, but the whole concept of the CBD space now is coming out where essentially, at least from the marketing standpoint, you can have the benefits of marijuana without the THC and without the high. And the market that I’m seeing in terms of opportunity – I think this is what you’re talking about, too, with hemp – is that this market’s gonna explode. I mean, because more people who would never even contemplate for whatever reason that they would ever touch a cannabis product are now saying, “What’s so bad about this one?” You know, “I can still function, I’m not gonna be a pothead, if you will. I’m just gonna take the benefits from this plant that have been forbidden maybe for no good reason, we’re coming to find out, for such a long time.” So, I’m glad to hear you talk about that as an opportunity because even beyond, you know, the CBD and the ingestible space or the topicals, you get into textiles, you get into manufacturing of ropes, and everything else that goes with it. And so…
Jennifer: Drywall, concrete, I mean, all those hemp-based products. I heard Ag say the other day there are 25,000 known hemp-based products ready to go as soon as we have enough hemp in this country. And when you talk about drywall that is mold and fire resistant and I think about that in beach houses, that’d be perfect, right? So, I’m really excited about the opportunities that this space presents. And hemp, I think, is the future.
Kevin: I tell you what. This entire industry, to me, is just so exciting because it’s new, it’s fresh, it’s one of those opportunities that in the law, to have something that is just so untamed come along, you don’t see that very often. And I don’t know about you, I had a great time today. I hope you would join me again because next time I would really like to get into some of the Florida-specific stuff we’re seeing, including you’ve talked about some of the appellate issues maybe that the Florida Supreme Court will be asked to weigh in on some stuff. So, will you join me again? Maybe we can try a next session?
Jennifer: Absolutely. And if it’s after August 8th, we should know more answers. So.
Kevin: Fantastic. And thank you, again. You are definitely very, very deep in this industry and I’ve learned a lot today, so thank you so much for joining us.
Jennifer: It was a pleasure. Thanks, Kevin.
Kevin: I also want to thank our audience for joining us today. We had a great time. We hope you did, too. We hope you will check out more about our practice at carltonfields.com. There you can find the landing page for the cannabis taskforce that Jennifer is the co-chair of and you can learn more about what we are doing in this space as it impacts businesses that are running throughout this industry.
Well, it had to happen someday. Though Chicago’s Willis Tower hasn’t held the honor of being the world’s tallest building since 1998 and dropped off the world’s 10 tallest list in 2016, the famous 1973 skyscraper had still held on to the claim of tallest roof height in the Western Hemisphere. Until now. As reported in Curbed Chicago on July 29, New York’s Central Park Tower overtook the 1,453-foot-tall Chicago icon on its way to an eventual final roof height of 1,550 feet.
Roof height took on special importance among Chicago skyscraper fans in 2013 when Willis officially lost its status as the tallest building in the U.S. to New York’s One World Trade Center under somewhat contentious circumstances. Despite the East Coast skyscraper’s considerably lower 1,368-foot roof, it managed to dethrone the Chicago tower by using a 1,776-foot-tall decorative spire. The twin antennas of Willis, however, were determined not to count toward official building height, per the Council on Tall Buildings and Urban Habitat rules.
What started out as a proposed merger between two of the largest packaged seafood manufacturers spawned a lengthy criminal investigation into antitrust violations in the tuna industry by the Department of Justice (DOJ) and multiple class and individual civil lawsuits. After four years of litigation, a major development in the class action lawsuits occurred– the Court certified three putative classes.
In 2015, the Department of Justice investigated a proposed merger between Thai Union Group P.C.L. (the parent company of Chicken of the Sea) and Bumble Bee Foods LLC. As the DOJ’s civil attorneys reviewed information related to the merger, they discovered materials that appeared to raise criminal concerns.[1]
Chicken of the Sea then “blew the whistle” to the DOJ regarding their anticompetitive conduct. This admission helped DOJ reach plea agreements with two other manufacturers, Bumble Bee[2] and Starkist,[3] as well as three packaged seafood executives—two from Bumble Bee[4],[5] and one from Starkist[6]. In connection with its guilty plea, Bumble Bee agreed to pay a $25 million fine, while Starkist’s fine is still pending. Bumble Bee’s CEO has also been indicted, and faces up to 10 years in a federal penitentiary. [7]
Now, the tuna manufacturers face a new challenge in the related civil actions. In 2015, on the heels of the DOJ investigation, three separate class actions were filed in the Southern District of California. Plaintiffs alleged that Defendants took part in various forms of anti-competitive conduct, including agreeing to fix certain net and list prices for packaged tuna. Plaintiffs alleged that the conspiracy began as early as November of 2010 and lasted until at least December 31, 2016.
On July 30, 2019, Judge Janis L. Sammartino granted the respective Motions for Class Certification filed by the Direct Purchaser Plaintiffs, as well as the two indirect classes–the Commercial Food Preparer Plaintiffs, and the End Payer Plaintiffs.[8] Judge Sammartino found that each class had satisfied Rule 23’s requirements and—contrary to the Defendants arguments—that common issues predominate over individualized issues within each class. For example, Plaintiffs contended that common evidence exists that would be used to prove the existence and scope of Defendants’ purported price fixing conspiracy.
The certification orders represent a major victory for each of the classes. They can now proceed to summary judgment and trial without any concern that their claims may be narrowed due to the mechanics of the proposed class. While dispositive motions are scheduled to be submitted later this month, no trial date is currently set. With certification rulings issued and merits briefing on the horizon, renewed settlement discussions are likely to come.
If you think there is safety in numbers when it comes to the privacy of your personal information, think again. A recent study in Nature Communications found that, given a large enough dataset, anonymised personal information is only an algorithm away from being re-identified.
Anonymised data refers to data that has been stripped of any identifiable information, such as a name or email address. Under many privacy laws, anonymising data allows organisations and public bodies to use and share information without infringing an individual’s privacy, or having to obtain necessary authorisations or consents to do so.
But what happens when that anonymised data is combined with other data sets?
Researchers behind the Nature Communications study found that using only 15 demographic attributes can re-identify 99.98% of Americans in any incomplete dataset. While fascinating for data analysts, individuals may be alarmed to hear that their anonymised data can be re-identified so easily and potentially then accessed or disclosed by others in a way they have not envisaged.
Re-identification techniques were recently used by the New York Times. In March this year, they pulled together various public data sources, including an anonymised dataset from the Internal Revenue Service, in order to reveal a decade’s worth of Donald Trump’s negatively adjusted income tax returns. His tax returns had been the subject of great public speculation.
What does this mean for business? Depending on the circumstances, it could mean that simply removing personal information such as names and email addresses is not enough to anonymise data and may be in breach of many privacy laws.
To address these risks, companies like Google, Uber and Apple use “differential privacy” techniques, which adds “noise” to datasets so that individuals cannot be re-identified, while still allowing access to the information outcomes they need.
It is a surprise for many businesses using data anonymisation as a quick and cost effective way to de-personalise data that more may be needed to protect individuals’ personal information.
Seyfarth Shaw was recently recognized for its commitment to diversity and inclusion by the California Minority Counsel Program (CMCP) receiving the Drucilla Stender Ramey Majority-Owned Law Firm Award. The CMCP is a state-wide non-profit dedicated to opening up the legal profession to attorneys from all backgrounds, by providing attorneys of color with opportunities for business development. Seyfarth Shaw has offices in Sacramento, San Francisco, Los Angeles and Century City. The firm has a recognized commitment to diversity, and was also recently named a “Best Law Firm for Women” for the ninth year in a row, and was shortlisted for the 2019 Chambers USA Diversity & Inclusion Awards. The firm is especially proud of its “Rooney Rule” initiative, where for every open associate position, at least one diverse candidate is considered and interviewed.
DirectWomen, dedicated to increasing the presence of women attorneys on corporate boards, will honor 2019 award recipients in October in New York City at the Sandra Day O’Connor Board Excellence Award Luncheon. These awards are given to recognize the efforts made by the recipients to increase corporate board diversity. The Sandra Day O’Connor Board Excellence Award honors women who have served on the board of a public company and have advanced the mission of diversity in the workplace. This year, Angela Braly, Co-founder of the Policy Circle and former Chair and CEO of WellPoint, now known as Anthem, among others, and Rose McKinney-James, Managing Principal of Energy Works LLC. PNC will be presented with the 2019 Board Diversity Award, which recognizes corporations that served as leaders in achieving board diversity by showing a commitment to diversity in the boardroom. Linda L. Addison, Immediate Past Managing Partner of Norton Rose Fulbright and Director, Torchmark Corporation will be recognized with the Distinguished Alumna Award, highlighting the accomplishments of an Alumnae who joined a large corporate board since completing the Institute. Finally, the Mary Ann Jorgenson Board Empowerment Award will be presented to DirectWomen Advisory Board Member Alan L. Beller, Senior Counsel, Cleary Gottlieb Steen & Hamilton LLP; Director, The Travelers Companies, Inc for his work preparing women attorneys to assume the responsibilities of board service.
The documents are sent via tracked sharing links that can be inserted into messages to clients. These links, when clicked, track the engagement with the content and launch an online document viewer and the file can be viewed securely, providing the information securely to the prospect. The sales team can see how long the prospect looked at the document, which pages were looked at the most, and whether or not the document was passed on, providing valuable feedback on what really matters to prospects. Ray Meiring, Qorus CEO, explains “This creates a powerful feedback loop that tells the team how interested a potential buyer is, and gives them insight into the prospect’s true propensity to buy – allowing them to adjust their approach accordingly.”
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