BLT: May 2016

 

Articles

Business & Corporate

Financial Institution Liability for Rogue Mobile Apps

This article addresses the issue of whether financial institutions have any liability for damages suffered by their customers’ as a result of their customers’ use of rogue mobile apps. In doing so, the authors detail (i) the creation process of rogue apps, (ii) the risks that rogue apps pose to financial institutions and their customers, (iii) the efforts that financial institutions can take to shield themselves and their customers from the adverse effects caused by rogue apps, and (iv) the legal remedies and protection that consumers have with respect to rogue apps.

Business & Corporate

China’s Legislature Gears Up to Pass a Sweepingly Vague Cybersecurity Law

In July 2015, the Chinese government released a proposed draft cybersecurity law. The law imposes robust duties on entities while leaving those entities undefined in ways that could encompass many foreign businesses operating in China. For example, the law imposes specific network security practices on “network operators,” a term that could conceivably cover every business enterprises. Businesses should be aware that this law, when passed, may likely impose new duties upon them, but should look to the law’s regulations for more guidance when those regulations are issued.

Business & Corporate

The U.N. Disability Convention: Creating Opportunities for Participation

The author explores the history behind and practical effects of the United Nations Convention on the Rights of Persons with Disabilities (CPRD). The CRPD, the first legally binding instrument on the rights of persons with disabilities, situates disability rights squarely within the modern international human rights framework and marks its growing relevance for businesses around the world.

Business & Corporate

The February 2016 California Attorney General’s Data Breach Report Sets a Standard for “Reasonable Security” – What Does This Mean for Cybersecurity Litigation?

Businesses operating under numerous regulatory regimes must provide “reasonable” data security for customers’ personal information. What constitutes reasonable data security? The California attorney general’s office has contributed an authoritative voice on the subject, issuing the February 2016 California Data Breach Report. Johnston and Klein summarize the report and its recommended controls and discusses how the report may affect enforcement actions and litigation arising from data breaches.

Business & Corporate

The Right to be Forgotten in America: Have Search Engines Inadvertently Become Consumer Reporting Agencies?

The author analyzes recent developments under the European Union’s right to be forgotten, recognized in Google Spain SL v. Agencia Española de Protección de Datos through EU fundamental rights of privacy and U.S. consumer protection statutes such as the FCRA. Andrus invites further exploration of viewing these individual rights through both the lens of privacy and consumer protection. A subsequent article will analyze the potential effects on search engines and individuals if search engines are deemed to be global consumer reporting agencies.

Business & Corporate

“Who Am I Talking To?” – The Regulation of Voice Data Collected by Connected Consumer Products

Silvestro and Black address the privacy and security concerns arising from the use of voice-recognition technology in consumer goods, such as televisions, to capture and use voice data. The article examines the first state statute adopted to regulate the collection and use of voice data through televisions, California Assembly Bill 1116, which is used a backdrop also to discuss how other legislators or regulators may try to address the privacy and security concerns associated with the use of IoT devices to retain and voice data.

Business & Corporate

Developing Laws Address Flourishing Commercial Use of Biometric Information

Biometric identification systems are rapidly increasing in use, as advances in sensors, readers, and software make physical characteristics easily measurable. Biometrics are simply measurements of a person’s physical being. Fingerprints, retinal or iris scans, hand geometry, facial recognition, gait analysis, voiceprint reading, and even keystroke analysis are all simple biometric ways to identify a person. This article examines the laws that govern use of our biometric data and outlines the steps businesses should follow in their implementation of authentication technologies employing biometric data.

Business & Corporate

When Is a Business Risk an Insurance Risk?

One of the main disputes between the insurance industry and the IRS is what is considered an insurance risk. Turner explores the contours of insurance risk for tax purposes. The IRS takes the position that a business risk is not an insurance risk, which runs counter to concepts in the insurance industry and insurance coverage case law. The article points where the IRS position on insurance risk is not supported by the insurance industry, as well as sometimes being inconsistent with other IRS positions.

Business & Corporate

The “Fandation” of Risk: Does a Banking Client Get Its Money Back after Cyber Theft?

This article summarizes the law governing the circumstances when a commercial or institutional client might bear the risk of loss from a cyber theft of assets from its bank account. In sum, the law looks at facts and circumstances relating to key aspects of the bank’s operations and conduct, as well as whether the client rejected appropriate bank protocols in favor of others. Ultimately the bank will be liable if the client can prove it nothing to do with the hack, but it is unclear whether current technology is up to this task. The article outlines factors a client and its counsel may consider to improve the client’s likelihood of recovery from a hack of its bank account.

Business & Corporate

The Moroccan Souk and Your Commercial Contract Headaches: How Haggling for Trinkets Relates to Limitations of Liability, Insurance, and Indemnity Clauses

The three most contentious provisions in commercial contracts—limitations of liability, insurance, and indemnities—are wasting lawyers’ time and causing businesses to lose money. The first of a three-part series, this article analyzes the data on that waste, and offers practical solutions to help minimize it.

Departments

Business & Corporate

KEEPING CURRENT: SEC Imposes Penalties on Company and Officers for Inadequate Staffing in Accounting Department

On March 10, 2016, the SEC settled charges against Magnum Hunter Resources Corporation and two of its officers for deficient oversight of the company’s internal controls over financial reporting. This marks a continuation of a trend of imposing penalties on individuals for insufficient responsiveness to red flags and oversight of the company’s internal control procedures.

Business & Corporate

ETHICS CORNER: Addressing Conflicts of Interest Based on Economic Adversity

In December 2014, a three-judge panel of the Federal Circuit issued a short, non-precedential ruling disqualifying the Jones Day firm as counsel for the plaintiff in Celgard LLC v. LG Chem, Ltd. The Celgard decision generated a surge of commentary because the disqualification was based on the court’s view that, in representing plaintiff Celgard, Jones Day was “directly adverse” to Apple, a client of Jones Day that wasn’t a party to the case, but whose economic interests would be affected if Celgard prevailed.

Business & Corporate

MEMBER SPOTLIGHT: An Interview with Barkley Clark

Mention the name “Barkley Clark” and most lawyers think of the Uniform Commercial Code because of his long-standing, well-regarded legal treatises, which focus on the Uniform Commercial Code. Early on, Clark based his practice on the UCC, and from that sprang a 50-year career that has included not only writing about this important statute, but also practicing law in this area, teaching lawyers and future lawyers, serving as expert witness and on a bank board. But Clark’s interests go beyond the UCC. He spent 10 years on the Lawrence, Kansas, City Commission and served two terms as mayor of the city. He and his fellow commissioners helped to stop a big enclosed mall from being built in downtown Lawrence, so that its vibrant small businesses would flourish. Clark also spent several years on the Denver Urban Renewal Authority during the early efforts to develop lower downtown Denver.