September 5, 2012
Companies with customers in California are facing an increasing number of class action suits seeking significant sums in statutory damages, attorney’s fees and costs under California’s "Shine the Light" law, a part of California’s Consumer Records Act. The law, enacted January 1, 2005, was designed to protect California consumers’ private information by requiring businesses to disclose certain types of customer information they have shared with third-party companies and the identities of those third-party companies. Many businesses have failed to comply with the requirements set forth in the statute, sharing consumers’ personal information to third parties without making the requisite disclosure. This behavior has been understandable, and even economically practical, as very few consumers have instituted a civil action to recover damages under the Shine the Light statute. This may be due, in part, to the fact that many consumers are unaware that companies regularly sell customer personal information to third-party businesses.
Gibson Dunn partner J. Keith Biancamano is the co-author, with Michael R. Geroe, Senior Vice President, General Counsel and Assistant Secretary of Adknowledge, Inc., of "Shining the Light on California’s ‘Shine the Light’ Law," published in ACC Docket, September 2012. This article is a primer for legal counsel advising businesses in California that sell, market or communicate with customers over the Internet.
Reprinted with permission from ACC Docket, September 2012, the Association of Corporate Counsel, © 2012. All Rights Reserved. www.acc.com.