CA Legislative Compromise to Sweeping Data Privacy Ballot Initiative Takes Major Step Forward

Client Alert

Joint News Alert From Manatt's Government and Regulatory and Privacy and Data Security Practices

On June 21, 2018, California legislators held a briefing to announce that a legislative alternative to a sweeping ballot initiative to revamp the privacy and data security requirements of California businesses was agreed among State Senator Robert Hertzberg (D–Los Angeles), Assembly Member Ed Chau (D–Arcadia) and the proponent of the ballot initiative, Alastair Mactaggart. Democrat Governor Brown and the Democratic-controlled legislative leadership, consisting of Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon, reportedly agreed to expedite consideration of the measure within one week. This timeline is critical because the compromise bill must be public for 72 hours before it can be acted on by the Legislature, and Mr. Mactaggart only controls removal of his initiative from the ballot until the date it is certified by the Secretary of State for ballot qualification, which is Thursday, June 28, 2018. Even with the procedural assurances, it is not yet certain the compromise bill will pass the Legislature and be signed into law by Governor Brown.

The announcement comes just as corporate interests and industry groups were organizing to oppose privacy activist Mactaggart’s proposed ballot initiative, known as the California Consumer Privacy Act of 2018, which would make sweeping changes to California’s already far-reaching consumer privacy protection laws. The proposed initiative resembles in certain respects the European Union’s recently implemented General Data Protection Regulation (GDPR). The proposed alternative legislation, which would become effective on January 1, 2020, retains many of the features of the ballot initiative, such as codifying consumer rights to access and deletion, and also creates a private right of action for data breaches, with certain other provisions either tempered (such as statutory penalties) or completely omitted (such as data minimization). Under the compromise, Mr. Mactaggart would agree to immediately withdraw his initiative if the proposed new state law is signed by Governor Brown before the ballot measure is certified for inclusion on the November ballot. The compromise is proposed in Assembly Bill 375, amended overnight to include the proposed compromise. Further technical amendments are expected to the bill, but it is unclear if any significant policy changes can or will be made before the bill is voted on, given the 72-hour rule.

To read Assembly Bill 375, click here.

Look for further and more in-depth insights from Manatt on this legislative activity and similar issues in the near future.