Assemblyman Andrew Zwicker (D-Middlesex) had introduced Assembly Bill 3625 which requires businesses and governments to safeguard individuals’ biometric information.
NJCJI appreciates Assemblyman Zwicker’s concern for protecting individuals’ biometric information and takes no position on that policy, generally. However, NJCJI opposes the enforcement mechanism in Section 5. Specifically, Section 5 creates a private right of action for any violation of Section 4 by a private entity and allows affected individuals to pursue liquidated damages. The private right of action and liquidated damages provisions will create a financial incentive for class action lawsuits against private entities for technical violations, despite the private entity’s good faith and the lack of any real harm to the public.
For instance, purely inadvertent violations of a private entity’s own retention schedule, or an accidental disclosure of biometric information to a reputable vendor that is promptly remediated, could still serve as a basis for class action liability under the bill as currently drafted. If a class of 5,000 customers each sought the minimum $1,000 in liquidated damages for the inadvertent release of biometric information to a vendor or failure to destroy it pursuant to a retention schedule, it could lead to a potential $5,000,000 award under Section 5. For affected small- and medium-sized businesses, such an award could easily lead to insolvency.
NJCJI has requested that Section 5 of the bill be amended so the exclusive civil enforcement authority is vested in the Attorney General’s Office. The Attorney General can exercise sound discretion over enforcement of Section 4 to ensure that only violations that present actual harm to the public are addressed and pursue penalties without any personal financial incentive.
In the alternative, NJCJI has requested that the liquidated damages provisions in Section 5 be removed, and also, that aggrieved persons be expressly required to prove an ascertainable loss as a condition of pursuing damages under Section 5.
The legislation was scheduled to be heard in the Assembly Science and Technology Committee, of which Assemblyman Zwicker is the Chair, on Monday December 7, 2020. Unfortunately the Assemblyman’s mother passed away and the hearing was postponed. NCJI has extended our sympathies to Assemblyman Zwicker and his family. NJCJI will follow-up our discussion with the Assemblyman regarding our concerns. The hearing on Assembly Bill 3625 has not yet been rescheduled.
Should you wish to discuss this matter in further detail please contact Eric DeGesero, EDGE Consulting, 973-464-9504 or firstname.lastname@example.org.