COVID-19 Warrants CCPA Enforcement Delay, Calif. AG Told

By Allison Grande
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Law360 (March 19, 2020, 10:23 PM EDT) -- Nearly three dozen business community members are stepping up pressure on California's attorney general to delay enforcement of the state's consumer privacy law, arguing that the novel coronavirus pandemic has further complicated companies' efforts to get up to speed with their still-evolving obligations. 

While the landmark California Consumer Privacy Act took effect Jan. 1, Attorney General Xavier Becerra isn't allow to start bringing enforcement actions until July 1. But in a letter sent to the regulator Tuesday, the California Chamber of Commerce, UPS, the Internet Coalition, the Association of National Advertisers and 30 others called for this looming deadline to be pushed back to Jan. 2, 2021.

The coalition — which spans a wide range of industries, including tech, telecom, advertising, retail, insurance, transportation and real estate — contend that the temporary forbearance from enforcement is necessary to give companies more time to not only implement still unfinished regulations being drafted by the attorney general but also to respond to the unique challenges raised by the global coronavirus outbreak.

"Now is not the time to threaten business leaders with premature CCPA enforcement lawsuits, particularly when the legal regime is not yet in its final form," the groups argued. "A temporary deferral in enforcement of the CCPA would relieve many pressures and stressors placed on organizations due to COVID-19 and would better enable business leaders to make responsible decisions that prioritize the needs and health of their workforce over other matters."

In response to the letter, an advisor to the attorney general told Law360 Friday that "right now, we're committed to enforcing the law upon finalizing the rules or July 1, whichever comes first."

"We're all mindful of the new reality created by COVID-19 and the heightened value of protecting consumers' privacy online that comes with it," the advisor added. "We encourage businesses to be particularly mindful of data security in this time of emergency."

According to the coalition's letter, the spread of the novel coronavirus — which causes the disease known as COVID-19 and has been declared a global pandemic by the World Health Organization — coupled with the quickly approaching enforcement date for the CCPA has placed business leaders in the "difficult position" of weighing what's best for their employees and the public good against decisions that may help their organizations "avoid costly and resource intensive enforcement actions."

Many of the companies represented in the coalition have instituted mandatory work-from-home measures to limit community spread, meaning that those responsible for creating processes to comply with the groundbreaking law's access and transparency requirements aren't present in the office to undertake these vital tasks, the coalition said.

"Developing innovative business procedures to comply with brand-new legal requirements is a formidable undertaking on its own, but it is an especially tall order when there are no dedicated, on-site staff available to build and test necessary new systems and processes," the organizations argued.

The letter also pointed to the still-evolving nature of the regulations that the attorney general is writing to guide companies in implementing the CCPA, which is the first law in the nation to give consumers the right to learn what data companies hold about them, request that the data be deleted and opt out of the sale of that information. 

The attorney general's office released the second round of revisions to the draft regulations last week and is soliciting more public feedback through March 27.

The latest revisions take steps such as clarifying for businesses how to respond to consumer data requests and what exactly companies must disclose to consumers. But the groups behind Tuesday's letter argue that the draft regulations won't be settled "for some time" and, as currently written, contain several provisions that go beyond the text of the law.

"While we understand that your office is working to finalize the draft rules as quickly as reasonably possible, precious time is slipping away from businesses in their efforts to develop consistent and workable compliance processes for consumers before enforcement may begin," the letter said.

Echoing a January letter seeking a similar delay in enforcement from the attorney general, the coalition added that businesses' compliance responsibilities "materially and substantially change" with each new update to the draft regulations, and with less than four months to go before the scheduled enforcement deadline, there's "very little time [left] for entities to understand what is required of them under the final regulatory scheme and to build those requirements into their business processes."

"Businesses should have a reasonable period of time to understand and implement the final regulations before being subject to enforcement," said the coalition, which also includes the Association of Magazine Media, Feld Entertainment, California Retailers Association, California Credit Union League, National Association of Mutual Insurance Companies and the Toy Association.

They added that while the CCPA requires that the attorney general refrain from bringing enforcement actions before July 1, the statute doesn't restrict the office from postponing the current "problematic" enforcement deadline.

"This short forbearance will allow businesses to absorb the shock to the system presented by the current health crisis and will give businesses the time they need to understand and effectively operationalize the rules, helping ensure consumers have consistent access to the rights afforded under the new law," the coalition argued.

--Additional reporting by Hailey Konnath. Editing by Emily Kokoll.

Update: This article has been updated to add comment from an advisor to California's attorney general.

For a reprint of this article, please contact reprints@law360.com.

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