{"id":37423,"date":"2025-02-13T09:02:59","date_gmt":"2025-02-13T15:02:59","guid":{"rendered":"https:\/\/update.legislature.ne.gov\/?p=37423"},"modified":"2025-02-13T09:11:12","modified_gmt":"2025-02-13T15:11:12","slug":"class-action-data-breach-bill-clears-first-round","status":"publish","type":"post","link":"https:\/\/update.legislature.ne.gov\/?p=37423","title":{"rendered":"Class action data breach bill clears first-round"},"content":{"rendered":"

Lawmakers advanced a bill from general file Feb. 12 that would prevent a private entity from being liable in a class action resulting from a cybersecurity event in certain circumstances.<\/p>\n

\"Sen.
Sen. Bob Hallstrom<\/figcaption><\/figure>\n

Under LB241, introduced by Syracuse Sen. Bob Hallstrom, private entities that experience a data breach would not be liable in a class action unless the cybersecurity event was caused by the entity\u2019s \u201cwillful, wanton or gross negligence.\u201d<\/p>\n

The bill defines a cybersecurity event as one that leads to unauthorized access to, disruption or misuse of nonpublic information, such as Social Security or driver’s license numbers or financial account information, security codes or passwords.<\/p>\n

Qualifying private entities under the bill would include corporations, religious or charitable organizations, associations, businesses and nonprofits.<\/p>\n

Hallstrom said the bill is meant to address a recent \u201csurge\u201d in class action lawsuits related to data breaches. Such suits have the potential to clog up the courts, he said, and often focus on potential losses, such as identity theft, rather than any actual monetary loss.<\/p>\n

The results, he said, are higher cybersecurity premiums for businesses with little or no payout to those whose data is compromised. Despite a company\u2019s best efforts, Hallstrom said, data breaches happen and companies should not have to face class action lawsuits if they are accused only of negligence and not \u201cwillful\u201d negligence.<\/p>\n

\u201cEven with the existence of reasonable precautions \u2014 patches, updates [and] things that are taken care of by businesses on a regular and routine basis \u2014 they still face hackers and ransomwares,\u201d Hallstrom said. \u201cThe bad actors are always a step ahead of them.\u201d<\/p>\n

Elmwood Sen. Robert Clements supported the bill. The bank he heads has a \u201cmilitary-grade\u201d firewall, he said, but still has difficulty obtaining cyber security insurance.<\/p>\n

\u201cEven though we\u2019re really trying hard, if we did have a breach, I think we could probably face a lawsuit in the millions of dollars and it could shut down my business,\u201d Clements said.<\/p>\n

Sen. Megan Hunt of Omaha opposed the bill. She said state and local level consumer protections are more important than ever now that the Trump administration has begun \u201cdismantling\u201d such protections at the national level.<\/p>\n

Expressing concern that LB241 would limit access to legal redress, Lincoln Sen. George Dungan also opposed the measure. He said the difference between regular negligence and willful negligence is \u201chuge\u201d in a legal context and that the latter would be very difficult to prove against an entity involved in a data breach.<\/p>\n

Also speaking against the proposal was Lincoln Sen. Danielle Conrad, who called it a \u201csweetheart deal\u201d for a wide range of entities that would \u201cfavor big business over hardworking Nebraskans.\u201d<\/p>\n

Conrad also questioned the premise that reducing class action lawsuits, which can bundle hundreds or thousands of complaints into one case, would free up the state\u2019s courts to tackle other issues, or that the bill would have a positive impact on cybersecurity premiums for businesses.<\/p>\n

\u201cLB241 provides a license to corporations large and small to act unreasonably \u2014 to act negligently \u2014 and to thus evade accountability through class action in state court,\u201d Conrad said.<\/p>\n

After rejecting a Conrad amendment on a 14-30 vote, lawmakers advance LB241 to the second round of debate 33-9.<\/p>\n","protected":false},"excerpt":{"rendered":"

Lawmakers advanced a bill from general file Feb. 13 that would prevent a private entity from being liable in a class action resulting from a cybersecurity event in certain circumstances.<\/p>\n","protected":false},"author":1,"featured_media":37365,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[6],"tags":[298],"class_list":["post-37423","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-commerce-and-insurance","tag-sen-bob-hallstrom"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/update.legislature.ne.gov\/wp-content\/uploads\/2025\/02\/LB241Hallstrom2-11-25a.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/37423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=37423"}],"version-history":[{"count":4,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/37423\/revisions"}],"predecessor-version":[{"id":37427,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/posts\/37423\/revisions\/37427"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=\/wp\/v2\/media\/37365"}],"wp:attachment":[{"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/update.legislature.ne.gov\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}