Federal Preemption: An Essential Component of an Effective National Data-Security and Privacy Regime

Washington Legal Foundation's Legal Backgrounder

Stuart M. Gerson, Member of the Firm in the Litigation and Health Care & Life Sciences practices, in the firm’s Washington, DC, and New York offices, authored an article in the Washington Legal Foundation's Legal Backgrounder titled “Federal Preemption: An Essential Component of an Effective National Data-Security and Privacy Regime.”

Following is an excerpt:

Significant data breaches at every level of national life have pushed the privacy and security of personally-identifiable information (PII) to the forefront of state and federal policymakers’ agendas. In the interests of efficiency and effectiveness, the American business community has argued for several years for a uniform national breach-notification statute that is preemptive of state law. While there have been several congressional initiatives along this line, none have produced a politically viable solution. However, legislative interest has intensified of late for a federal law that encompasses data-breach notification and other aspects of privacy and security. Large and small businesses support a national, preemptive standard due in part to the risks of contradictory and discriminatorily enforced state rules that undergo constant changes and arbitrary administrative implementation.

Despite American businesses’ commitment to security compliance and training efforts, cybercrime and the losses it engenders continue to grow substantially. Moreover, the cyber landscape itself has changed, magnifying the effects of data-breach incidents at both the personal and national-security levels. Both domestic and foreign criminal activity, often sponsored or even conducted directly by, hostile nation states, has run rampant. Individuals, businesses, and government are caught up in a global cyber conflict that cannot be won with the current legal framework of fragmented and contradictory laws, inefficient and often pointless private litigation, inconsistent federal oversight and enforcement, and insufficient public-private trust. We can do better.

Federal preemption and a greater level of privacy and security for personal and enterprise data are not mutually exclusive. Indeed, this paper’s fundamental thesis is that enhancing security and coordination of effort and enforcement at the national level will help preserve individuals’ and businesses’ privacy.