California Adds Affirmative Defense to Medical Privacy Law

Michael Epshteyn writes:

A new law that amends the California Confidentiality of Medical Information Act (CMIA) may provide some relief to HIPAA covered entities and business associates, some of whom have faced class action lawsuits seeking millions in statutory damages under the CMIA for large-scale data breaches.  Because the CMIA—unlike HIPAA—creates a private right of action for individuals whose medical information has been breached, and because the CMIA provides for nominal damages of $1,000 even in the absence of actual damages to the individual whose information has been disclosed, the law increasingly has been the basis for class action lawsuits filed in California following medical data breaches.  For example, last year a class action lawsuit seeking $20 million in damages under the CMIA, based on a data breach involving 20,000 patients’ records, was filed against Stanford Hospital & Clinics in Palo Alto.

The new law (AB 439) amends the CMIA to create an affirmative defense against liability for nominal damages.  As discussed below, the affirmative defense is fairly narrow and applies only if, in addition to certain other requirements, the disclosure of information was by a HIPAA covered entity or business associate to another covered entity or business associate.

Read more on Chronicle of Data Protection.  Looking at the conditions, I agree with Michael that this new law will not apply to most data breaches.

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