The BLT: The Blog of Legal Times

After Target Breach, Senate Introduces Data Security Act

Sens. Tom Carper (D-Del.) and Roy Blunt (R-Mo.) are taking aim at retailers with new legislation intended to improve safeguards for consumer information, following recent revelations about data breaches at Target Corp. and Neiman Marcus Group Ltd.

The Data Security Act [PDF], which the bipartisan duo introduced Wednesday, would require companies that accept credit or debit card payments to have policies and procedures in place to protect consumer data from hackers and act on breaches when they occur. Under the bill, businesses would have to investigate breaches and work to secure the data targeted by hackers.

Companies also would have to tell their customers and federal authorities about any breaches. And if a breach involves at least 5,000 customers, businesses must notify credit-reporting agencies, too.

FCC Locks In Head Cybersecurity Counsel

The Federal Communications Commission has secured senior Senate Intelligence Committee staffer Clete Johnson as its lead cybersecurity lawyer, FCC Chairman Tom Wheeler announced Friday.

Johnson, who was the panel's top staffer on financial intelligence matters and the cybersecurity point-person for Sen. Jay Rockefeller IV (D-W.Va.), will work on addressing communications-sector weaknesses and improving the industry's security as the FCC's chief counsel for cybersecurity. He will serve in the agency's Public Safety and Homeland Security Bureau.

"Clete Johnson's policy expertise and skills working with stakeholders in the public and private sectors will be a tremendous asset as the Commission continues its efforts to promote network reliability and address future security threats through multistakeholder processes," Wheeler said in a written statement.

The Morning Wrap

Stronger Economy: Federal Reserve Chairman Ben Bernanke on Friday painted a sunny picture for the U.S. economy in 2014, saying that numerous obstacles to growth in the past year seem to be subsiding, The Associated Press reports.

Federal Circuit: The U.S. Court of Appeals for the Federal Circuit is bracing for a flood of appeals in 2014, The Recorder reports.

BlackBerry Suit: BlackBerry Ltd. has sued Ryan Seacrest's Typo Products LLC, claiming the "American Idol" host's company copied designs for a keyboard case, Bloomberg reports.

Senators Call for Hearing over Target Data Breach

Following the revelation this month about Target Corp.'s data breach, Democratic Sens. Mark Warner of Virginia and Robert Menendez of New Jersey plan to put companies' fraud and identity theft-prevention practices under the microscope.

Warner and Menendez on Monday urged the Senate Banking Committee to hold a hearing on whether businesses are doing enough to protect consumer data and if stronger cybersecurity standards are needed. The senators wrote in a letter to panel Chairman Tim Johnson (D-S.D.) that "consumers’ interests must come first."

"With our economy and financial sector becoming increasingly information-based and data-reliant, consumers depend on the companies and financial service providers with whom they do business to protect their sensitive information," the senators wrote. "As companies collect, store, and process ever-greater quantities of consumer data, they—and our regulators—must become even more vigilant against breaches and improper use."

Court Reverses Sanctions Against Tax Office for Faulty Computer System

The District of Columbia Office of Tax and Revenue's computer system was like something out of "The Terminator," Senior Judge Frank Schwelb of the D.C. Court of Appeals wrote: a machine "defying the will of those who programmed it."

For John and Sara Shuman, the faulty computer system meant years of fighting erroneous notices from the tax office, long after city officials admitted the couple was right. Schwelb had bad news for the Shumans, though—the administrative law judge who ordered the tax office to fix its computer system and imposed sanctions lacked authority to do so.

A three-judge panel today said only a D.C. Superior Court judge could have offered the type of relief the couple sought. In the same breath, though, the court said its opinion should not be read to suggest the tax office's handling of the Shuman's case was "justifiable."

Roles at Brookings and MIT for Ex-Commerce Dept. GC

Cameron Kerry has taken visiting scholar jobs at the Brookings Institution and the Massachusetts Institute of Technology after stepping down as the U.S. Commerce Department's general counsel in September, the two institutions announced Tuesday.

Kerry, who became the Commerce Department's GC in 2009 and spent about a month as the agency's acting secretary this year, has joined Brookings in Washington, D.C., as the Ann R. and Andrew H. Tisch Distinguished Visiting Fellow in Governance Studies. At MIT in Cambridge, Mass., Kerry is a visiting scholar at the university's Media Lab, a research center focused on cutting-edge technological developments.

The former Commerce GC said in written statements released by Brookings and MIT that he is looking forward to working with the researchers at the institutions.

Verizon Wants Claims in NSA Surveillance Suit Dismissed

Shortly after a federal judge in Washington ruled that a National Security Agency phone surveillance program is "almost certainly" unconstitutional, Verizon Communications Inc. moved to dismiss claims against the company in the case.

The challengers sued to hold Verizon liable for allegedly complying with government requests for American citizens' phone records. Verizon said that if it was obeying court orders to provide that information-a claim the company didn't admit-that would make the telecommunications company immune from liability for any alleged privacy violations.

"Companies are required to comply with court orders and cannot be sued for allegedly doing so," Verizon's attorney, Randolph Moss of Wilmer Cutler Pickering Hale and Dorr, argued in the brief.

The Morning Wrap

Improving Healthcare.gov: Obama administration officials said Sunday they met their Saturday deadline to make improvements to the troubled Healthcare.gov, The Washington Post reports.

Train Derailment: A commuter train derailment in New York on Sunday killed four individuals and injured dozens, The New York Times reports. The cause of the accident is still unknown.

Holiday Shopping: With several U.S. chains open on Thanksgiving and major discounts, U.S. stores saw a slight increase in foot traffic during the holiday and Black Friday, The Wall Street Journal reports.

Former AG Mukasey Defends NSA Surveillance Tactics

Former U.S. Attorney General Michael Mukasey on Friday pushed back at criticism of the National Security Agency's surveillance operations, saying he trusts that the NSA is lawfully gathering information.

Mukasey, who led the U.S. Department of Justice under President George W. Bush from 2007 to 2009, said he believes the probability is low that the NSA would do anything but work to protect the United States from terrorism, when the agency knows that Americans would hold the agency accountable for a terrorist attack.

"What would be the point of gathering information for recreational use or gathering information for any other use than protecting the country when the thing that [Americans] most fear is an attack on the United States?" he asked at the Federalist Society's National Lawyers Convention, an annual Washington, D.C., gathering of conservative attorneys.

US Commerce Secretary Sets Digital Agenda

U.S. Commerce Secretary Penny Pritzker on Thursday extended an olive branch to the U.S. business community, pledging her agency's support to companies as they grapple with cybersecurity, intellectual property and other issues online.

In announcing her agenda as Commerce secretary, Pritzker, who took the helm of the department in June, said the agency will give businesses a "strong voice at the table" as it works to strengthen the digital economy. Pritzker vowed to protect IP online, ensure strong cybersecurity for U.S. infrastructure, and support a free and open Internet.

"In the months ahead, the Commerce Department will develop a coordinated approach to these and other Internet policies that affect business," Pritzker said at business incubator 1776 in Washington, D.C. "That is our commitment."