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California Creates New Affirmative Data Security Duty

October 27, 2004

By Michael K. Lindsey and John R. Sabatini

Late last month, California Governor Arnold Schwarzenegger signed into law Assembly Bill 1950, which requires certain businesses to implement and maintain “reasonable” security measures to protect personal data about California residents. The law also requires affected businesses to enter into agreements with any business partners who have access to such information, requiring that those businesses adopt reasonable security measures. The Act will be added to the California Civil Code as section 1798.81.5 and provides for remedies that include injunctive relief and recovery of actual damages.