BILL NUMBER: SB 27 CHAPTERED
BILL TEXT
CHAPTER 505
FILED WITH SECRETARY OF STATE SEPTEMBER 25, 2003
APPROVED BY GOVERNOR SEPTEMBER 24, 2003
PASSED THE SENATE SEPTEMBER 12, 2003
PASSED THE ASSEMBLY SEPTEMBER 8, 2003
AMENDED IN ASSEMBLY SEPTEMBER 5, 2003
AMENDED IN ASSEMBLY AUGUST 19, 2003
AMENDED IN ASSEMBLY JULY 2, 2003
AMENDED IN ASSEMBLY JUNE 27, 2003
AMENDED IN SENATE APRIL 30, 2003
AMENDED IN SENATE APRIL 2, 2003
AMENDED IN SENATE JANUARY 9, 2003
INTRODUCED BY Senator Figueroa
(Coauthors: Senators Alpert, Kuehl, Romero, and Soto)
(Coauthors: Assembly Members Calderon, Correa, Hancock, Lieber,
Longville, Lowenthal, Montanez, Pavley, Vargas, and Wiggins)
DECEMBER 2, 2002
An act to amend Section 1798.84 of, and to repeal and add Section
1798.83 to, the Civil Code, relating to personal information.
LEGISLATIVE COUNSEL'S DIGEST
SB 27, Figueroa. Personal information: disclosure to direct
marketers.
Existing law requires a business to ensure the privacy of a
customer's personal information, as defined, contained in records by
destroying, or arranging for the destruction of, the records, as
specified. Any customer injured by a business' violation of these
provisions is entitled to recover damages, obtain injunctive relief,
or seek other remedies.
This bill would, operative January 1, 2005, and subject to
specified exceptions, require a business that discloses a customer's
personal information, including information relating to income or
purchases, to a 3rd party for direct marketing purposes to provide
the customer, within 30 days after the customer's request, as
specified, in writing or by e-mail the names and addresses of the
recipients of that information and specified details regarding the
information disclosed, except as specified. The bill would also
require businesses required to comply with the bill to provide
information to customers regarding its privacy policy and the
designated means of making an inquiry regarding that policy.
In addition to the legal remedies provided under current law, a
customer would be entitled to recover a civil penalty, up to $3,000,
and attorney's fees and costs for a violation of these provisions as
they read both before and after January 1, 2005.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) For free market forces to have a role in shaping
the privacy practices of California businesses and for "opt-in" and
"opt-out" remedies to be effective, Californians must be more than
vaguely informed that a business might share personal information
with third parties. Consumers must, for these reasons and pursuant
to Section 1 of Article 1 of the California Constitution, be better
informed about what kinds of personal information are purchased by
businesses for direct marketing purposes. With these specifics,
consumers can knowledgeably choose to opt-in or opt-out or choose
among businesses that disclose information to third parties for
direct marketing purposes on the basis of how protective the business
is of consumers' privacy.
(b) Nothing in this act is intended to impose, and this act may
not be construed to impose, any prohibition or requirement upon,
restraint of, or prerequisite to, a business disclosing or exchanging
personal information to third parties, including affiliated parties,
for any lawful purpose, including direct marketing purposes. This
act, generally, and Section 1798.83 of the Civil Code, specifically,
provides merely for descriptions of general business practices
regarding direct marketing to be disclosed to customers after those
practices have occurred and, for example, does not require that
personal information associated with specific individuals be
disclosed.
SEC. 2. Section 1798.83 of the Civil Code is repealed.
SEC. 3. Section 1798.83 is added to the Civil Code, to read:
1798.83. (a) Except as otherwise provided in subdivision (d), if
a business has an established business relationship with a customer
and has within the immediately preceding calendar year disclosed
personal information that corresponds to any of the categories of
personal information set forth in paragraph (6) of subdivision (e) to
third parties, and if the business knows or reasonably should know
that the third parties used the personal information for the third
parties' direct marketing purposes, that business shall, after the
receipt of a written or electronic mail request, or, if the business
chooses to receive requests by toll-free telephone or facsimile
numbers, a telephone or facsimile request from the customer, provide
all of the following information to the customer free of charge:
(1) In writing or by electronic mail, a list of the categories set
forth in paragraph (6) of subdivision (e) that correspond to the
personal information disclosed by the business to third parties for
the third parties' direct marketing purposes during the immediately
preceding calendar year.
(2) In writing or by electronic mail, the names and addresses of
all of the third parties that received personal information from the
business for the third parties' direct marketing purposes during the
preceding calendar year and, if the nature of the third parties'
business cannot reasonably be determined from the third parties'
name, examples of the products or services marketed, if known to the
business, sufficient to give the customer a reasonable indication of
the nature of the third parties' business.
(b) (1) A business required to comply with this section shall
designate a mailing address, electronic mail address, or, if the
business chooses to receive requests by telephone or facsimile, a
toll-free telephone or facsimile number, to which customers may
deliver requests pursuant to subdivision (a). A business required to
comply with this section shall, at its election, do at least one of
the following:
(A) Notify all agents and managers who directly supervise
employees who regularly have contact with customers of the designated
addresses or numbers or the means to obtain those addresses or
numbers and instruct those employees that customers who inquire about
the business' privacy practices or the business' compliance with
this section shall be informed of the designated addresses or numbers
or the means to obtain the addresses or numbers.
(B) Add to the home page of its Web site, a link either to a page
titled "Your Privacy Rights" or to add the words "Your Privacy
Rights," to the home page's link to the business' privacy policy. If
the business elects to add the words "Your Privacy Rights" to the
link to the business' privacy policy, the words "Your Privacy Rights"
shall be in the same style and size of the link to the business'
privacy policy. If the business does not display a link to its
privacy policy on the home page of its Web site, or does not have a
privacy policy, the words "Your Privacy Rights" shall be written in
larger type than the surrounding text, or in contrasting type, font,
or color to the surrounding text of the same size, or set off from
the surrounding text of the same size by symbols or other marks that
call attention to the language. The first page of the link shall
describe a customer's rights pursuant to this section and shall
provide the designated mailing address, e-mail address, as required,
or toll-free telephone number or facsimile number, as appropriate.
If the business elects to add the words "Your California Privacy
Rights" to the home page's link to the business's privacy policy in a
manner that complies with this subdivision, and the first page of
the link describes a customer's rights pursuant to this section, and
provides the designated mailing address, electronic mailing address,
as required, or toll-free telephone or facsimile number, as
appropriate, the business need not respond to requests that are not
received at one of the designated addresses or numbers.
(C) Make the designated addresses or numbers, or means to obtain
the designated addresses or numbers, readily available upon request
of a customer at every place of business in California where the
business or its agents regularly have contact with customers.
The response to a request pursuant to this section received at one
of the designated addresses or numbers shall be provided within 30
days. Requests received by the business at other than one of the
designated addresses or numbers shall be provided within a reasonable
period, in light of the circumstances related to how the request was
received, but not to exceed 150 days from the date received.
(2) A business that is required to comply with this section and
Section 6803 of Title 15 of the United States Code may comply with
this section by providing the customer the disclosure required by
Section 6803 of Title 15 of the United States Code, but only if the
disclosure also complies with this section.
(3) A business that is required to comply with this section is not
obligated to provide information associated with specific
individuals and may provide the information required by this section
in standardized format.
(c) (1) A business that is required to comply with this section is
not obligated to do so in response to a request from a customer more
than once during the course of any calendar year. A business with
fewer than 20 full-time or part-time employees is exempt from the
requirements of this section.
(2) If a business that is required to comply with this section
adopts and discloses to the public, in its privacy policy, a policy
of not disclosing personal information of customers to third parties
for the third parties' direct marketing purposes unless the customer
first affirmatively agrees to that disclosure, or of not disclosing
the personal information of customers to third parties for the third
parties' direct marketing purposes if the customer has exercised an
option that prevents that information from being disclosed to third
parties for those purposes, as long as the business maintains and
discloses the policies, the business may comply with subdivision (a)
by notifying the customer of his or her right to prevent disclosure
of personal information, and providing the customer with a cost free
means to exercise that right.
(d) The following are among the disclosures not deemed to be
disclosures of personal information by a business for a third parties'
direct marketing purposes for purposes of this section:
(1) Disclosures between a business and a third party pursuant to
contracts or arrangements pertaining to any of the following:
(A) The processing, storage, management, or organization of
personal information, or the performance of services on behalf of the
business during which personal information is disclosed, if the
third party that processes, stores, manages, or organizes the
personal information does not use the information for a third party's
direct marketing purposes and does not disclose the information to
additional third parties for their direct marketing purposes.
(B) Marketing products or services to customers with whom the
business has an established business relationship where, as a part of
the marketing, the business does not disclose personal information
to third parties for the third parties' direct marketing purposes.
(C) Maintaining or servicing accounts, including credit accounts
and disclosures pertaining to the denial of applications for credit
or the status of applications for credit and processing bills or
insurance claims for payment.
(D) Public record information relating to the right, title, or
interest in real property or information relating to property
characteristics, as defined in Section 408.3 of the Revenue and
Taxation Code, obtained from a governmental agency or entity or from
a multiple listing service, as defined in Section 1087, and not
provided directly by the customer to a business in the course of an
established business relationship.
(E) Jointly offering a product or service pursuant to a written
agreement with the third party that receives the personal
information, provided that all of the following requirements are met:
(i) The product or service offered is a product or service of, and
is provided by, at least one of the businesses that is a party to
the written agreement.
(ii) The product or service is jointly offered, endorsed, or
sponsored by, and clearly and conspicuously identifies for the
customer, the businesses that disclose and receive the disclosed
personal information.
(iii) The written agreement provides that the third party that
receives the personal information is required to maintain the
confidentiality of the information and is prohibited from disclosing
or using the information other than to carry out the joint offering
or servicing of a product or service that is the subject of the
written agreement.
(2) Disclosures to or from a consumer reporting agency of a
customer's payment history or other information pertaining to
transactions or experiences between the business and a customer if
that information is to be reported in, or used to generate, a
consumer report as defined in subdivision (d) of Section 1681a of
Title 15 of the United States Code, and use of that information is
limited by the federal Fair Credit Reporting Act.
(3) Disclosures of personal information by a business to a third
party financial institution solely for the purpose of the business
obtaining payment for a transaction in which the customer paid the
business for goods or services with a check, credit card, charge
card, or debit card, if the customer seeks the information required
by subdivision (a) from the business obtaining payment, whether or
not the business obtaining payment knows or reasonably should know
that the third party financial institution has used the personal
information for its direct marketing purposes.
(4) Disclosures of personal information between a licensed agent
and its principal, if the personal information disclosed is necessary
to complete, effectuate, administer, or enforce transactions between
the principal and the agent, whether or not the licensed agent or
principal also uses the personal information for direct marketing
purposes, if that personal information is used by each of them solely
to market products and services directly to customers with whom both
have established business relationships as a result of the principal
and agent relationship.
(5) Disclosures of personal information between a financial
institution and a business that has a private label credit card,
affinity card, retail installment contract, or co-branded card
program with the financial institution, if the personal information
disclosed is necessary for the financial institution to maintain or
service accounts on behalf of the business with which it has a
private label credit card, affinity card, retail installment
contract, or branded card program, or to complete, effectuate,
administer, or enforce customer transactions or transactions between
the institution and the business, whether or not the institution or
the business also uses the personal information for direct marketing
purposes, if that personal information is used solely to market
products and services directly to customers with whom both the
business and the financial institution have established business
relationships as a result of the private label credit card, affinity
card, retail installment contract, or co-branded card program.
(e) For purposes of this section:
(1) "Customer" means an individual who is a resident of California
who provides personal information to a business during the creation
of, or throughout the duration of, an established business
relationship if the business relationship is primarily for personal,
family, or household purposes.
(2) "Direct marketing purposes" means the use of personal
information to solicit or induce a purchase, rental, lease, or
exchange of products, goods, property, or services directly to
individuals by means of the mail, telephone, or electronic mail for
their personal, family, or household purposes. The sale, rental,
exchange, or lease of personal information for consideration to
businesses is a direct marketing purpose of the business that sells,
rents, exchanges or obtains consideration for the personal
information. "Direct marketing purposes" does not include the use of
personal information (A) by bona fide tax exempt charitable or
religious organizations to solicit charitable contributions, (B) to
raise funds from and communicate with individuals regarding politics
and government, (C) by a third party when the third party receives
personal information solely as a consequence of having obtained for
consideration permanent ownership of accounts that might contain
personal information, or (D) by a third party when the third party
receives personal information solely as a consequence of a single
transaction where, as a part of the transaction, personal information
had to be disclosed in order to effectuate the transaction.
(3) "Disclose" means to disclose, release, transfer, disseminate,
or otherwise communicate orally, in writing, or by electronic or any
other means to any third party.
(4) "Employees who regularly have contact with customers" means
employees whose contact with customers is not incidental to their
primary employment duties, and whose duties do not predominantly
involve ensuring the safety or health of the businesses customers.
It includes, but is not limited to, employees whose primary
employment duties are as cashier, clerk, customer service, sales, or
promotion. It does not, by way of example, include employees whose
primary employment duties consist of food or beverage preparation or
service, maintenance and repair of the business' facilities or
equipment, direct involvement in the operation of a motor vehicle,
aircraft, watercraft, amusement ride, heavy machinery or similar
equipment, security, or participation in a theatrical, literary,
musical, artistic, or athletic performance or contest.
(5) "Established business relationship" means a relationship
formed by a voluntary, two-way communication between a business and a
customer, with or without an exchange of consideration, for the
purpose of purchasing, renting, or leasing real or personal property,
or any interest therein, or obtaining a product or service from the
business, if the relationship is ongoing and has not been expressly
terminated by the business or the customer, or if the relationship is
not ongoing, but is solely established by the purchase, rental, or
lease of real or personal property from a business, or the purchase
of a product or service, no more than 18 months have elapsed from the
date of the purchase, rental, or lease.
(6) (A) The categories of personal information required to be
disclosed pursuant to paragraph (1) of subdivision (a) are all of the
following:
(i) Name and address.
(ii) Electronic mail address.
(iii) Age or date of birth.
(iv) Names of children.
(v) Electronic mail or other addresses of children.
(vi) Number of children.
(vii) The age or gender of children.
(viii) Height.
(ix) Weight.
(x) Race.
(xi) Religion.
(xii) Occupation.
(xiii) Telephone number.
(xiv) Education.
(xv) Political party affiliation.
(xvi) Medical condition.
(xvii) Drugs, therapies, or medical products or equipment used.
(xviii) The kind of product the customer purchased, leased, or
rented.
(xix) Real property purchased, leased, or rented.
(xx) The kind of service provided.
(xxi) Social security number.
(xxii) Bank account number.
(xxiii) Credit card number.
(xxiv) Debit card number.
(xxv) Bank or investment account, debit card, or credit card
balance.
(xxvi) Payment history.
(xxvii) Information pertaining to the customer's creditworthiness,
assets, income, or liabilities.
(B) If a list, description, or grouping of customer names or
addresses is derived using any of these categories, and is disclosed
to a third party for direct marketing purposes in a manner that
permits the third party to identify, determine, or extrapolate any
other personal information from which the list was derived, and that
personal information when it was disclosed identified, described, or
was associated with an individual, the categories set forth in this
subdivision that correspond to the personal information used to
derive the list, description, or grouping shall be considered
personal information for purposes of this section.
(7) "Personal information" as used in this section means any
information that when it was disclosed identified, described, or was
able to be associated with an individual and includes all of the
following:
(A) An individual's name and address.
(B) Electronic mail address.
(C) Age or date of birth.
(D) Names of children.
(E) Electronic mail or other addresses of children.
(F) Number of children.
(G) The age or gender of children.
(H) Height.
(I) Weight.
(J) Race.
(K) Religion.
(L) Occupation.
(M) Telephone number.
(N) Education.
(O) Political party affiliation.
(P) Medical condition.
(Q) Drugs, therapies, or medical products or equipment used.
(R) The kind of product the customer purchased, leased, or rented.
(S) Real property purchased, leased, or rented.
(T) The kind of service provided.
(U) Social security number.
(V) Bank account number.
(W) Credit card number.
(X) Debit card number.
(Y) Bank or investment account, debit card, or credit card
balance.
(Z) Payment history.
(AA) Information pertaining to creditworthiness, assets, income,
or liabilities.
(8) "Third party" or "third parties" means one or more of the
following:
(A) A business that is a separate legal entity from the business
that has an established business relationship with a customer.
(B) A business that has access to a database that is shared among
businesses, if the business is authorized to use the database for
direct marketing purposes, unless the use of the database is exempt
from being considered a disclosure for direct marketing purposes
pursuant to subdivision (d).
(C) A business not affiliated by a common ownership or common
corporate control with the business required to comply with
subdivision (a).
(f) (1) Disclosures of personal information for direct marketing
purposes between affiliated third parties that share the same brand
name are exempt from the requirements of paragraph (1) of subdivision
(a) unless the personal information disclosed corresponds to one of
the following categories, in which case the customer shall be
informed of those categories listed in this subdivision that
correspond to the categories of personal information disclosed for
direct marketing purposes and the third party recipients of personal
information disclosed for direct marketing purposes pursuant to
paragraph (2) of subdivision (a):
(A) Number of children.
(B) The age or gender of children.
(C) Electronic mail or other addresses of children.
(D) Height.
(E) Weight.
(F) Race.
(G) Religion.
(H) Telephone number.
(I) Medical condition.
(J) Drugs, therapies, or medical products or equipment used.
(K) Social security number.
(L) Bank account number.
(M) Credit card number.
(N) Debit card number.
(O) Bank or investment account, debit card, or credit card
balance.
(2) If a list, description, or grouping of customer names or
addresses is derived using any of these categories, and is disclosed
to a third party or third parties sharing the same brand name for
direct marketing purposes in a manner that permits the third party to
identify, determine, or extrapolate the personal information from
which the list was derived, and that personal information when it was
disclosed identified, described, or was associated with an
individual, any other personal information that corresponds to the
categories set forth in this subdivision used to derive the list,
description, or grouping shall be considered personal information for
purposes of this section.
(3) If a business discloses personal information for direct
marketing purposes to affiliated third parties that share the same
brand name, the business that discloses personal information for
direct marketing purposes between affiliated third parties that share
the same brand name may comply with the requirements of paragraph
(2) of subdivision (a) by providing the overall number of affiliated
companies that share the same brand name.
(g) The provisions of this section are severable. If any
provision of this section or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
(h) This section does not apply to a financial institution that is
subject to the California Financial Information Privacy Act
(Division 1.2 (commencing with Section 4050) of the Financial Code)
if the financial institution is in compliance with Sections 4052,
4025, 4053, 4053.5 and 4054.6 of the Financial Code, as those
sections read when they were chaptered on August 28, 2003, and as
subsequently amended by the Legislature or by initiative.
(i) This section shall become operative on January 1, 2005.
SEC. 4. Section 1798.84 of the Civil Code is amended to read:
1798.84. (a) Any waiver of a provision of this title is contrary
to public policy and is void and unenforceable.
(b) Any customer injured by a violation of this title may
institute a civil action to recover damages.
(c) In addition, for a willful, intentional, or reckless violation
of Section 1798.83, a customer may recover a civil penalty not to
exceed three thousand dollars ($3,000) per violation; otherwise, the
customer may recover a civil penalty of up to five hundred dollars
($500) per violation for a violation of Section 1798.83.
(d) Unless the violation is willful, intentional, or reckless, a
business that is alleged to have not provided all the information
required by subdivision (a) of Section 1798.83, to have provided
inaccurate information, failed to provide any of the information
required by subdivision (a) of Section 1798.83, or failed to provide
information in the time period required by subdivision (b) of Section
1798.83, may assert as a complete defense in any action in law or
equity that it thereafter provided regarding the information that was
alleged to be untimely, all the information, or accurate
information, to all customers who were provided incomplete or
inaccurate information, respectively, within 90 days of the date the
business knew that it had failed to provide the information, timely
information, all the information, or the accurate information,
respectively.
(e) Any business that violates, proposes to violate, or has
violated this title may be enjoined.
(f) A prevailing plaintiff in any action commenced under Section
1798.83 shall also be entitled to recover his or her reasonable
attorney's fees and costs.
(g) The rights and remedies available under this section are
cumulative to each other and to any other rights and remedies
available under law.