The Association of Corporate Counsel and 282 of its in-house counsel members urged that the Judicial Redress Act be sent to the U.S. Senate Thursday for a vote, but a last-minute glitch delayed the bill in committee and postponed any safe harbor deal with the European Union.
“The delay is unfortunate,” says Amar Sarwal, vice president and chief legal strategist at ACC. But the good news, he adds, is that “government bodies around the world are actually collaborating now, harmonizing regulations for companies that have to comply with them. That’s a great thing.”
The act would give EU citizens the right to sue in U.S. courts over privacy right violations in the U.S. Passage of such a measure was one of the prerequisites the EU set before it would consider a new safe harbor agreement with the U.S.
The European Court of Justice invalidated the previous agreement last October, and EU authorities indicated they would start enforcing EU data privacy laws by the end of this month on some 5,000 U.S. companies that transfer personal data.
Sarwal says the change greatly increases the cost of compliance, leads to greater liability for companies and simply “makes it really hard for in-house counsel trying to have cross border transfers of information. It is especially difficult for smaller companies.”
Last month ACC sent a letter to Senate leaders and members of the Judiciary Committee, urging them to move on the bill. The letter was signed by Sarwal, along with 282 in-house counsel, including Paul Jones, GC and chief compliance officer of American Airlines Inc.; Peter Carter, chief legal officer of Delta Air Lines Inc.; and James Hunter, GC of Marriott Vacations Worldwide Corp.
ACC says the bill is backed by the Obama administration and enjoys bipartisan support in Congress.
The reason for the committee’s delay in moving it to the floor was unclear, Sarwal says, but there were rumors of a controversy over what should be disclosed by the federal government in terms of surveillance or monitoring of communications.
Forbes initially reported the delay was likely due to a request from the Electronic Privacy Information Center to postpone action until the Department of Justice releases a secret data transfer agreement on which the bill is based. That agreement outlines data transfers between EU and U.S. law enforcement agencies.
But Forbes later reported that the potential cause of the delay may have been a decision to add amendments to the bill.
Whatever the reason, Sarwal hopes the Senate will vote soon. He says the decision for ACC to become involved was an easy one because the privacy compliance issue “is a concrete interest unique to in-house counsel.”