The House Energy and Commerce Committee is expected to mark up the “American Data Privacy and Protection Act” (ADPPA) on Thursday, legislation that reflects years of work on a national privacy framework. The bill is sponsored by Reps. Frank Pallone (D-N.J.), Cathy McMorris Rodgers (R-Wash.), and Sen. Roger Wicker (R-Miss.).
Privacy is an important issue, and lawmakers deserve recognition for working towards a national privacy framework. The current patchwork of state privacy legislation is becoming increasingly untenable – if all 50 states enacted separate privacy laws, it could cost the U.S. economy $1 trillion over ten years, $200 billion of that burden falling on small businesses.
Unfortunately, some parts of ADPPA would unleash a trial lawyer bonanza with no policy justification or benefit to consumers. Given these flaws, Republicans should not rush to pass a privacy bill before retaking control of Congress in November.
First, the bill contains a private right of action that trial lawyers will weaponize to fleece companies for millions of dollars. A trial lawyer could seek a remedy for subjective, “compensatory” damages like emotional distress, inconvenience, loss of opportunity, damaged relationships, and other hard to prove claims. This provision incentivizes trial lawyers to launch frivolous and arbitrary suits against companies with the hope that a company will settle instead of spending millions of dollars to defend against specious claims in court.
Second, the bill contains an unwarranted federal intrusion into the negotiations of private parties. ADPPA bans joint-action waivers, which are agreements between consumers and companies to resolve individual claims without having to go to court. Banning joint-action waivers would empower trial lawyers to file “class arbitrations,” a new avenue trial lawyers are exploiting to extort companies. Class arbitrations allow trial lawyers to make a killing while robbing millions of consumers of the chance to resolve individualized claims.
Third, while the ADPPA includes some state preemption, the bill does not preempt several existing private rights of action that trial lawyers currently use to shake down companies. The bill preserves private rights of action found in California’s privacy law and Illinois’s biometric data law. It is unclear whether the ADPPA’s numerous exemptions only apply to the state laws as currently written, or whether the exemptions will apply to potential future changes in the law.
Given these flaws, there is no reason Republicans should help Democrats pass ADPPA before November. Democrats have failed to enact large parts of their legislative agenda, and Republicans are widely expected to regain control of Congress in the November midterms. There is no need to give progressives a last-minute accomplishment to take credit for on the campaign trail.
While the ADPPA is a step towards a national privacy framework, Republicans should hold the line against poison pill provisions that would enrich trial lawyers at the expense of consumers. No national privacy framework should include trial lawyer giveaways. Instead of rushing to pass ADPPA before the problems are ironed out, Republicans should resume discussions for a national privacy framework after the midterm elections.