LegalMatch: Business Law

Berkeley Requires Mobile Retailers to Warn You About Your Phone

Earlier this year in May, the City of Berkeley passed an ordinance mandating mobile phone retailers to make certain safety disclosures to all consumers in subsequent sales. Specifically, Berkeley wanted cell retailers to put consumers on notice that carrying a cellphone in one’s pants, shirt pocket, or tucked in one’s bra could result in exceeding federal radiation exposure guidelines.

CTIA – The Wireless Association, representing mobile phone retailers, quickly responded with a lawsuit in an attempt to put a permanent stop to Berkeley’s ordinance requiring disclosures. CTIA argued the ordinance was preempted by federal law, contending federal regulation of mobile retailer disclosures controlled over attempted state and municipal regulations. CTIA further argued that the ordinance violated mobile retailers’ right to commercial speech under the First Amendment. 

In its argument, CTIA let on to the real reason it staunchly opposed the ordinance, emphasizing that requiring mobile retailers to disclose more health information would unnecessarily interfere with commercial development. In essence, CTIA argued potential harm to mobile phone sales was more important than potential health hazards to future consumers. In that light, federal district Judge Edward Chen made the right decision when he held in favor of the City of Berkeley.

Requiring Disclosure of Truthful and Helpful Information to the Public Is Not an “Obstacle” To Federal Regulation

In its argument against Berkeley’s ordinance, CTIA maintained mobile networks and retailers were already regulated by the Federal Communications Commission (FCC). The FCC already has a regulation regarding the minimum advised space one should carry their mobile phone away from their body. CTIA argued such federal regulations were appropriate because mobile networks are by nature national networks and subjecting them to state standards would “disrupt...uniformity and place additional burdens on industry and the network itself.” CTIA presses on that Berkeley’s ordinance thus creates an “obstacle” to the FCC's purpose by creating its own municipal regulation and should be considered preempted, or overridden, by existing federal law.

In response, Judge Chen accurately points out that the Berkeley ordinance does not in fact pose an obstacle to the FCC’s purpose, as the required disclosure “is consistent with the FCC’s statements and testing procedures regarding spacing.”  Berkeley’s ordinance does not deviate from the FCC’s mandated regulations.

Instead, it merely advises consumers that carrying mobile phones either in their pockets or bras could potentially exceed federal guidelines. Judge Chen further noted the FCC has not objected in any way to states or cities requiring warning disclosures to consumers regarding the spacing issue.  Because of this and because the ordinance does not conflict with existing FCC regulations, Judge Chen held Berkeley’s ordinance was not overridden by federal law nor did it pose a threat to national uniformity concerning mobile network regulations.

Accurate Health Disclosures Do Not Impede Commercial Speech

CTIA argued that even if Berkeley’s ordinance is not eclipsed by federal law, it should be struck down as an unconstitutional violation of CTIA members’ right to commercial speech. Under this argument, CTIA maintained that Berkeley must give a substantial government interest or else it must be struck down as unconstitutional.

However, Judge Chen was quick to clarify that the issue at hand was not regarding commercial speech, but rather compelled disclosure of commercial speech, which the Supreme Court has historically treated differently. The Supreme Court has held that compelled disclosure of commercial speech, unlike suppression or restriction of such speech, only requires the State to show any conceivable government interest related to the regulation.

Such a low standard applied this case would mean Berkeley only had to show one possible government interest related to the ordinance in order for it to pass as constitutional. Berkeley met that minimum requirement easily with its ordinance, which was put in to place for the purpose of enhancing public health and safety. Thus, applying past Supreme Court holdings, Judge Chen correctly upheld Berkeley’s ordinance as constitutional.

Authored by Sarah Lee, LegalMatch Legal Writer

Cybersecurity Law Overview

Cybersecurity laws concern the protection of information technology and computer systems, and the prevention of cyber-attacks, including viruses, phishing, and denial of service (DOS) attacks. Cyber-attacks can also include worms, Trojan horses, unauthorized access, including theft of intellectual property or confidential information, and attacks on control systems. Among the cyber-security measures used to prevent the occurrence of cyber-attacks are firewalls, anti-virus software, encryption, and login passwords.

There are three principal cybersecurity regulations under federal law. They are the Health Insurance Portability and Accountability Act (HIPAA)of 1996, the Gram-Leach-Billey Act of 1999, and the Homeland Security Act of 2002, of which the Federal Information Security Management Act was a part. Each of these regulations requires that healthcare organizations, federal agencies, and financial companies, safeguard their systems and information.

Title I of HIPAA provides protection of health care coverage for individuals and their families when they obtain different employment or become unemployed. Title II of HIPAA, which is called the Administrative Simplification (AS) provisions, requires that national standards be established for electronic health care transactions, and ways in which to identify providers, health insurance coverage, and employers.

The Gram-Leach-Billey Act of 1999, also called the Financial Services Modernization Act of 1999, removed obstacles in the market that prohibited banking, securities, and insurance companies, from conducting business as any combination of an insurance company, an investment bank, and a commercial bank. There are certain regulations within the Act that mandate that consumers’ nonpublic personal information, or information that could identify them, be protected. They are the Financial Privacy Rule, Safeguards Rule, and Pretexting Protection.

The Homeland Security Act of 2002 was enacted in the wake of the September 11 attacks, and later mailings of anthrax. The Act is the basis of the Cyber Security Enhancement Act of 2002, which modified the U.S. Patriot Act by lessening restrictions on Internet service providers (ISPs) regarding when, and to whom, they can provide information about subscribers. This aspect of the Act was especially disconcerting to privacy advocates who contend that there is an increased risk to personal privacy and security.

There are organizations that have experienced some type of security breach or theft. These include law firms, 14% of which have reported such cyber-attacks. Law firms’ security measures, including their protection of confidential information sent to vendors like printing companies and word processing firms, are being examined by banks, which are conducting on-site technology audits of the firms. The banks, in turn, are being encouraged by regulators to strengthen their cyber-security measures.

Recently, letters were sent to banks from New York’s Department of Financial Services, inquiring about ways in which to protect information sent to third-party vendors, including law firms and accounting firms. Law firms are considered to be especially vulnerable to cyber-attacks because clients often turn over to them all of their sensitive information.

Furthermore, the Department of Homeland Security is conducting an investigation into potential flaws in medical devices that could permit packers to obtain control of the equipment with the purpose of maiming or killing patients. Hackers who abuse cybersecurity flaws could, for instance, place an order for an excessive dose from an infusion pump, or a fatal shock from a heart pump.

As a result of these flaws, companies have reportedly made improvements to their devices so as to strengthen their cybersecurity.

Authored by Roxanne Minott, LegalMatch Legal Writer and Attorney at Law. For additional articles by Roxanne Minott, visit the LegalMatch Attorney Blog.