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Two United States congressmen introduced legislation in late December that would exclude certain digital currencies from being defined as securities – a bill that, if enacted, may finally provide the cryptocurrency industry with regulatory clarity regarding when the offer and sale of digital tokens must comply with federal securities laws. The Token Taxonomy Act of 2018 – introduced on December 20, 2018 by Reps. Warren Davidson (R-Ohio) and Darren Soto (D-Florida) – would, among other…
In November, Tyler wrote about insurance issues raised by both the European Union’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act, which goes into effect on January 1, 2020. California’s governor Jerry Brown signed two other cyber-related laws in September, which will also go into effect on January 1, 2020 – Assembly Bill 1906 and Senate Bill 327, which address security concerns relating to devices that are capable of connecting to the…
A 6th Circuit case decided earlier this year demonstrates how positions taken by insureds in prior litigation can impact or foreclose coverage in subsequent disputes with insurers. See K.V.G. Properties, Inc. v. Westfield Ins. Co., 900 F.3d 818 (6th Cir. 2018). In K.V.G. Properties, Inc., K.V.G., was unaware that its tenant was operating a cannabis growing operation. Although Michigan allowed for limited legal marijuana cultivation, there was no evidence the tenant was in compliance…
The attorney-client privilege, which prohibits the compelled disclosure of confidential communications between an attorney and their client, is enshrined in common law and statutory codes across the country. See, e.g., Cal. Evid. Code § 950 et seq.; Upjohn Co. v. United States, 449 U.S. 383, 389 (1981) (the fundamental purpose of the attorney-client privilege “is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance…
An obscure niche product less than a decade ago, cyber insurance is now a staple of many companies’ risk transfer programs. Its rise in prominence is no wonder. High-profile data breaches have caused businesses millions of dollars in losses and untold reputational harm. Companies are right to shed some of their cyber risks through insurance, and the basic protections it offers are well known. It pays for the business’s investigation and notification to consumers of…
I recently participated in a panel at the Association of Business Trial Lawyers Annual Meeting – “Bad News Delivered: The Board Meeting and Crisis Management.”  Among other topics, the panel discussed the role of insurance counsel in crisis management, and addressed the following questions: Who Is The Client?  When meeting with a board in a time of crisis, it is critical to identify whether your client is the company or the board.  And if it…
New cryptocurrencies and tokens have been popping up all over the place, leading the SEC to set up an initial coin offering (ICO) section on its website and to promote recent enforcement actions in the digital currency space. The proliferation of new tokens offers a growing opportunity for cross-over and cooperation between different federal agencies. The SEC representative at a recent Bar Association of San Francisco panel last week noted that the SEC’s cyber unit…
The Sixth Circuit recently entered a ruling in American Tooling Center, Inc. v. Travelers Casualty and Surety Co. of America, 2018 WL 3404708 (6th Cir. July 13, 2018), soundly rejecting a cyber carrier’s extremely narrow reading of its policy’s “Computer Fraud” coverage.  The insured American Tooling Center (“ATC”) had fallen for a “social engineering” scam.  ATC received emails from someone impersonating one of its vendors and claiming to have changed its wire instructions.  ATC transferred…
A federal district court in Florida has ruled that a claim against a policyholder arising out of a hacker’s theft of confidential credit card information was not covered under a commercial general liability (CGL) policy.  St. Paul Fire & Marine Ins. Co. v. Rosen Millennium, Inc., M.D. Fla. Case No. 17-cv-540 (Sept. 28, 2018).  This is not the first such decision.  Courts have held similarly in Innovak Int’l, Inc. v. Hanover Ins. Co., 280 F.Supp.3d…
Defense counsel often assume that an insurer has a “duty” to fund any settlement opportunity their client wants to accept. The legal requirements under California law for triggering an insurer’s duty to settle are far more nuanced.  For non-insurance practitioners, this is often a confounding and confusing topic!  The fact is, an insurer doesn’t have a “duty to settle” a case simply because the defendant wants to do so, or because defense counsel recommends it. …