GUEST BLOG: Is your business at risk for not knowing about the liability limits under the 911 Cybersecurity Laws (Safety Act)?

11 August 2017 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

My Guest Blogger Eddie Block (CISSP, CIPM, CIPP/G, CISA, CEH) is a senior attorney in Gardere’s Litigation Group and member of the Cybersecurity and Privacy Legal Services Team who focuses on all aspects of information cyber security, including credentialing functions, firewall and IDS deployment and monitoring, and penetration testing, and related complex litigation.  Eddie blogs at JurisHacker.

Interested in liability protections? Learn about the Safety Act.

The “Support Anti-terrorism by Fostering Effective Technologies Act of 2002 or Safety Act (no, I don’t know where the “Y” came from) seems to have flown under the radar for the past 15 years with few buyers or sellers of cybersecurity technologies taking advantage of the Act and its liability protections.

Passed in the wake of the terrorists attacks on September 11, 2001, the Act’s stated intent is to incentivize the development and deployment of Qualified Anti-Terrorism Technologies (QATT), including cybersecurity technologies, in a couple very specific ways.

First, the Act limits the Seller of a QATT’s financial liability to an amount determined by the Office of SAFETY Act within the Department of Homeland Security.  In exchange for carrying the required insurance, the seller’s liability is limited to the amount of that insurance (6 CFR Part §25.7(a)).  Additionally, no punitive, exemplary (§25.7(b)(1)), or noneconomic damages, “unless the plaintiff suffered physical harm” are available to the plaintiff (§25.7(b)(2)).

This is all great news for the Seller of a QATT, but what about their customers?  Section 25.7(d) extends these liability protections downstream:

“There shall exist only one cause of action for loss of property, personal injury, or death for performance or nonperformance of the Seller’s Qualified Anti-Terrorism Technology in relation to an Act of Terrorism. Such cause of action may be brought only against the Seller of the Qualified Anti-Terrorism Technology and may not be brought against the buyers, the buyers’ contractors, or downstream users of the Technology, the Seller’s suppliers or contractors, or any other person or entity. In addition, such cause of action must be brought in the appropriate district court of the United States.”

So putting it all together, any cause of action resulting from an Act of Terrorism regarding a QATT has exclusive federal jurisdiction, has a cap to awards, cannot include punitive, exemplary, or noneconomic (with exceptions) damages, and can only be brought against the Seller, not their subcontractors, suppliers or buyers.

What is an Act of Terrorism?  The determination of an Act of Terrorism is left to the Secretary of Defense (or their designee), but the requirements are that the Act:

  1. Is unlawful;
  2. causes harm; and
  3. uses methods designed or intended to cause mass destruction.

There is no requirement that the Act of Terrorism have a political basis.  Many attacks against public and private sector enterprises could fall under this umbrella.

Of course, this is a very high-level overview of a 10 page regulation, but with so many benefits for themselves and their customers, companies are tripping over themselves to get to the Office of Safety Act right?

Actually, according to the Approved Awards Search site only around a dozen companies have earned awards for cybersecurity related technologies.  In a world where over 300 vendors exhibited at the most recent BlackHat conference, it would seem that the ability to offer your customers any level of liability protection would make a great differentiator.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Authors

Related Services

Insights

Review of 2020 Medicare Changes for Telehealth
11 December 2019
Member Call
2019 NDI Executive Exchange
14-15 November 2019
Chicago, IL
Association for Corporate Counsel Annual Meeting 2019
27-30 October 2019
Phoenix, AZ
Foley's Government Contracts Annual Update
16 October 2019
Liviona, MI