BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 691


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS
          AB  
          691 (Calderon)


          As Amended  June 14, 2016


          Majority vote


           -------------------------------------------------------------------- 
          |ASSEMBLY:  |      |(May 11, 2015) |SENATE: |36-1  |(August 1, 2016) |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |
           -------------------------------------------------------------------- 
                 (vote not relevant)


           ---------------------------------------------------------------------- 
          |                |     |                |                  |           |
          |                |     |                |                  |           |
          |COMMITTEE VOTE: |     |(August 23,     |RECOMMENDATION:   |concur     |
          |                |10-0 |2016)           |                  |           |
          |                |     |                |                  |           |
          |                |     |                |                  |           |
          |                |     |                |                  |           |
          |                |     |                |                  |           |
           ---------------------------------------------------------------------- 
          (Jud.)




          Original Committee Reference:  JUD.


          SUMMARY:  Establishes the Revised Uniform Fiduciary Access to  
          Digital Access Act (RUFADAA) to specify rules for the disclosure  
          of electronic information from a custodian of a person's digital  
          assets (custodian) to the personal representative of the estate  
          of a deceased user (representative) or trustee of the deceased  








                                                                     AB 691


                                                                    Page  2


          user's trust (trustee) for the purpose of administering the  
          estate or trust.   


          The Senate amendments delete the Assembly version of this bill,  
          and instead:  


          1)Establish the RUFADAA and authorizes a decedent's personal  
            representative or trustee (fiduciary) to access and manage  
            digital assets and electronic communications, as specified.  


          2)Authorize a person to use an online tool to give directions to  
            the custodian of his/her digital assets regarding the  
            disclosure of those assets. 


          3)Specify that, if a person has not used an online tool to give  
            that direction, he or she may give direction regarding the  
            disclosure of digital assets in a will, trust, power of  
            attorney, or other record.


          4)Require a custodian, as specified, of the digital assets to  
            comply with a fiduciary's request for disclosure of digital  
            assets to terminate an account, except under certain  
            circumstances, including when the decedent has prohibited this  
            disclosure using the online tool.  


          5)Specify that a user's direction through the online tool or  
            testamentary document would override a contrary provision in a  
            terms-of-service agreement.


          6)Provide that a fiduciary's or designated recipient's access to  
            digital assets may be modified or eliminated by a user, by  
            federal law, or by a terms-of-service agreement when the user  
            has not provided any direction as specified by this bill.










                                                                     AB 691


                                                                    Page  3


          7)Authorize the custodian, in its sole discretion, to do any of  
            the following when disclosing the digital assets of a user:


             a)   Grant the fiduciary or designated recipient full access  
               to the user's account;


             b)   Grant the fiduciary or designated recipient partial  
               access to the user's account sufficient to perform the  
               tasks with which the fiduciary or designated recipient is  
               charged; and


             c)   Provide the fiduciary or designated recipient with a  
               copy in a record of any digital asset that, on the date the  
               custodian received the request for disclosure, the user  
               could have accessed if the user were alive and had full  
               capacity and access to the account.


          8)Authorize a custodian to assess a reasonable administrative  
            charge for the cost of disclosing digital assets and would not  
            require a custodian to disclose a digital asset deleted by a  
            user.


          9)Provide that if a user directs or a fiduciary or designated  
            recipient requests a custodian to disclose some, but not all,  
            of the user's digital assets, the custodian need not disclose  
            the assets if segregation of the assets would impose an undue  
            burden on the custodian. 


          10)Authorize the custodian, fiduciary, or designated recipient  
            to petition the court for an order, as specified, if the  
            custodian believes the direction or request imposes an undue  
            burden.


          11)With respect to the content of electronic communications of  
            the user:








                                                                     AB 691


                                                                    Page  4




             a)   Provide that, if a deceased user consented to or a court  
               directs disclosure of the content of electronic  
               communications of the user, the custodian must disclose to  
               the personal representative of the estate of the user the  
               content of an electronic communication sent or received by  
               the user if the personal representative gives to the  
               custodian  specified forms of documentation, including,  
               among other things:  i) a written request for disclosure;  
               ii) a certified copy of the user's death certificate; iii)  
               a certified copy of the letter of appointment of the  
               representative; and iv) a copy of the user's will, trust,  
               or other record evidencing the user's consent to  
               disclosure, unless the user provided direction using an  
               online tool.


             b)   Provide that, unless otherwise ordered by the court,  
               directed by the user, or provided in a trust, the custodian  
               must disclose to a trustee that is not an original user of  
               an account the content of an electronic communication sent  
               or received by an original or successor user and carried,  
               maintained, processed, received, or stored by the custodian  
               in the account of the trust if the trustee gives to the  
               custodian specified forms of documentation.


          12)With respect to the catalogue of electronic communication  
            sent or received by the user, and digital assets, other than  
            the content of electronic communications, of the user:


             a)   Provide that, unless the user prohibited disclosure of  
               digital assets or the court directs otherwise, the  
               custodian must disclose to the personal representative of  
               the estate of a deceased user a catalogue of electronic  
               communications sent or received by the user and digital  
               assets, other than the content of electronic  
               communications, of the user, if the personal representative  
               gives to the custodian specified documentation, including,  
               among other things:  i) a written request for disclosure;  








                                                                     AB 691


                                                                    Page  5


               ii) a certified copy of the user's death certificate; and  
               iii) a certified copy of the letter of appointment of the  
               representative.


             b)   Provide that, unless otherwise ordered by the court,  
               directed by the user, or provided in a trust, a custodian  
               must disclose, to a trustee that is not an original user of  
               an account, the catalogue of electronic communications sent  
               or received by an original or successor user and stored,  
               carried, or maintained by the custodian in an account of  
               the trust and any digital assets, other than the content of  
               electronic communications, in which the trust has a right  
               or interest if the settlor of the trust is deceased and the  
               trustee gives to the custodian specified documentation.


          13)Provide that the legal duties imposed on a fiduciary charged  
            with managing tangible property apply to the management of  
            digital assets, including all of the following:  a) the duty  
            of care; b) the duty of loyalty; and c) the duty of  
            confidentiality.


          14)Provide that a fiduciary with authority over the property of  
            a decedent or settlor has the right of access to any digital  
            asset in which the decedent or settlor had a right or  
            interest, as specified.


          15)Require a custodian, not later than 60 days after receipt of  
            the information required, as specified, to comply with a  
            request from a fiduciary or designated recipient to disclose  
            digital assets or terminate an account.  Further provides that  
            if the custodian fails to comply with a request, the fiduciary  
            or designated recipient may apply to the court for an order  
            directing compliance.


          16)Make disclosure of the contents of the deceased user's or  
            settlor's account to a fiduciary of the deceased user or  
            settlor subject to the same license, restrictions, terms of  








                                                                     AB 691


                                                                    Page  6


            service, and legal obligations, including copyright law, that  
            applied to the deceased user or settlor.


          FISCAL EFFECT:  None


          COMMENTS:  In July 2014, the National Conference of  
          Commissioners on Uniform State Laws (NCCUSL) approved the  
          Uniform Fiduciary Access to Digital Assets Act (UFADAA), which  
          was recommended for enactment in all states "to vest fiduciaries  
          with the authority to access, control, or copy digital assets  
          and accounts[,] ...  remove barriers to a fiduciary's access to  
          electronic records[,] and to leave unaffected other law, such as  
          fiduciary, probate, trust, banking, investment, securities, and  
          agency law."  UFADAA was recently revised to clarify the  
          application of federal privacy laws and give legal effect to an  
          account holder's instructions for the disposition of digital  
          assets.  According to NCCUSL, the 2014 UFADAA provided  
          fiduciaries with default access to all digital information, but  
          the Revised UFADAA protects the contents of electronic  
          communications from disclosure without the user's consent, and  
          fiduciaries can still access other digital assets unless  
          prohibited by the user.


          Prior versions of this bill would have enacted the Privacy  
          Expectation Afterlife and Choices Act, which is an alternative  
          approach to disclosure of a decedent's electronic information.   
          As amended in the Senate, this bill adopts a modified version of  
          the RUFADAA and attempts to provide a clear legal framework to  
          help probate courts resolve questions about how to balance  
          competing privacy and estate administration concerns when a  
          decedent's estate representative, for the purpose of settling  
          the estate, seeks information, records, digital assets, or  
          electronic communications, from, typically, the email or social  
          media account of the deceased user.


          NCCUSL states that the RUFADAA was recently approved and  
          represents a consensus reached among stakeholders, including  
          technology firms, privacy advocates, bankers, and the trust and  








                                                                     AB 691


                                                                    Page  7


          estate bar.  NCCUSL asserts that the "consensus was the result  
          of a concerted effort by all parties over the last few months to  
          agree on a reasonable regulatory framework that will balance the  
          privacy interests of internet users with the need for  
          fiduciaries to perform their tasks and ensure the orderly  
          transfer of a decedent's assets to heirs.  It gives legal effect  
          to an internet user's wishes when they are known, and provides  
          reasonable default rules that apply if the user has not  
          expressed a contrary intent.  The act represents the best  
          opportunity to enact uniform legislation for an industry that  
          operates in every state."  To date, 10 states (Colorado,  
          Florida, Idaho, Indiana, Michigan, Oregon, Tennessee,  
          Washington, Wisconsin, and Wyoming) have enacted RUFADAA, and at  
          least 18 other states have introduced RUFADAA legislation this  
          year.


          Scope of the bill.  Unlike the broader approach of the RUFADAA  
          model act adopted by the NCCUSL, the scope of this bill does not  
          include powers of attorney, trusts, and conservatorships where  
          the principal, trustor, and conservatee, respectively, are still  
          alive.  Instead, this bill has a more limited scope that applies  
          only to situations where a person has died, and electronic  
          information is being requested from the custodian by a  
          decedent's personal representative, administrator, executor, or  
          trustee for the purpose of ascertaining the decedent's assets  
          and liabilities.


          Disclosure of electronic communications.  This bill provides  
          protections for a deceased user's private electronic  
          communications by establishing the circumstances under which the  
          custodian of the electronic communications could disclose those  
          communications.  This bill establishes a three-tier priority  
          system for determining the user's intent for disclosure of his  
          or her electronic communications.


          First in priority, this bill authorizes disclosure pursuant to  
          the user's designation through an online tool.  This tool  
          provides the most current reflection of the user's intent for  
          disclosure to another person.  Second, the user can provide  








                                                                     AB 691


                                                                    Page  8


          directions in an estate plan for the disposition of the user's  
          digital assets.  The custodian would then be able to rely on the  
          testamentary document containing these disclosure instructions,  
          which would then have legal effect pursuant to this bill.   
          Finally, if the user did not provide any direction regarding  
          disclosure of digital assets, the terms-of-service governing the  
          account would apply.  If the terms-of-service do not address  
          fiduciary access to digital assets, the default rules provided  
          in this bill would apply.  Opponents assert that, contrary to  
          what the bill provides, an online tool should take precedence  
          over a user's testamentary will only if the online tool is used  
          later in time after the will is executed.  


          Documentation needed for disclosure once authorization  
          established.  Authorization of disclosure is not alone  
          sufficient to compel disclosure under this bill; additional  
          documentation must be provided to the custodian by the  
          representative of the decedent's estate.  With respect to the  
          content of electronic communications sent or received by the  
          user, the bill provides that if a deceased user consented to or  
          a court directs disclosure of such content, the custodian make  
          such disclosure to the personal representative of the estate of  
          the user if the personal representative gives to the custodian  
          all of the following:  1) a written request for disclosure in  
          physical or electronic form; 2) a certified copy of the death  
          certificate of the user; 3) a certified copy of the letter of  
          appointment of the representative, a small-estate affidavit, or  
          court order; and 4) a copy of the user's will, trust, power of  
          attorney, or other record evidencing the user's consent to  
          disclosure of the content of electronic communications, unless  
          the user provided direction using an online tool (in which case  
          the online tool evidences the user's content, making this  
          documentation unnecessary).


          With respect to the catalogue of electronic communications sent  
          or received by the user and digital assets other than the  
          content of electronic communications, the bill requires the  
          custodian to make such disclosure to the personal representative  
          unless the user prohibited disclosure of digital assets or the  
          court directs otherwise.  More specifically, if the user did not  








                                                                     AB 691


                                                                    Page  9


          prohibit such disclosure and there is no contrary direction from  
          the court, then under this bill the custodian shall make the  
          disclosure if the personal representative has given the  
          custodian all of the following:  1) a written request for  
          disclosure in physical or electronic form; 2) a certified copy  
          of the death certificate of the user; and 3) a certified copy of  
          the letter of appointment of the representative, a small-estate  
          affidavit, or court order.  The bill specifies similar  
          documentation relevant to trusts to be provided to the custodian  
          by a trustee seeking disclosure of either the catalogue or  
          content of electronic communications.


          For both the content and catalogue of electronic communications,  
          the bill also requires the personal representative to provide  
          any of the following additional documentation, if requested by  
          the custodian:  1) a number, user name, username, address, or  
          other unique subscriber or account identifier assigned by the  
          custodian to identify the user's account; 2) evidence linking  
          the account to the user; 3) an affidavit stating that disclosure  
          of the user's digital assets is reasonably necessary for estate  
          administration; and 4) an order of the court making certain  
          findings, as specified.  Opponents of the bill assert that some  
          of these items of information - particularly the unique  
          subscriber information or other evidence linking the account to  
          the decedent for which records are being requested - should be  
          required to be provided in all cases rather than provided only  
          if requested by the custodian.  They also recommend that the  
          bill should require the fiduciary to show that the information  
          contained in the account is necessary for the administration of  
          the estate, and not just in cases where the custodian has  
          requested production of a court order making such a finding.


          Terms-of-service agreements.  As discussed above, if the user  
          did not provide any direction regarding disclosure of digital  
          assets through an online tool or testamentary document (e.g. a  
          will), then under the third-tier of the rule, the  
          terms-of-service agreement governing the account would apply.   
          This bill does not change or impair a right of a custodian or a  
          user under a terms-of-service agreement to access and use  
          digital assets of a user, and does not give a fiduciary or  








                                                                     AB 691


                                                                    Page  10


          designated recipient any new or expanded rights other than those  
          held by the user for whom, or for whose estate or trust, the  
          fiduciary or designated recipient acts or represents.  This bill  
          provides that a fiduciary's or designated recipient's access to  
          digital assets may be modified or eliminated by a user, by  
          federal law, or by a terms-of-service agreement when the user  
          has not provided any direction, as specified.  Opponents,  
          contend that the bill will ultimately allow custodians to freely  
          control the release and retention of digital assets under the  
          terms of service, because most users will not have a will or  
          make use of an online tool.


          Author's intent to narrow grant of immunity from liability  
          provided to custodians for compliance with this bill.  As  
          currently in print, this bill simply provides that "a custodian  
          and its officers, employees, and agents are immune from  
          liability for an act or omission done in good faith in  
          compliance with this part [i.e. the entirety of RUFADAA]."   
          Probate Code Section 881(f), as proposed by this bill, would  
          grant custodians broad immunity from liability as long as they  
          act in good faith in complying with the Act-with no exception  
          even for conduct amounting to gross negligence or willful or  
          wanton misconduct.  Opponents of the bill contend that the broad  
          grant of immunity in this bill gives custodians no incentive to  
          act responsibly, and increases the probability that cases of  
          privacy invasion will occur since there will be little  
          consequence for careless behavior, or even gross negligence.  


          While the NCCUSL's intent may have been to protect the custodian  
          from liability for disclosure of a digital asset as long as the  
          custodian was acting in good-faith compliance, the Judiciary  
          Committee has a long history of ensuring that legislation it  
          approves does not provide blanket immunity from liability for  
          acts rising to the level of gross negligence or willful or  
          wanton misconduct, even when done "in good faith."  (See, e.g.  
          AB 83 (Feuer), Chapter 77, Statutes of 2009, amending the  
          California "Good Samaritan" statute to grant qualified immunity  
          to any person who renders medical or non-medical aid in an  
          emergency, so long as that person acts in good faith and not for  
          compensation, but specifically exempting gross negligence and  








                                                                     AB 691


                                                                    Page  11


          willful or wanton misconduct.)  


          In order to ensure that this Act, should it become law, does not  
          immunize disclosure of information that amounts to gross  
          negligence or willful or wanton misconduct, the author has  
          agreed to take steps to revise the immunity provisions proposed  
          by this bill in Probate Code Section 881(f).  Because this bill  
          cannot be amended in this House to address this concern, the  
          author instead proposes that another bill, SB 873 (Beall) of the  
          current legislative session, be amended to accomplish this  
          purpose.  Specifically, it is the author's intent that SB 873  
          (of which he is a principal co-author) shall be enacted  
          subsequent, and as a companion, to this bill so that if this  
          bill, is chaptered, then SB 873 shall also be chaptered to  
          replace the version of Section 881 of the Probate Code in this  
          bill.  In other words, it is the author's intent that SB 873  
          enacts the ultimate language of Section 881, namely, to exempt  
          gross negligence and willful or wanton misconduct from any  
          immunity from liability for custodians provided by this Act.


          Analysis Prepared by:                                             
          Anthony Lew / JUD. / (916) 319-2334  FN: 0004832