BILL ANALYSIS Ó
SB 873
Page 1
(Without Reference to File)
SENATE THIRD READING
SB
873 (Beall)
As Amended August 25, 2016
Majority vote
SENATE VOTE: 39-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Housing |6-0 |Chiu, Steinorth, | |
| | |Burke, Chau, Beth | |
| | |Gaines, Lopez | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Revenue & |9-0 |Ridley-Thomas, | |
|Taxation | |Brough, Dababneh, | |
| | |Gipson, Mullin, | |
| | |O'Donnell, Patterson, | |
| | |Quirk, Wagner | |
| | | | |
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|----------------+-----+----------------------+--------------------|
|Appropriations |15-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Chang, Eggman, | |
| | |Eduardo Garcia, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood, McCarty | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
| | | | |
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SUMMARY: Companion legislation to AB 691 (Calderon) of the
current legislative session, the Revised Uniform Fiduciary
Access to Digital Assets Act (RUFADAA), that seeks to narrow the
scope of immunity from liability provided to custodians of
digital assets for complying with the Act. Specifically, this
bill:
1)Declares that is the intent of the Legislature that this act
shall be enacted subsequent, and as a companion, to AB 691 so
that in the event that AB 691 is chaptered, the version of
Probate Code Section 881 reflected in this act shall replace
the version of that same section which is provided in AB 691.
2)Establishes that a custodian and its officers, employees, and
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agents are not immune from liability for an act or omission
done in good faith in compliance with AB 691 in a case of
gross negligence or willful or wanton misconduct of the
custodian or its officers, employees, or agents.
3)Provides that this act shall become operative only if AB 691
is also enacted and this act is enacted after AB 691.
4)Makes other technical and corrective amendments.
FISCAL EFFECT: None.
COMMENTS: This bill is a companion to AB 691 (Calderon) of the
current session, and is intended to enact changes to Probate
Code Section 881, as proposed to be added by AB 691.
Specifically, this bill seeks to narrow the scope of custodians'
immunity from liability for compliance with RUFADAA, as
currently provided by AB 691. As currently in print, AB 691
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 881Subdivision (f), as proposed
by AB 691, 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 AB 691, including the American Civil Liberties
Union (ACLU), Consumer Watchdog, and the Privacy Rights
Clearinghouse, contend that the broad grant of immunity in that
legislation gives custodians no incentive to act responsibly,
and increases the probability that cases of privacy invasion
will occur since there will be little consequence to custodians
for their careless actions, or even gross negligence. They
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state:
Is it possible that [custodians] will make mistakes -
both by releasing too much information without
authorization, or releasing it to the wrong person? We
think the history of digital records shows that it is
likely there will be mistakes. While mistakes cannot
be prevented they should be deterred. Unfortunately,
(AB 691) does very little or nothing to give technology
companies an incentive to behave responsibly. (AB 691)
gives custodians sole and complete discretion to
release all digital assets, and it gives them complete
immunity when they do it wrongly. ...The only liability
they would apparently not be absolved for is for direct
violation of a court order, which is arguably beyond
the province of the Legislature in any event. The
combination of total discretion and no responsibility
for unlawful conduct will give custodians very little
reason to behave with reasonable prudence.
According to the Uniform Law Commission (ULC), the drafters of
RUFADAA, the release of digital assets or electronic
communications, if not done carefully, could result in harm or
an invasion of privacy. The ULC's official comments to RUFADAA
even state: "Access to a digital asset might invade the privacy
or harm the reputation of the decedent, protected person,
principal, or settlor; it might harm the family or business of
the decedent, protected person, principal, or settlor; and it
might harm other persons." (Uniform Law Commission, Revised
Uniform Fiduciary Access to Digital Assets Act (2015), p. 30.)
While the ULC'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 Legislature
has a long history of ensuring that legislation it approves does
not provide blanket immunity from liability for acts rising to
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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 willful or wanton
misconduct.)
In order to ensure that RUFADAA, should it become law, would not
immunize a custodian from liability for a disclosure of
information that constituted gross negligence or willful or
wanton misconduct, the author of AB 691 has agreed to revise the
immunity language in Probate Code Section 881subdivision (f), as
provided in his bill. Because AB 691 cannot be amended in the
Assembly to address this concern, the author of AB 691 and the
author of this bill have agreed to use this bill as a vehicle to
amend Section 881, as proposed to be added by AB 691, for the
purpose of narrowing the scope of custodian immunity from
liability. As amended in the Assembly, this bill establishes
that, if RUFADAA is enacted into law, a custodian is not immune
from liability for an act or omission done in good faith in
compliance with the Act but which constitutes gross negligence
or willful or wanton misconduct. In addition, the author of AB
691 is now the principal co-author of this bill.
Recent amendments state the Legislature's intent that this act
shall be enacted subsequent, and as a companion, to AB 691 so
that in the event that AB 691 is chaptered, the version of
Section 881 of the Probate Code reflected in this act shall
replace the version of that same section which is provided in AB
691. The bill specifically provides that this bill shall become
operative only if Assembly Bill 691 is also enacted and this
bill is enacted after Assembly Bill 691.
As recently amended, the bill also clarifies that a custodian
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and its officers, employees, and agents are immune from
liability for an act or omission done in good faith and in
compliance with RUFADAA (emphasis added), and corrects a
drafting error from the previous set of amendments.
Analysis Prepared by:
Anthony Lew / JUD. / (916) 319-2334 FN: 0005006