b'CCPA Compliance: The Poison Pill What Your Companyin North Dakotas Needs to Know Mechanics Lien LawAny company that does business in California should evaluate its2. Update the Privacy Policy Posted on YourMost jurisdictions, including North Dakota, have a remedy forAt the end of the project, the owner disputed the contractors obligations to comply with the California Consumer Privacy ActCompanys Website non-payment to those who provide labor or materials to improvecharges and did not pay. The contractor sued and asserted a (CCPA). Enacted in response to a growing concern regarding dataWhile including a privacy policy on a company website is a bestreal property. In North Dakota that remedy is called a constructionmechanics lien against the owners property. At trial, the jury privacy, the CCPA provides California residents with rights to thepractice for businesses, the CCPA actually mandates disclosurelien. In most other jurisdictions, it is called a mechanics lien. Butawarded the contractor more than 82% of the amount it sought, data that companies collect about them. The effective date of theto consumers regarding several categories of personal consumerNorth Dakotas mechanics lien statute contains a poison pillwhich was more than twice the amount the owner claimed CCPA was January 1, 2020. Unfortunately, the California Stateinformation that may be collected prior to such collection. Inprovision that makes it dangerous for contractors to exerciseit should have to pay. The court ruled that the contractor was Legislature rushed the CCPA into law with broad language andaddition, the CCPA requires that a company must disclose theirthat remedy. the prevailing party, but under the mechanics lien statutes fee limited guidance. Thus, it is crucial for companies doing businesspolicies regarding gathering, sharing, retaining, and deletingThe various state legislatures enacted mechanics lien statutesprovision, it awarded the owner $3,231 in attorneys fees because in California to understand how to comply with the CCPA. Whileinformation and the consumers rights regarding the data. because construction is different from other commercialthe owner successfully challenged the amount of the lien. After the CCPA only applies to California residents, it is expected thatan appeal to the North Dakota Supreme Court and further similar laws will be enacted in other states in the coming years. The first step in drafting a CCPA-compliant privacy policy is tosituations. If you stop making payments after buying a car, theproceedings at the district court level, the owner was ultimately map the categories of data maintained by your company and thebank or the dealership can repossess the car. It is much harder forawarded $12,500 in attorneys fees. The contractors eventual Three Important Steps to Mitigate CCPAsources of that data. The completed data mapping will providea carpenter to take back the labor and material he or she put intorecovery was reduced by over 15% through the attorneys fee Liability the information necessary to begin designing a CCPA-compliantbuilding a house. A mechanics lien provides the contractor with aprovision in the statute. It is easy to imagine cases where an mechanism to force the sale of the property that was improved toattorneys fee award to the owner could completely swallow 1. Determine Whether the CCPA Applies toprivacy policy and will provide an opportunity for your companyget compensated for his or her services.to evaluate the data it collects and the utility of that data. or even exceed the amount the contractor wins, yielding the Your Company contractor a victory in principal, but a disastrous defeat in reality.However, North Dakotas construction lien statute contains The CCPA applies to for-profit entities doing business in California3. Devise a Strategy in Response toan attorneys fees provision that favors the owner of the real that collect or process personal information on customers andVerifiable Consumer Requests property. The relevant portion of the North Dakota statuteContractors need to be cautious before using the mechanics lien meet at least one of the following criteria: remedy in North Dakota. There are ways to mitigate the danger There are two key consumer protection features of the CCPA:provides: Any owner that successfully contests the validity orfrom the attorneys fee provision. Contractors should consult with Generate annual gross revenue of $25,000,000; or (1) consumers have the right to request disclosure of what data isaccuracy of a construction lien by any action in district court mustcounsel before contracting for work in North Dakota to make being collected about them; and (2) consumers have the right tobe awarded the full amount of all costs and reasonable attorneyssure they have adequate protection against non-payment in the Alone, or in combination, annually buy, receive, sell, orrequest that their information be deleted. Companies should befees incurred by the owner. N.D.C.C.35-27-24.1 (emphasiscontract. Contractors should also work with a knowledgeable share the personal information of 50,000 or moreready to respond to such requests immediately. The law requiresadded). This one-sided attorneys fees provision makes it risky forattorney as soon as non-payment becomes an issue on a project.consumers (that are California residents), households, orthat a company respond to requests for information or deletioncontractors to invoke the construction lien remedy.Jeffrey A. Wieland practices in our Construction Law and devices for commercial purposes; or within 45 days (with one 45-day extension). Litigation groups. He has a B.S. in Engineering Physics and A 2012 North Dakota Supreme Court case demonstrates thea Masters degree in Mechanical Engineering. He spent 15 Notably, a company must only respond to a verifiable consumerdanger the attorneys fees provision poses to contractors. Inyears working as an engineer and project manager before Derive 50% or more of their annual revenue from sellingbecoming a lawyer. He is licensed in the state and federal consumers personal information. request. Thus, it is crucial that a company be able to verify theNorthern Excavating Co., Inc. v. Sisters of Mary of the Presentationcourts in Minnesota and North Dakota where he typically consumers identity before responding. Further, companies areLong Term Care, 815 N.W.2d 280 (N.D. 2012), an excavationrepresents contractors, subcontractors, suppliers, and owners.There is a common misconception that a company is exempt fromexempt from responding to a verifiable consumer request tocontractor worked for an owner on a time and materials contract.612-877-5261|Jeff.Wieland@lawmoss.comcomplying with the CCPA if it complies with other federal privacythe extent that it requests: LawMoss.com/people-jeffrey-a-wielandlaws, such as the Gramm-Leach-Biley Act (GLBA) or the Health Insurance Portability and Accountability Act (HIPAA). This is not"CCPA Compliance" Continued on Page 7 "CCPA Compliance" Continued from Page 6entirely accurate.Data needed to complete a transaction; Every company doing business in California should immediately Many categories of consumer information typically collected byimplement a strategy for responding to such consumer requests companies (such as biometric data, geographic data, and internetMichael T. Etmund practices in our Financial Services andData necessary to comply with legal obligations; and for disclosure or deletion in a matter that conforms to the law. activity information) are arguably not subject to GLBA and HIPAALitigation groups. He represents corporations and otherWhile individual review of each consumer request is required, if general business entities in matters involving defense of but likely fall within the purview of the CCPA. Further, manyconsumer protection statutes, compliance and regulatoryData used in a lawful manner that is compatible with theyour company anticipates response to consumer requests will companies are not subject to the GLBA or HIPAA but may beanalyses, and commercial collection. context in which the consumer provided the information. be identical, templates for responding to consumer requests in subject to the CCPA. Accordingly, complying with the CCPA would612-877-5309|Mike.Etmund@lawmoss.com writing, and scripting for responding to consumer requests by be the most efficient manner to service data on such accounts. LawMoss.com/people-michael-t-etmund phone, may be a prudent way to ensure consistency.6 7'