On August 25, 2014, Senate Bill No. 962, “[a]n act to add Section 22761 to the Business and Professions Code, relating to mobile communications devices,” was approved by Governor Brown and filed withSecretary of State Bowen. Introduced and authored primarily by Senator Mark Leno, S.B. 962 requires that “any smartphone… that is manufactured on or after July 1, 2015, and sold in California after that date, include a technological solution at the time of sale… that, once initiated and successfully communicated to the smartphone, can render inoperable the essential features… of the smartphone to an unauthorized user when the smartphone is not in the possession of an authorized user.”
In plain language, the new provisions of Section 22761 of the Business and Professions Code mandate that any smartphone manufactured on or after July 1, 2015, and sold in California after July 1, 2015, include an optional and reversible “kill switch” capable of rendering a smartphone’s essential features, i.e. voice communications, text messaging, internet browsing, and mobile software applications, inoperable. The law requires that an authorized user be able to choose to disable or opt-out of enabling the kill switch at any time, hence “optional,” and that cell phone functionality be restorable, in the event that the authorized user recovers the phone, hence “reversible.” The new law is the functional equivalent of a law requiring that all cars have a remote kill switch, like OnStar, or one requiring firearms to have a remote kill switch in order to deter their theft, either of which would likely be controversial.
Interestingly, the operative portion of the law is not directed at manufacturers, but rather at retailers. The force of the new law is that, per Section 22761(c), the knowing retail sale of a smartphone in violation of the law’s requirements may be punished by a civil penalty of at least $500 and at most $2,500 per smartphone sold in California in violation of the law. Section 22761(c) imposes the same penalties on the retail sale of a kill switch that can be hacked or circumvented by unauthorized users, “if, at the time of sale, the seller had received notification from the manufacturer or operating system provider that the vulnerability cannot be remedied by a software patch or other solution.” It will be interesting to see whether the doctrine of “constructive knowledge” will be a factor in Section 22761(c) enforcement actions, given that the law does not require that manufacturers give retailers writtennotification of either compliance or noncompliance with the new requirements.
The law has serious bite to it, since the minimum fine is greater than the average price of smartphones, while the maximum fine is far in excess of the prices of smartphones other than the kind you’d find at Tiffany’s. However, there are some limits to the applicability of the law, since Section 22761(c) expressly provides that “[t]here is no private right of action to enforce this subdivision.” So, who can enforce the law? Any suit to impose a civil penalty under Section 22761(c) must be brought by the Attorney General, a district attorney, or a city attorney.
Los Angeles Police Chief Charlie Beck and other law enforcement officials supported the law, in the hopes that the law could serve to quell a surge in often violent smartphone thefts. Others argue that the law is largely unnecessary and that, rather than protecting property and privacy, the law invites mischief. Another concern is that, as some have noted, “the new law’s influence will carry far beyond the state line.” Thus, the law will almost certainly be challenged as an unconstitutional intrusion intothe United States Congress’s power to regulate interstate commerce. We will have to wait until after July 1, 2015 to see if the constitutionality of the law is challenged as violating the Negative Commerce Clause, but it should not take more than a few enforcement actions to spur the challenge. With the potential application of old legal doctrines to new law and the likelihood of high stakes civil enforcement actions and eventual challenges of unconstitutionality, Section 22761 should prove exciting for lawyers, scholars, and policy wonks nationwide.