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.
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:
- Is unlawful;
- causes harm; and
- 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.