March 12, 2013 5:27pm PT by Eriq Gardner
What Beyonce, Ashton Kutcher and Stars Can Do About Hacked Financial Data (Analysis)
It was recently revealed that Hollywood celebrities had experienced a hack attack. One website published credit reports, mortgage payments, Social Security numbers and more for Jay-Z, Beyonce, Ashton Kutcher, Mel Gibson, Kim Kardashian and Paris Hilton, as well as Washington, D.C., figures like vice president Joe Biden and FBI director Robert Mueller.
The FBI continues to investigate what happened, and if the authorities can show an illegal trespass into computer networks, there isn't much question about the illegality of those acts.
However, the issue of liability for those publishing the information is something else to consider. This extends not only to the website that first published the information -- which may or may not have been part of a conspiracy to steal the financial data -- but also to all those other websites and news publications that might use the information to reveal which stars have low credit scores and which celebrities are late on mortgage payments.
The Hollywood Reporter has spoken to legal experts on this topic. Most agree that there's a great hole in the law when it comes to shielding such private information. But that doesn't mean that stars don't have any options on the table.
First things first. It's pretty much a consensus that state and federal privacy acts have been outrun by the web.
Peter Toren, a former Justice Department lawyer and now a computer-crimes attorney at Weisbrod Matteis & Copley, points to the Electronic Communications Privacy Act, which protects certain forms of electronic correspondence but was enacted in 1986 and hasn't been amended since.
"The statutes don't provide for protection on the publication of data that was obtained by legal methods," he says. "If you can't charge conspiracy, you have a problem. I've been talking about the increased need to update the law for some time."
Few legal observers believe there's much liability for publishing sensitive financial data -- there are pretty good First Amendment defenses here -- although Aaron Liskin, an attorney at Kinsella Weitzman, thinks that publishers might run into trouble if they publish the most sensitive of data. He believes there could potentially be charges of aiding and abetting an identity thief. Still, the prospect seems remote. Liskin analogizes the situation to the appearance of nude photographs online. Celebrities have struggled with figuring out how to control circulation of these images; typically, the best they can do is to mitigate the damage.
There might be some possibilities here.
Right now, the primary attention is being focused on how the FBI responds to the hacking. But don't ignore the credit agencies. From what we've seen of the website that published the hacked data, the publishers have done things like post Beyonce's TransUnion report.
"I'm sure that [TransUnion] would claim that their data is proprietary," says Toren. "They are the ones compiling the data."
Although credit agencies are notoriously impossible to deal with, a hacked celebrity does have a potential stick at their disposal -- a negligence lawsuit against the agency. Toren says a celebrity "would have the argument that on the data that was illegally obtained, the agency didn't take reasonable steps to safeguard that information."
Liskin thinks that it would be difficult to prevail in such a lawsuit because of the sophistication of the hackers. He suggests that celebrities might do better asserting possible defamation claims against those republishing information.
"If it's all true, that's one thing," he says. "But, if not, publishing that kind of information could be libelous."
Specifically, claiming someone is a deadbeat on their finances might be cause for a stern legal warning. After all, although the financial information is out there, probably being passed around on Twitter and Facebook, there's hardly any way for third parties to verify its authenticity.
All that being said, the options that stars have in erasing the sting of the hack are limited. Says Toren: "The genie is out. Those who are industrious might be able to limit the damage, but right now, that's about all they can do."