Learn more about the APRA and why the sweeping privacy legislation could leave Main Street businesses vulnerable to lawsuits.
Small retailers are taking notice of the potential negative impacts of the proposed American Privacy Rights Act. Being sold as a solution to protect Americans’ privacy rights, the APRA includes a damaging private right of action provision that instead targets Main Street businesses and could leave them exposed to “drive-by lawsuits” for alleged privacy violations, including by their service providers, over which they have no direct control.
As Congress considers the APRA, here’s what several Main Street retailers want Congress to know about their concerns with the bill’s inclusion of the private right of action.
Small businesses often sign “take-it-or-leave-it” contracts for necessary services like website development, internet services or marketing, and have no real control over how their vendors conduct business. As a result, when these service providers face investigations for security breaches and privacy violations, the retail businesses using them could be sued under the APRA for not exercising “reasonable care” in selecting their service providers.
“Small businesses need the private right of action removed from the APRA,” says Alex Habeeb, owner of Taco John’s in Bourbonnais, Ill. He’s concerned that the APRA would be taken advantage of by trial lawyers to sue small businesses for privacy violations and security breaches of their service providers.
“When taken advantage of by attorneys, [the APRA’s private right of action] will negatively impact us,” Habeeb says. “It’s a domino effect from there.”
If the APRA is passed with a private right of action, Main Street businesses can expect to face the same aggressive litigation tactics from greedy and opportunistic trial lawyers as they have with alleged violations of the Americans with Disabilities Act.
After the ADA was enacted, Main Street faced a significant rise in lawsuits for alleged violations by trial lawyers targeting small and medium-sized businesses. These businesses are familiar with ADA requirements but have limited resources to defend themselves from these lawsuits even when the claims are baseless.
“We have been sued for lack of ADA parking access,” says Kirsten Recce, founder and president of lighting retailer Black Whale Home in Carlsbad, Calif. She says a trial lawyer targeted her business looking for a fast payout. “They never even attempted to enter my store and could have done so easily,” she says. “That was not his goal. He was looking for settlements.”
When small businesses are hit with predatory lawsuits, it can be costly to defend themselves, straining resources and potentially leading to lost jobs or higher consumer prices.
“Small businesses don’t have the resources to fight these attorneys who are manipulating the law,” says Rachel Levy, COO of Brooklinen, a New York-based bedding retailer.
Gordon Lugauer, owner of Board Game Barrister, a game retailer in Milwaukee, Wis., echoes Levy’s concern. “In 2023 we had to spend a manager’s salary on legal fees defending a shakedown ADA lawsuit,” he says. While he respects the APRA’s goal to protect Americans’ privacy rights, Lugauer wants to make sure Congress knows of the unintended consequences, including the economic consequences.
“I’m all for privacy,” he says, “but subjecting small businesses to be sued for things they have neither control nor guidance over is unfair.”
Join NRF in calling on Congress to protect Main Street businesses from “drive-by” lawsuits by removing the private right of action in the APRA. Send a message today through our grassroots campaign.
