On January 17, the Russian Federation became the fourth party to the United Nations Convention on the Use of Electronic Communications in International Contracts, joining The Dominican Republic, Honduras, and Singapore. The Convention will take effect for Russia on August 1, 2014. It is intended to enhance legal certainty and commercial predictability where electronic communications are used in relation to international contracts, including by addressing, among other things, (i) the determination of a party’s location in an electronic environment; (ii) the time and place of dispatch and receipt of electronic communications; and (iii) the use of automated message systems for contract formation. The Convention builds on the fundamental legal principles and provisions contained in the UNCITRAL Model Law on Electronic Commerce by providing criteria for establishing functional equivalence between electronic communications and paper documents, as well as between electronic authentication methods and hand-written signatures. Fifteen other states have signed the Convention but have not yet ratified it.
On March 31, South Dakota enacted SB 68, becoming the 30th jurisdiction to adopt the Uniform Real Property Electronic Recording Act (URPERA) with the enactment. URPERA, promulgated by the Uniform Law Commission in 2004, gives county clerks and recorders the legal authority to prepare for electronic recording of real property instruments. Among other things, SB 68 (i) establishes that, for any law requiring that a document be an original as a condition for recording, an electronic document satisfying certain specific conditions will qualify; (ii) establishes an electronic recording commission to adopt uniform standards to implement procedures for recording electronic documents with the register of deeds; and (iii) requires the register of deeds to comply with standards set by the commission, including accepting electronic documents for recording. The law takes effect July 1, 2014.
On October 1, the Oregon Secretary of State published a final rule to implement numerous changes to the state’s notaries public regulations, including providing for electronic notarizations and electronic journals. The Secretary also released a summary of the changes. Notaries may notarize documents electronically after informing the Secretary of State of the format the notary will use by submitting notice via email, using the Electronic Notarization Notice form, along with an example of an electronic notarization. Any change to the way a notary conducts electronic notarizations—e.g. new vendor, new technology, changed appearance—requires a notary to provide notice of the change to the Secretary of State. A notary also may document an electronic notarization in either a paper or electronic journal, or both. The new rules took effect on September 1, 2013.
On September 18, the U.S. District Court for the Western District of Washington held that an employee’s computer, issued by the employer, is not a “facility” subject to protections of the Stored Communications Act. Roadlink Workforce Solutions, L.L.C. v. Malpass, No. 13-5459, 2013 WL 5274812 (W.D. Wash. Sept. 18, 2013). In this case, an employer sued a former employee for allegedly copying and then deleting certain information from an employer-issued computer before leaving to work for a competitor. The employer claimed a private right of action under the Stored Communications Act based on its allegation that the former employee intentionally exceeded his authorization to access a “facility through which an electronic communication service” it provided, and obtained and altered an electronic communication while it was in electronic storage. The court held that the employer-issued computer was not a facility through which an electronic communication service is provided, citing to previous decisions holding that including personal computing devices within the definition of “facility” would render other parts of the SCA illogical. The court reasoned that the plaintiff’s definition of facility would mean that any web site accessed on the computer would be a “user” of the communication service provided by the computer, and exempt from the SCA because of the exception for communications “of or intended for” that website. The court also held that the employer failed to demonstrate that the files accessed were in electronic storage because emails that have been opened but not deleted to not fit the SCA’s definition of “storage.” The court dismissed the employer’s SCA claim and a claim under the Computer Fraud and Abuse Act, but retained jurisdiction over certain state claims.
On April 30, North Dakota enacted HB 1136, which compels the Secretary of State to provide an electronic means for filing any record required to be filed under the state Uniform Commercial Code. The bill also, among other things, directs the Secretary to establish an electronic system and requires electronic filing to obtain or amend certain liens, including repairman’s liens and other non-mortgage liens. The changes become effective August 1, 2015. If the Secretary makes a report to the legislative management and to the information technology committee certifying that the electronic filing system is ready for implementation, these changes will become effective ninety days following the completion of the certificate requirement.
Recently, Connecticut finalized regulations to implement changes to the state’s Uniform Real Property Electronic Recording Act that allows town clerks to accept electronic documents for recording on the land records. Prior to implementation of these changes, town clerks could only accept paper documents for recording. While they may continue to accept paper documents, the regulation permits them to accept delivery of and return electronic documents for the purpose of recording those documents in the land records, consistent with other states. The regulation is also intended to ensure that the records and recordkeeping systems will be maintained properly and securely. The state also has published FAQs for town clerks regarding the new regulation.
The CFPB’s recent rule amending Regulation Z (TILA), issued on January 17, included, among other changes, the requirement that mortgage servicers provide consumers with periodic billing statements. As required by the Dodd-Frank Act, the rule explicitly allows electronic distribution of the statements. However, the Bureau restricted the use of electronic statements only to instances where “the consumer agrees.” In describing the process through which this agreement must be obtained, the rule departs from the formal requirements of the federal ESIGN Act’s consumer consent process, authorizing instead a “simpler process” which requires only the consumer’s “affirmative consent.” The CFPB staff, in the accompanying Official Interpretations, indicates that consent may be presumed for consumers who are currently receiving electronic account disclosures from their servicer for any type of account, mortgage or otherwise. In light of concerns about information security, the Official Interpretations also indicate that mortgage servicers may make electronic periodic statements available on a secure website and notify the consumer that the statement is available, rather than delivering the statement directly to the consumer. Recognizing that some consumers may not desire regular notification emails, the Official Interpretations also allow a consumer who has demonstrated the ability to access statements online to opt out of receiving such notifications. Neither the rule nor the Official Interpretations address how the rule relates to other laws that may affect when an electronic communication is delivered, such as the sending or receipt requirements of state UETA statutes.
Recently, the United Nations Commission on International Trade Law (UNCITRAL) published the Report of Working Group IV (Electronic Commerce), reflecting the group’s work during its forty-sixth session, held in late October and early November. The report describes the Working Group’s continued efforts to explore issues related to electronic transferable records and to address the need for an international regime to facilitate the cross-border use of such records. During this most recent session, the Working Group considered in detail the legal issues relating to the use of electronic transferrable records, and developed parameters for a set of rules to address those issues. Working Group members expressed broad support for a draft model law that would incorporate the parameters identified, while allowing for flexibility when addressing differences in national substantive laws. Some members also expressed support for the preparation of guidance texts, such as a legislative guide, and Working Group members discussed the possible consideration of a binding instrument, such as a treaty, to establish a legal framework for the cross-border transfer of electronic records. The Working Group will follow up on these issues during its forty-seventh session to be held in New York from May 13-17, 2013.
On August 24, the Office of Management and Budget and the Archivist of the United States issued a directive that requires all executive offices and federal agencies to eliminate paper and implement electronic recordkeeping for all records, regardless of security classification. The directive, which was required by a November 2011 Presidential Memorandum that outlined an effort to reform federal records management policies and practices, seeks to improve agencies’ compliance with federal records management statutes and regulations. The directive states that by the end of 2013, each agency must develop a plan to achieve electronic management of all permanent electronic records by the end of 2019. By the end of 2016, all agencies must manage email records in an electronic system that supports records management and litigation requirements. The National Archives and Records Administration will revise transfer guidance for permanent electronic records, issue new email management guidance, and support research in applied technologies to facilitate electronic records management. The Archivist will facilitate the initiative by leading a group of federal entities and private sector leaders in information technology, legal counsel, and records management to solve electronic records management challenges.