Making it tougher to sue for data breaches, help for rural health care considered by lawmakers

By Fred Knapp , Senior Reporter/Producer Nebraska Public Media

Feb. 11, 2025, 5 p.m. ·

The Nebraska Legislature meeting Tuesday. (Fred Knapp/Nebraska Public Media News) — The Nebraska Legislature meeting Tuesday (Photo by Fred Knapp, Nebraska Public Media News)

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It would be harder to sue companies for losing your data under a bill debated in the Legislature Tuesday. And a bill aimed at helping rural hospitals stay open got first-round approval.

The cybersecurity bill would prohibit consumers from filing class action lawsuits against companies for the unauthorized release of personal data except in cases of “willful, wanton or gross negligence.”

That’s a higher standard than ordinary negligence, like failing to pay attention. Sen. Robert Hallstrom, who introduced LB241, said companies that try to protect customers’ data but still get hacked need more protection.

Sen. Rob Clements supported the bill. Clements said his business, the American Exchange Bank in Elmwood, has had a harder time getting cybersecurity insurance. Clements says the bank has a “military grade” firewall that prevents even him from getting on popular sites like Facebook or Huskers.com when he’s in the bank, in an effort to keep customers’ data safe.

“Even though we're really trying hard, if we did have a breach, I think we could probably face a lawsuit in the millions of dollars, and it could shut down my business,” Clements said.

Hallstrom said most data breaches result in minimal financial loss for individual consumers, but huge expenses for businesses. He gave examples from several high-profile cases.

“Equifax involved a $380 million settlement, $2.58 was the per class member damages that were sustained, and the attorneys got $77.5 million. Yahoo, $117.5 million, damages of 61 cents per member, and the lawyers got $22,763,000,” Hallstrom said.

Sen. Terrell McKinney wasn’t buying it:

“So the argument that, ‘Oh, there's no money attached to this,’ but if my Social Security and my information is floating across the internet, across the dark web, somebody should be held accountable,” McKinney said. "So if these corporations, or if these companies or private entities are negligent, they should be held accountable for these cybersecurity events."

And Sen. Megan Hunt said Hallstrom’s bill is an example of a trend that’s going in the wrong direction.

“It's not that corporations are evil and bad, but it's that they need to have accountability," Hunt said. "And this push to weaken accountability for corporations isn't just happening in Nebraska, it's part of a broader national effort to roll back consumer rights."

Lawmakers adjourned for the day before reaching a first-round vote on the cybersecurity bill.

However, they did advance another measure, LB527, whose sponsor called important for helping keep rural hospitals open.

Sen. Mike Jacobson said one problem is that Medicaid isn’t paying health care providers enough to cover their costs to treat patients, reducing the number of people being treated at rural hospitals.

“I think what you're finding right now is they're not seeing a number of Medicaid patients because the reimbursements are so low. So what this would do is raise those reimbursements to a point where they will actually see them,” Jacobson told his colleagues.

Jacobson’s bill, LB541, would impose a 6% tax on the premiums paid to health maintenance organizations, which would then be used to leverage additional federal dollars and used to pay Medicaid expenses. The tax is expected to raise nearly $250 million a year. It got first-round approval on a vote of 39-0.

And Tuesday afternoon, the Education Committee heard a proposal, LB408, to forgive tuition loans for students who become special education teachers. Sen. George Dungan called the current shortage a crisis.

“We need more teachers, period. But we absolutely need more special education teachers, and we need them yesterday,” Dungan said.

He said a 2024 survey by the Nebraska Department of Education found special ed vacancies accounted for 150 of the 669 vacant teacher positions in the state last year.

He acknowledged a “fiscal note” – legislative-speak for how much the proposal could cost – of $500,000 at a time when the state faces a projected budget shortfall of $432 million. But he called that cost “minimal” compared to the need.

“I know that we find ourselves in a very precarious financial situation this session…and I am sympathetic to the fact that we have to ensure we're being fiscally responsible,” Dungan said. "But when we look at fiscal notes, we always have to look at the return on investment. We always have to look at, if we invest this money upstream, what money does that save us downstream?"

If the committee advances the proposal, bills that cost money will have to wait in line until after senators act on the main state budget, which is supposed to be passed by mid-May.