NE Legislature Passes Bill That Limits Ability to Sue Over Data Breaches

By Gordon HopkinsThe Nebraska Legislature passed LB (Legislative Bill) 241, a bill that limits liability in the event of a cybersecurity event on Wednesday, March 132, 2025. The bill would make it more difficult to bring a class action lawsuit against a private entity in possession of Personally Identifiable Information (PII), such as names, addresses social security numbers or other identification numbers, should a cybersecuity event compromise that data. The bill was introduced by Senator Robert Halstrom (District 1), in response to a “surge” in class action lawsuits.“Even with the existence of reasonable precautions,” said Senator Halstrom at a hearing on February. “The bad actors are always a step ahead of them.”Among the supporters of the bill was Senator Robert Clements (R-District 2), who said of the bank he heads, “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.”Data taken during cybersecurity events is often used for identity theft. Bad actors can then use those stolen IDs to open credit card accounts, racking up thousands in debt that could be passed on to the victim. That is just one possible scenario. It is this reason that Senator George Dungan III (D-District 26) opposed the bill, who noted the difficulty in making the distinction between negligence and willful negligence.“LB 241 provides a license to corporations large and small to act unreasonably, to act negligently,” said Senator Danielle Conrad (D-District 46), who also voted against the bill. “And to thus evade accountability through class action in state court.”Passage of this bill comes after a series of high-profile data breaches that can impact local residents, including PowerSchool, a software vendor that provides the Student Information System (SIS) for schools throughout the world, including several local schools, and Lee Enterprises, the newspaper chain that publishes several local newspapers. Change Healthcare, a division of UnitedHealth Group, also suffered major data breach in 2024. Nebraska Attorney General Mike Hilgers filed a major lawsuit in against Change Healthcare, alleging violations of Nebraska’s Consumer Protection and Data Security Laws.

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