Ben Cline Touts Don't Sell My DNA Act To Stop 23AndMe From Selling Off DNA Data Without Consent

Forbes Breaking News

During a House Judiciary Committee hearing in July, Rep. Ben Cline (R-VA) spoke about his Don't Sell My DNA Act which would prevent users of companies like 23AndMe from having their genetic data sold without their consent.

Transcript

00:00Thank you, Mr. Chairman. I want to thank you for holding this hearing to provide an overview of

00:03U.S. bankruptcy law and explore avenues for potential reform. I also want to welcome Judge

00:07Black from Western Virginia. It includes the 6th District. Judge Black's been a consistent

00:11leader in our part of Virginia, and I appreciate having his expertise here today. So I'll start

00:16with you, Judge. What benefits have you seen from the Small Business Reorganization Act,

00:22which was signed into law in 2019? I was proud to be the lead patron of that. What benefits have

00:27you seen for both debtors and creditors since the enactment of Subchapter 5? And do you think

00:31those benefits would extend? What do you think the impact would be if the $7.5 million cap

00:38were made permanent? Thank you. With the increase of the debt limit, it would make more small

00:48businesses eligible, not only in Southwest Virginia, but across the country. Because as I mentioned

00:53earlier, what may be a small business in Southwest Virginia may not equate to what may be a small

00:59business in Los Angeles or elsewhere, where they have higher debt loads. But the other thing is

01:04what I have seen in small business cases before me, and I've probably had 30 to 35 of those so far,

01:10is the speed with which they're able to get to confirmation and the less fighting and less

01:15wheel spinning. You know, I've seen some cases if they were in a traditional Chapter 11, they'd be on

01:22their third or fourth amended disclosure statement, and, you know, we'd be six or eight months into the

01:26case, and it's just not progressing. The presence of the Subchapter 5 trustee is helping keep the

01:35debtors and the creditors on the ball. A lot of these cases are two-party disputes, and if you can

01:40bring those parties together and try to eliminate some of the fighting that often goes on in Chapter 11

01:47cases, it keeps the case moving forward. And again, you've got to file a plan within 90 days after

01:54the petition date, absent some unusual circumstances. So really, when these cases are filed, debtors

02:01counsel has to be thinking about the plan before they file the case. And so it tends to move a lot

02:07faster. We have a higher confirmation rate, and for all of those reasons, I think it's been a great

02:13benefit. It's much less expensive. Chapter 11, with a traditional case, it's hard to put, you know,

02:18Bob's backhoe into the same reorganization scheme as Circuit City or General Motors. It's, you know,

02:25the absolute priority rule, the absence of that and the ability to get a case to confirmation quickly

02:30is a real benefit to small businesses. Nobody wants to be in bankruptcy.

02:34Thank you. I hope the committee can move forward on that issue. I want to shift gears a little bit.

02:40Our bankruptcy laws were not written with the biotech and consumer DNA era in mind,

02:45which is why I'm proud to join with the general lady from California, Congresswoman Lofgren,

02:50and others in my Senate colleagues in introducing the Don't Sell My DNA Act, which would explicitly

02:57amend the bankruptcy code to add genetic information to the definition of personally identifiable

03:01information, require written affirmative consent from individuals before their genetic data can be

03:06sold or transferred, and mandate the secure deletion of unsold genetic data. The bill responds

03:11directly to the recent bankruptcy filings by 23andMe and recognizes the genetic data, unlike a phone

03:17number or email address, is uniquely identifying and permanent, even without a name attached.

03:22So, Professor Jacoby, if I could ask, how does the bankruptcy system currently treat mass privacy-related

03:27claims, particularly those involving genetic data in terms of classification, priority, and valuation,

03:32and are breach victims essentially treated as unsecured tort creditors?

03:36Let me address your last question first. Yes, breach victims, those who experienced the major

03:43cybersecurity breach of 23andMe are treated as general creditors. And in the 23andMe bankruptcy,

03:50which the central feature of which was selling the company to a third party, although a related third

03:58party as it turns out, the breach claimants will have to turn to any proceeds left in the pot after

04:08higher priority creditors get paid. In terms of the broader question that you asked, I will welcome

04:15further specific questions, but I would say generally there is a real issue. It needs to be made more clear

04:25that applicable non-bankruptcy law must apply here in the bankruptcy context, but also should apply

04:32outside of the bankruptcy context. Those should be the same protections in both places. Given how

04:39difficult reputational and identity-related damages are to quantify, should Congress or the courts can

04:45reconsider how to account for these harms in bankruptcy proceedings, especially in light of the long-term

04:50consequences for consumers? Yes, and I think there is broader thinking to be done outside of bankruptcy

04:57in terms of some broader federal level protection. Thank you. Yield back.

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