Defining Data Privacy Principles for Autonomous and Connected Vehicles

This is the third part in a series of advisories on data privacy best practices for autonomous and connected vehicles. To read previous advisories in this series, please visit: Best Practices and Documenting Collected Data.

In 2014, leading automakers adopted the Consumer Privacy Protection Principles for vehicle technology and services. These Principles were reviewed again in 2018. Led by the Alliance for Automotive Innovation (Auto Innovators), these Consumer Privacy Protection Principles currently define privacy principles for vehicle technologies and services including:

  • Voluntary disclosure of the types of data being collected and how the data will be used and shared
  • Multiple points of disclosure including in-vehicle displays, web-based registration portals and owner’s manuals
  • Ability for consumers to review privacy policies prior to purchase
  • Opportunity for consumers to grant permission for their data to be used for third-party marketing

Despite the time-lapse since the Principles’ initial adoption and their applicability to conventional vehicles they, along with industry best practices and current regulatory requirements, can nonetheless be a useful reference for autonomous vehicle companies. In-house counsel at autonomous vehicle companies should ask the following questions to help construct effective data protection and privacy policies that ensure their company’s technologies manage access to identifying data:

  • Where possible, can internal and external access to this data be restricted to the technologies required to perform a specific service?
  • Where should the technology use persistent versus randomly assigned identifiers?
  • Can the data be anonymized or de-identified?
  • What degree of control can customers have over what data is collected, stored or shared?
  • When it’s time to transfer ownership, which user data should be deleted, as it may be on other personal devices like a laptop?

Read the complete series Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles:

Varnum’s Mobility Practice has helped leading autonomous vehicle companies craft their data privacy policies. How robust is your plan? Schedule a meeting with our mobility data privacy and security attorneys.

Request a Meeting

California Privacy Protection Agency Holds Pre-Rulemaking Stakeholder Sessions

The California Privacy Protection Agency (CPPA) in charge of implementing and enforcing the California Privacy Rights Act (CPRA) and California Consumer Privacy Act (CCPA) held a series of pre-rulemaking stakeholder sessions over three days last week. Executive Director of the Agency, Ashkan Soltani, opened the sessions on Wednesday, May 4, welcoming those in attendance which included Professor Jennifer Urban, Chair of the Agency. Urban was appointed Chair of the five-person CPPA Board by California Governor Gavin Newsom in March 2021.  

These stakeholder sessions were the third of the Agency’s pre-rulemaking activities. The first activity was an invitation for written comment. The second was a set of pre-rulemaking informational sessions. Speakers for the informational sessions included academics who study relevant topics and officials from the Office of the California Attorney General, the CPPA and the European Data Protection Board.

For this third pre-rulemaking activity, Agency staff and its Board were in “listening mode” as a variety of interested individuals provided verbal comments and suggestions regarding implementing and improving the laws. Commenters included businesses with experience implementing the CCPA, consumers who have exercised their rights under the law, public policy groups and several industry associations.

  • Automotive industry stakeholders raised the need for limits to consumers’ ability to opt out of personal data collected by their vehicle, citing vehicle system safety concerns. They questioned whether a consumer’s right to correct data generated by vehicle components and sensors could be effectively exercised and proposed limiting data that can be corrected to personal data provided by the consumer directly to the business.
  • Businesses acknowledged their desire to comply with the CCPA, while at the same time expressed frustration with the time and cost involved in implementing provisions of the law that seem likely to change.
  • Stakeholders raised concerns around the broad definition of “sale” under the CCPA and CPRA, as well as the need for further guidance on how the Agency and CA Attorney General intend to enforce provisions related to the sale of personal data.

The California Privacy Protection Agency has full administrative power, authority and jurisdiction to implement and enforce the CPRA and California Consumer Privacy Act. The Agency has the power to bring enforcement actions of these laws before an administrative judge, while the California Attorney General holds civil enforcement authority over the laws. This agency is the first in the country dedicated to the protection of data privacy rights.

Agendas, materials and recordings of Agency pre-rulemaking activities can be found on the California Privacy Protection Agency website.

What You Need to Know Before Contracting with the Federal Government

Making the decision to engage your business in government contracting at the local, state or national level can admittedly be overwhelming, particularly for those new to the process. However, the potential benefits should outweigh the hesitations. According to an American Express OPEN survey, 57 percent of businesses noted their revenue grew significantly because of government contracting, at an average rate of 61 percent. This advisory provides a high-level overview of the process with a focus on federal government contracting, which is far and away the largest source of government contracting.

United States federal government contracting is an enormous business both nationwide and internationally, with total contract spending value in the hundreds of billions annually. In fact, the U.S. government is the single largest procurer of goods and services in the world. While the Department of Defense (DOD) accounts for most of the federal service and product acquisitions, there are myriad industries that are engaged in contracting with the U.S. government, providing products and services that range from paper clips to missile defense systems. Nevertheless, to take part in this seemingly endless source of opportunity, your business will want to make sure it is well-prepared prior to embarking.

Complete Regulatory Basics

Any business legitimately (and legally) capable of doing business with the federal government must have a few basic regulatory tasks initially completed. To start, the government requires any potential contractor register its business with Dun & Bradstreet (D&B) and the System for Award Management (SAM). 

The D&B system utilizes a nine-digit unique identifier number to manage a company’s credit profile so lenders and potential customers or business partners can better ascertain a company’s reliability and financial stability.

The SAM is the government’s central registration repository for all businesses, both large and small. However, before a business begins completing the D&B or SAM registrations, a business needs to be aware of its North American Industrial Classification System (NAICS) code. The purpose of the NAICS is to provide the government with a uniform method of classifying its purchases so it can track spending for reporting, funding and budgeting. Prior to tendering a bid or proposal, a prospective contractor must register with the SAM.

Broadly speaking, the SAM will require a contractor to:

  • Register under the company’s Data Universal Numbering System (DUNS) number;
  • List the NAICS Code applicable to the type of work the contractor performs;
  • Complete representations and certifications contained in the Federal Acquisition Regulation (FAR);
  • Identify the contractor’s bank account; and
  • Provide background information regarding the contractor. 

Notably, a company’s information included on the SAM must be updated annually or when previously provided information deviates.

Furthermore, any contracts awarded by the federal government must first be approved by the federal government’s Contracting Officer (CO). A CO will only approve, in its discretion, what it determines to be responsible contractors. Specifically, the government will not enter into a contract with any business that:

  • owes back taxes
  • has a current or pending legal judgment with the government
  • does not have a checking account
  • is on the government’s excluded parties list
  • hasn’t completed the basic regulatory requirements for doing business with the government

Before moving on to the next step, potential contractors will want to ensure they have completed the above-mentioned registrations and completed a self-diagnostic on their business to identify and address any potential hindrances, including those listed above, that may currently exist.

 Finding an Opportunity

The process for seeking business from the federal government is largely comparable to the process of obtaining business in the private sector. As in the private sector, marketing a service or product to the government depends on identifying relevant markets and potential government customers suited to your businesses capabilities.

In the realm of federal government contracting, there are numerous sources available to help pinpoint opportunities suited for your business. Below are some of the main portals of entry into federal government contracting opportunities.

GSA Schedule
Obtaining a General Services Administration (GSA) schedule contract is perhaps the most common form of federal government contract. The GSA is the “acquisition arm” of the federal government, playing a key role in connecting the private sector with the relevant federal agency seeking a fulfillment need. Any person/entity interested in selling their products and services to the federal government should prepare by making sure they have satisfied the applicable requirements and registering in the appropriate systems. Any prospective vendor who wishes to be included on a GSA Schedule can find more information here. The primary contract vehicle is the GSA Schedules, or Multiple Award Schedules, program. Additionally, any prospective vendor should develop a sales and marketing strategy for how that vendor will be targeting specific government contracts.

To be eligible for a GSA Schedule contract, a vendor must have been in business for at least two years and be able to provide two years’ worth of financial statements. In this regard, a company must be able to demonstrate it has measurable past performance. If a company does not have previous federal contracting experience, it may use federal and non-federal references from six or more previous customers, in part to obtain a past performance and evaluation Open Ratings report through Dun & Bradstreet.

FedBizOpps
Federal Business Opportunities (FedBizOpps) is a point of entry for business to seek out federal government contracting opportunities with a value of over $25,000.

GWACs
The federal government is a massive purchaser of hardware, software and related services through Governmentwide Acquisition Contracts (GWAC).

Subcontracting
Another way to get involved in federal government contracting, albeit indirectly, is to serve as a subcontractor for a company that has been awarded a government contract (known as the “prime contractor”). Agencies may provide information on their websites about firms to which they have awarded contracts. As an example, the GSA and SBA maintain subcontracting directories and databases. Subnet is another database of subcontracting opportunities. Other potentially useful sources of information include trade and business publications, the SAM website, company websites, and the Federal Procurement Data System (FPDS). Information obtained from these resources might indicate which companies have received, or plan to receive, government contracts.

One note before moving ahead: take the time to thoroughly research a potential contract opportunity and plan your “elevator pitch” and capability statement for said opportunity before making an offer. It will pay off in the long run.

 Offering on a Contract

After you have completed the necessary registrations and found an opportunity that fits your business, you are ready to jump into the offer pool. There are two types of offers when it comes to government contracts – bids and proposals. Bids are generally used in sealed bidding purchases, while proposals usually involve contract awards to be made following a negotiation process. Three of the main offer types are briefly described below:

  • Request for Quotation (RFQ): An RFQ is generally used for proposed contracts with a value of less than $150,000. The benefit is that this method is usually relatively simple and focuses mainly on price and delivery capabilities.
  • Request for Proposal (RFP): Typically for acquisitions sought with larger values than an RFQ, a potential contractor will be required to provide additional details about how they would be able to complete a specific project or develop a specific product.
  • Invitation for Bid (IFB): In a similar vein to an RFP, an IFB is generally used for projects with a value of over $100,000. Potential contractors submit a sealed solicitation/bid for government procurement. This process typically does not involve any outside negotiation between a potential contractor and the government vendor seeking the acquisition.

It is crucial that the information provided in an offer (whether it is for an RFQ, RFP, IFB, or otherwise) is factually sound and inclusive of any pertinent material a CO would need to make its evaluation. A company will want to provide as much information as possible without overwhelming the CO. However, make sure not to overpromise on any proposal, particularly related to technical specifications (if required), as this will become part of the contract in the event your proposal is selected.

 Submit an Offer

Once you have identified an opportunity, double-checked everything included in your bid and/or proposal and have satisfied all the rules for the submission process, you are ready to submit your offer. As a parting word of advice, do not make the mistake of assuming offering the lowest price is the key to winning a government contract. A company’s experience and history of providing excellent service in its respected field is as important, if not more important, than the actual offer value.

The evaluation and award process begin when a government procurer receives bids/offers. This process can vary greatly regarding timing (often between 30 and 120 days) and ultimate acceptance of a bid. Stay patient, be prepared to provide any necessary follow-up information, keep in regular contact with the assigned CO (without being too pushy), and continue to set your business up for success should your offer be accepted.

The information provided in this advisory is a starting point to prepare your business for contracting with the federal government. If you have made the decision to move forward with engaging in federal government contracting opportunities or are considering it, please direct questions or concerns to a Varnum attorney for further discussion.

Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles: Documenting Collected Data

This is the second part in a series of advisories on data privacy best practices for autonomous and connected vehicles. To read the first advisory, please visit Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles: Best Practices.

Autonomous vehicles require a vast amount of data to operate safely, some of which could answer questions like:

  • Where is the car right now, and what direction is it heading?
  • What other vehicles, landmarks or pedestrians are nearby?

This data may be grouped by type (sensor, image) and category (location, driving).

Sensor and Image Data

  • A myriad of sensors, cameras and radars collect external environment data ranging from traffic and road conditions to surrounding geographies and points of interest. 
  • While this type of data helps the autonomous vehicle stay safe relative to other cars, pedestrians and transportation users (like cyclists) on the road, the technology may also capture images of people or events that occurred outside the vehicle.

Location and Driving Data

  • Knowing a vehicle’s location is crucial for the safe operation of an autonomous car and its passengers but could pose privacy concerns that vary depending on whether the autonomous vehicle is utilized in a transportation service or as an owned vehicle. 
  • Individual trips route information and other types of location information combined with elements such as time that may be personally sensitive to the driver.

These data sets, if not handled properly, may be used to identify riders from where they work to preferred places to shop and frequent places they visit. Moreover, whereas all this collected data reveals privacy considerations for riders and passengers, sensor and image data in particular may raise privacy concerns for individuals outside the vehicle.

Law enforcement may also seek access to this data in relation to investigating a civil or criminal matter, further complicating the desire for consumer privacy.

Varnum’s Mobility Team recommends documenting what data is collected, how it flows into and through the technology stack and, when it leaves the system, where it goes. This information can inform in-house counsel on the creation of data privacy policies that balance the need for successful automation, while protecting personal privacy and meeting compliance standards.

Read the complete series Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles:

Varnum’s Mobility Practice has helped leading autonomous vehicle companies craft their data privacy policies. How robust is your plan? Schedule a meeting with our mobility data privacy and security attorneys.

Request a Meeting

Best practices for property owners negotiating cell tower leases

With more than four decades of combined experience representing property owners on cell tower leases, we’ve seen property values helped and harmed, terms that empowered or restricted, and deals that left the property owner pleased or later regretful. While the intricacies of cell tower leases should be left to professionals, we’ve assembled a shortlist of do’s and don’ts for property owners to keep in mind. The complete collection of our cell tower lease advisories can be viewed here.

    1. At present, your lease is worth approximately nineteen times annual revenue – conduct your business accordingly. Move slowly, act cautiously, do your homework and do not get scared or act out of fear based on what a salesperson or “lease consultant” may tell you.

    2. If you are going to sell property with a cell tower lease, sell the lease and future leasing rights before selling the property. The sale of the cell lease will add dollar for dollar to the revenue you would gain from selling the property. To put it simply, you’re leaving large amounts of money (see number one above) on the table if you sell the cell lease along with the property. 

    3. A related option is selling the property but keeping the cell lease. In addition to receiving rent, you maintain the ability to sell the lease in the future. While this is a good option, it is also tricky and should be navigated by an attorney with a successful track record. 

    4. Despite demands for you to do so, do not renew more than a year or so prior to lease expiration.  Warnings about the cell company leaving or refusing to upgrade are generally bogus, so wait it out. Rent offers go up substantially the closer you get to expiration.

    5. Most of the people contacting you about renewing or modifying your lease are paid on commission and thus will utilize high-pressure sales tactics to talk you into a decision you’ll regret. For example:
      • There are not too many cell towers in your area, and any threats that yours may go away are simply not true.
      • Cell phones are not going to be replaced by new technology because it doesn’t exist. Satellite technology is for countries and areas without cell service. 
        • Major carriers including AT&T and Verizon recently began rolling out 5G cell service. While sales representatives may tell you otherwise, this does not remove the need for existing cell towers. 

    6. When negotiating terms, try to require a lease amendment for any material change to a cell tower site. This is particularly important for antennas on buildings, so the building is protected. Each amendment may also lead to a rent increase, which is why cell companies try to strike such provisions and why you should keep them.

    7. You hold more of the cards in the lease renewal process than you think. In these circumstances, a cell company may threaten to take down a cell tower and move to a new location. Realistically, their whole network is built around having a cell tower at your location. Building a new one would come at a significant expense and would have to be nearby to avoid coverage gaps. Remember: if fear is what they’re selling, don’t buy.

    8. When amending or renewing a lease, pay attention to the fine print, as it is typically intended to help them and hurt you. Don’t be afraid to ask for the lease changes you want.

    9. In case it wasn’t clear in number eight, read the fine print. Do not sign leases or amendments stating the installation and area you are leasing will be determined after the lease is signed by a survey conducted solely by the cell company. You wouldn’t buy a house that way! The seller should have decision-making power.

    10. Strike rights of first refusal or greatly limit them. Because the person who will pay the most to buy a cell site is oftentimes the current tenant under the lease, do not let them buy on the cheap by matching the offer from what would have been the second highest bidder. If there is a right of first refusal, it should not apply to sales involving relatives, affiliates, trusts, estates and the like. 

Varnum represents clients nationwide on cell tower leases, including on the sale of over 100 cell leases. If you would like to discuss an initial cell lease or retention, sale or renewal of an existing lease, please contact John Pestle or Peter Schmidt.


John Pestle is a telecommunications attorney who, for decades, has represented property owners, including municipalities, on cell tower leases and sales. He is a graduate of Harvard, Yale and the University of Michigan Law School and held an FCC license to work on radio, TV and ship radar transmitters.

Pete Schmidt is a real estate attorney who has represented clients on numerous cell lease sales, including the Detroit Public Schools on the sale of approximately 24 leases. He is a graduate of Albion College and the University of Wisconsin Law School.

Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles: Best Practices

Autonomous and connected vehicles, and the data they collect, process and store, create high demands for strong data privacy and security policies. Accordingly, in-house counsel must define holistic data privacy best practices for consumer and B2B autonomous vehicles that balance compliance, safety, consumer protections and opportunities for commercial success against a patchwork of federal and state regulations.

Understanding key best practices related to the collection, use, storage and disposal of data will help in-house counsel frame balanced data privacy policies for autonomous vehicles and consumers. This is the inaugural article in our series on privacy policy best practices related to:

  1. Data collection
  2. Data privacy
  3. Data security
  4. Monetizing data

Autonomous and Connected Vehicles: Data Protection and Privacy Issues

The spirit of America is tightly intertwined with the concept of personal liberty, including freedom to jump in a car and go… wherever the road takes you. As the famous song claims, you can “get your kicks on Route 66.” But today you don’t just get your kicks. You also get terabytes of data on where you went, when you left and arrived, how fast you traveled to get there, and more.

Today’s connected and semi-autonomous vehicles are actively collecting 100x more data than a personal smartphone, precipitating a revolution that will drive changes not just to automotive manufacturing, but to our culture, economy, infrastructure, legal and regulatory landscapes.

As our cars are becoming computers, the volume and specificity of data collected continues to grow. The future is now. Or at least, very near. Global management consultant McKinsey estimates “full autonomy with Level 5 technology—operating anytime, anywhere” as soon as the next decade.

This near-term future isn’t only for consumer automobiles and ride-sharing robo taxis. B2B industries, including logistics and delivery, agriculture, mining, waste management and more are pursuing connected and autonomous vehicle deployments. 

In-house counsel must balance evolving regulations at the federal and state level, as well as consider cross-border and international regulations for global technologies. In the United States, the Federal Trade Commission (FTC) is the regulatory agency governing data privacy, alongside individual states that are developing their own regulations, with the California Consumer Privacy Act (CCPA) leading the way. Virginia and Colorado have new laws coming into effect in 2023, the California Privacy Rights Act comes into effect in 2023 as well, and a half dozen more states are expected to enact new privacy legislation in the near future. 

While federal and state regulations continue to evolve, mobility companies in the consumer and B2B mobility sectors need to make decisions today about their own data privacy and security policies in order to optimize compliance and consumer protection with opportunities for commercial success.

Understanding Types of Connected and Autonomous Vehicles

Autonomous, semi-autonomous, self-driving, connected and networked cars; in this developing category, these descriptions are often used interchangeably in leading business and industry publications. B2B International defines “connected vehicles (CVs) [as those that] use the latest technology to communicate with each other and the world around them” whereas “autonomous vehicles (AVs)… are capable of recognizing their environment via the use of on-board sensors and global positioning systems in order to navigate with little or no human input. Examples of autonomous vehicle technology already in action in many modern cars include self-parking and auto-collision avoidance systems.”

But SAE International and the National Highway Traffic Safety Administration (NHTSA) go further, defining five levels of automation in self-driving cars.

Low
>>>>>
High
Human Monitors Driving Environment
AV Monitors

No Automation

The human driver does all the driving.

Assistance

Vehicle is controlled by the driver, but some driving assist features may be included.

Partial Automation

Vehicle has combined automated functions, like acceleration and steering, but the driver must remain engaged with the driving task and monitor the environment at all times.

Conditional Automation

Driver is a necessity, but is not required to monitor the environment. The driver must be ready to take control of the vehicle at all times with notice.

High Automation

The vehicle is capable of performing all driving functions under certain conditions. The driver may have the option to control the vehicle.

Full Automation

The vehicle is capable of performing all driving functions under all conditions. The driver may have the option to control the vehicle.

Level 3 and above autonomous driving is getting closer to reality every day because of an array of technologies, including: sensors, radar, sonar, lidar, biometrics, artificial intelligence and advanced computing power.

Approaching a Data Privacy Policy for Connected and Autonomous Vehicles

Because the mobility tech ecosystem is so dynamic, many companies, though well-intentioned, inadvertently start with insufficient data privacy and security policies for their autonomous vehicle technology. The focus for these early and second stage companies is on bringing a product to market and, when sales accelerate, there is an urgent need to ensure their data privacy policies are comprehensive and compliant.

Whether companies are drafting initial policies or revising existing ones, there are general data principles that can guide policy development across the lifecycle of data:

Collect
Use
Store
Dispose
Only collect the data you need
Only use data for the reason you informed the consumer
Ensure reasonable data security protections are in place
Dispose the data when it’s no longer needed

Additionally, for many companies, framing autonomous and connected vehicle data protection and privacy issues through a safety lens can help determine the optimal approach to constructing policies that support the goals of the business while satisfying federal and state regulations.

For example, a company that monitors driver alertness (critical for safety in today’s Level 2 AV environment) through biometrics is, by design, collecting data on each driver who uses the car. This scenario clearly supports vehicle and driver safety while at the same time implicates U.S. data privacy law.

In the emerging regulatory landscape, in-house counsel will continue to be challenged to balance safety and privacy. Biometrics will become even more prevalent in connection to identification and authentication, along with other driver-monitoring technologies for all connected and autonomous vehicles, but particularly in relation to commercial fleet deployments.

Developing Best Practices for Data Privacy Policies

In-house counsel at autonomous vehicle companies are responsible for constructing their company’s data privacy and security policies. Best practices should be set around:

  • What data to collect and when
  • How collected data will be used
  • How to store collected data securely
  • Data ownership and monetization

Today, the CCPA sets the standard for rigorous consumer protections related to data ownership and privacy. However, in this evolving space, counsel will need to monitor and adjust their company’s practices and policies to comply with new regulations as they continue to develop in the U.S. and countries around the world.

Keeping best practices related to the collection, use, storage and disposal of data in mind will help in-house counsel construct policies that balance consumer protections with safety and the commercial goals of their organizations.

A parting consideration may be opportunistic, if extralegal: companies that choose to advocate strongly for customer protections may be afforded a powerful, positive opportunity to position themselves as responsible corporate citizens.

Read the complete series Navigating the Data Privacy Landscape for Autonomous and Connected Vehicles:

Varnum’s Mobility Practice Team has helped leading autonomous vehicle companies craft their data privacy policies. How robust is your plan? Schedule a meeting with our mobility data privacy and security attorneys.

Request a Meeting

Setting the Record Straight on Recording Conversations: Is Michigan a “One-Party Consent” State?

If you’ve ever resorted to Google to investigate whether the law allows you to record a conversation perhaps that’s why you’re here now), you’ve probably come across the notion of “two-party consent” and “one-party consent” states. While most states fall neatly into one of these categories, Michigan is not (technically) one of them.


Two-Party and One-Party Consent States

Many states only permit the recording of a conversation if all participants give their consent. Those states often earn the moniker of two-party consent or all-party consent states. For example, California is a two-party consent state. California Penal Code § 632 provides (emphasis added):

“A person who, intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication, whether the communication is carried on among the parties in the presence of one another or by means of a telegraph, telephone, or other device, except a radio, shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500) per violation, or imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment.”

Other states, known as one-party consent states, allow recordings if just one person consents. For example, Ohio’s statute (Ohio Revised Code § 2933.52) prohibits using a device to intercept a communication but provides several exceptions including that it does not apply to “[a] person who… who intercepts a wire, oral, or electronic communication, if the person is a party to the communication or if one of the parties to the communication has given the person prior consent to the interception… .” See O.R.C. § 2933.52(B)(1).


Neither Glove Fits Michigan

We’ve written before that under Michigan’s eavesdropping statute, a person can record their own conversations without obtaining the consent of all other participants (sometimes dubbed the “participant exception” to the eavesdropping statute.) In effect, a person in Michigan can record their own conversations with the consent of only one person: themselves. Does that make Michigan a one-party consent state?

While it may be a convenient shorthand to think of Michigan as a one-party consent state, that is not literally true. Michigan does not permit just anyone to record conversations so long as they have the permission of any one person involved in the conversation. Only the participant themselves may record their own conversations with their own consent.

Michigan’s statue says, in pertinent part:

“Any person who is present or who is not present during a private conversation and who willfully uses any device to eavesdrop upon the conversation without the consent of all parties thereto, or who knowingly aids, employs or procures another person to do the same in violation of this section, is guilty of a felony… .” [MCL § 750.539c]. 

Note that unlike Ohio’s statute, Michigan’s statute does not create an explicit exemption for situations where “one of the parties to the communication has given the person prior consent to the interception.” See O.R.C. § 2933.52(B)(1).

Indeed, Michigan’s statute is drafted much more similarly to California’s; both states explicitly require the “consent of all parties” to the conversation. See MCL 750.539c (requiring “consent of all parties”); Cal Penal Code § 632 (requiring “consent of all parties”).


Michigan’s Rule is Exceptional

But if Michigan’s statute requires consent of all parties just like California, why isn’t Michigan a two-party consent state?

Michigan’s exception for participants arises from an unassuming phrase – “the private discourse of others” – appearing in the statutory definition of the word eavesdropping, located in a separate section of the statute. MCL 750.539a(2). The Michigan Court of Appeals determined this reference to the conversations of others meant the eavesdropping statute could not apply to one’s own conversations. Sullivan v. Gray, 117 Mich. App. 476, 481, 324 N.W.2d 58, 60 (1982).

As highlighted in a prior advisory, a small minority of courts have disagreed that the phrase “private discourse of others” creates an exception for conversation participants, and that interpretation certainly has some intuitive appeal: if the Michigan legislature really wanted to create an exception for participants, it could have done so very explicitly and directly (like Ohio), rather than requiring the consent of all parties (like California) and burying such a massive exception in a seemingly innocuous phrase in the definitions section. To our knowledge as of this writing, the only notable recent case to reject the participant exception has reconsidered and reversed its prior ruling, and there is no longer any persuasive authority to suggest that Michigan does not recognize a participant exception.

If you need a shorthand for remembering Michigan’s rule, I suggest latching onto “participant exception.” Michigan is a two-party consent state, with an exception for recordings by conversation participants. The exception nearly swallows the rule, but it would be a mistake to believe a person could legally record a conversation in Michigan just because they were given permission by one of the participants to the conversation. If you have any concerns about the legality of your recording activities, don’t rely on a shorthand or Google; consult with a lawyer who can consider the specific facts of your case, as well as other relevant legal issues.

Florida Homestead Exemption: What You Need to Apply

Our knowledge of sophisticated tax and planning techniques permits us to offer a broad range of services. At Varnum, our Estate Planning Practice Team works continuously to ensure you have an opportunity to explore the most creative and effective techniques in use today to achieve your vision.

If you elect to purchase and occupy a personal residence in Florida, as opposed to renting, you may also qualify to establish Florida residency and claim the Florida homestead exemption. In the Sunshine State, the homestead exemption provides two annual financial benefits:

  1. It reduces the home’s assessed value of property taxes by $50,000, so a home that is worth $500,000 would be taxed as though it is worth only $450,000. It is important to note $25,000 of homestead coverage does not apply to the school portion of property taxes.
  2. It limits increases in the assessed value of a home to the lesser of three percent or CPI. Further, even if you move and change homesteads in Florida, much (if not all) of the accumulated savings can be transferred to your next Florida homestead. Thus, in an attractive and appreciating housing market, your property taxes may be significantly mitigated over time compared to the housing market. 

There are additional benefits available to taxpayers over age 65; however, most apply only to taxpayers with very limited income.

How to Apply For Homestead Exemption

Possibly the most significant homestead benefit is that creditors, in most cases, may not access the homestead for debts. This is true even at death. Combining the foregoing financial benefits with this creditor protection, Florida homestead can be an immensely valuable benefit for Florida residents.

Claiming a Florida homestead exemption involves some very specific requirements that must be completed within a specified time frame and which, of necessity, must be completed in a certain order. Florida law requires a homeowner to own and occupy the residence as of January 1 of the year in which the application is made, although the application may be filed as late as March 1. The forms are available from each County’s Property Appraiser’s Office and may also be found on the internet. When applying, the homeowner must present the following:

  • A valid Florida driver’s license or state ID card. If you’re planning to claim a homestead exemption, you must first apply for a Florida driver’s license. A Florida ID Card may be used in lieu of a driver’s license if the homeowner does not have a driver’s license. Florida will recognize a Michigan driver’s license as justification for issuing a new Florida driver’s license without an exam or road test, often for a much longer time than the remaining duration of the Michigan license. However, Florida has extensive identification requirements including (1) primary identification (e.g. a certified copy of a birth certificate or a valid passport), (2) proof of a Social Security Number, and (3) proof of the residential address. You should carefully review the requirements on the Florida Highway Safety and Motor Vehicles website.

  • Either a valid voter’s registration or a Declaration of Domicile reflecting the homeowner’s Florida address. If the homeowner is planning to register to vote in Florida, which is recommended, this again requires some advance planning. Registration can be accomplished online. Note that Florida requires new residents apply for a driver’s license within 30 days of establishing residency and register vehicles (and obtain insurance) within 10 days of establishing residency, so filing a Declaration of Domicile will start these respective clocks. 

  • At least one of your automobiles must be registered in Florida. In order to register a vehicle in Florida, you must have insurance for that vehicle from a company doing business in Florida. In fact, it might be beneficial for you to register all your vehicles in Florida since insurance premiums in the state are typically much lower than premiums in Michigan. However, the first Florida license plate you obtain for each vehicle requires a hefty one-time payment of $250.

  • Proof of ownership of your property in the form of a copy of a tax bill or your deed. In many cases, particularly if you have owned the residence for a while and are applying for the homestead exemption online, the Appraiser’s office will have a record of your ownership of the property. If you hold the title in trust, you may be required to furnish a Certificate of Trust or certain relevant trust pages as well. If you hold title (or plan to hold title) in a trust, it may be necessary to amend the trust to include a homestead paragraph indicating the grantor and/or his or her spouse, if any, has/have the exclusive and continuous present right to full use, occupancy and possession of the homestead residence for life. Without this provision, a homestead exemption may be denied by certain assessors. Including certain language in deeds transferring a Florida residence into a trust may eliminate the need to later furnish a Certificate of Trust when applying for the homestead exemption. A Florida-licensed attorney should be consulted prior to vesting ownership of your real estate in trust to avoid any unnecessary complications.

  • Your application for exemption may be provisionally denied until you can furnish a form signed by the Assessor in any other county in which you own residential real estate – whether in Florida or Michigan – that you are not claiming a homestead exemption for that property. A copy of the request to rescind your Michigan principal residence exemption will not suffice since there is no proof that the municipality, in fact, rescinded the exemption.

Fortunately, once you’ve taken these steps, it shouldn’t be necessary to take them again. Just keep telling yourself “I’m doing this for a [tax saving] reason” as you slog through the bureaucracy.

Have questions? Our Estate Planning Practice Team includes several attorneys licensed to practice in Florida, as well as attorneys dually licensed in Michigan and Florida. Contact one of our Naples, Florida attorneys if you have questions about the Florida Homestead Exemption.

This advisory was originally published January 21, 2014. It has been updated to reflect current information as of April 1, 2022.