New Jersey Privacy Law: Exceptions

New Jersey's privacy law (the "Act") application, definitions, and consumer rights were discussed in a May 2024 article. See "New Jersey Privacy Law: Application, Definitions, and Consumer Rights."

The Act's notice requirements, controller and processor responsibilities, security, controller-processor contracts, data protection assessments, de-identified data, and New Jersey attorney general enforcement were discussed in a May 2024 article. See "New Jersey Privacy Law: Notices, Controllers and Processors, and Enforcement."

This article discusses exceptions to the Act.

Nothing in the Act shall apply to the following.

• Protected health information collected by a covered entity or business associate subject to the privacy, security, and breach notification rules issued by the Department of Health and Human Services, Parts 160 and 164 of Title 45 of the Code of Federal Regulations, established pursuant to the Health Insurance Portability and Accountability Act of 1996, Pub.L.104-191, and the Health Information Technology for Economic and Clinical Health Act, 42 U.S.C. §§ 17921 et seq.;
• A financial institution, data, or an affiliate of a financial institution that is subject to Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801 et seq., and the rules and implementing regulations promulgated thereunder;
• The secondary market institutions identified in 15 U.S.C. § 6809(3)(D) and 12 C.F.R. § 1016.3(l)(3)(iii);
• An insurance institution subject to N.J. Stat. Ann. §§ 17:23A-1 et seq.;
• The sale of a consumer's personal data by the New Jersey Motor Vehicle Commission that is permitted by the Drivers' Privacy Protection Act of 1994, 18 U.S.C. §§ 2721 et seq.;
• Personal data collected, processed, sold, or disclosed by a consumer reporting agency, as defined in 15 U.S.C. § 1681a(f), if the collection, processing, sale, or disclosure of the personal data is limited, governed, and collected, maintained, disclosed, sold, communicated, or used only as authorized by the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq., and implementing regulations;
• Any state agency as defined in section 2 of N.J. Stat. Ann. §.52:13D-13, any political subdivision, and any division, board, bureau, office, commission, or other instrumentality created by a political subdivision; or
• Personal data that is collected, processed, or disclosed as part of research conducted in accordance with the Federal Policy for the protection of human subjects pursuant to 45 C.F.R. Part 46 or the protection of human subjects pursuant to 21 C.F.R. Parts 50 and 56.

Nothing in the Act shall be construed to restrict a controller's or processor's ability to do the following.

• Comply with federal or state law or regulations;
• Comply with a civil, criminal, or regulatory inquiry, investigation, subpoena, or summons by federal, state, municipal, or other governmental authorities;
• Cooperate with law enforcement agencies concerning conduct or activity that the controller or processor reasonably and in good faith believes may violate federal, state, or municipal ordinances or regulations;
• Investigate, establish, exercise, prepare for, or defend legal claims;
• Provide a product or service specifically requested by a consumer;
• Perform under a contract to which a consumer is a party, including fulfilling the terms of a written warranty;
• Take steps at the request of a consumer prior to entering into a contract;
• Take immediate steps to protect an interest that is essential for the life or physical safety of the consumer or another individual and where the processing cannot be manifestly based on another legal basis;
• Prevent, detect, protect against, or respond to security incidents, identity theft, fraud, harassment, malicious, or deceptive activities or any illegal activity; preserve the integrity or security of systems; or investigate, report, or prosecute those responsible for any such action;
• Engage in public or peer-reviewed scientific or statistical research in the public interest that adheres to all other applicable ethics and privacy laws and is approved, monitored, and governed by an institutional review board that determines, or similar independent oversight entities that determine, the following.
  • Whether the deletion of the information is likely to provide substantial benefits that do not exclusively accrue to the controller,
  • The expected benefits of the research outweigh the privacy risks, and
  • Whether the controller has implemented reasonable safeguards to mitigate privacy risks associated with research, including any risks associated with re-identification;

• Assist another controller, processor, or third party with any of the obligations under the Act; or
• Personal data for reasons of public interest in the area of public health, community health, or population health, but solely to the extent that such processing is all of the following.
  • Subject to suitable and specific measures to safeguard the rights of the consumer whose personal data is being processed, and
  • Under the responsibility of a professional subject to confidentiality obligations under federal, state, or local law (collectively, the "First Exceptions").

The obligations imposed on controllers or processors under the Act shall not restrict a controller's or processor's ability to collect, use, or retain data for internal use to do any of the following.

• Conduct internal research to develop, improve, or repair products, services, or technology;
• Effectuate a product recall;
• Identify and repair technical errors that impair existing or intended functionality; or
• Perform internal operations that are reasonably aligned with the expectations of the consumer or reasonably anticipated based on the consumer's existing relationship with the controller, or are otherwise compatible with processing data in furtherance of the provision of a product or service specifically requested by a consumer or the performance of a contract to which the consumer is a party (collectively, the "Second Exceptions"). 

Personal data collected, used, or retained pursuant to the Second Exceptions shall, where applicable, take into account the nature and purpose or purposes of such collection, use, or retention. Such data shall be subject to reasonable administrative, technical, and physical measures to protect the confidentiality, integrity, and accessibility of the personal data and to reduce reasonably foreseeable risks of harm to consumers relating to such collection, use, or retention of personal data.

The obligations imposed on controllers or processors under the Act shall not apply where compliance by the controller or processor with the provisions of law would violate an evidentiary privilege under the laws of New Jersey, and nothing in the Act shall be construed to prevent a controller or processor from providing personal data concerning a consumer to a person covered by an evidentiary privilege under the laws of New Jersey as part of a privileged communication (the "Third Exception").

Personal data that are processed by a controller pursuant to any of the First Exceptions, the Second Exceptions, or the Third Exception shall do the following.

• Shall not be processed for any purpose other than a purpose expressly listed with respect thereto; and
• Shall be processed solely to the extent that the processing is necessary, reasonable, and proportionate to the specific purpose or purposes listed with respect thereto.

If a controller processes personal data pursuant to any of the First Exceptions, the Second Exceptions, or the Third Exception, the controller bears the burden of demonstrating that such processing qualifies for the exemption and complies with the requirements thereunder.

Processing personal data for the purposes expressly identified with respect to any of the First Exceptions, the Second Exceptions, or the Third Exception shall not solely make a legal entity a controller with respect to such processing if such entity would not otherwise meet the definition of a controller.