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RFID Connections interviewed Raymond Biagini, a Leader with the Product Liability Defense Practice at McKenna Long & Aldridge LLP, on the U.S. Government's SAFETY Act, a topic with significant implications for RFID vendors and users alike.
Note: Written transcript has been edited from audio interview for grammar and syntax.
RFID Connections: I know that you recently spoke at RFID Journal Live about the U.S. Government’s SAFETY Act. Could you briefly outline what that Act covers, please?
It would be my pleasure. First, let me state that I conceived of the SAFETY Act and wrote its core provisions back in 2002. It was passed as a statute in November of 2002. And, essentially, it is landmark legislation that eliminates or minimizes torte liability for companies that sell or provide anti-terror technology, which technology could be both products and/or services that has been approved by the Department of Homeland Security.
And that elimination or minimization of torte liability occurs if lawsuits arise in the U.S. after an act of terrorism.
So, the SAFETY Act provides incredible torte protection for companies who are deploying anti-terror technology and, typically, when you get SAFETY Act coverage, you get it for a five- to eight-year period from the date of award of that coverage. And that coverage can be renewed two years before the five- or eight-year period ends. So, you can continuously renew your SAFETY Act coverage.
And the other important benefit of the SAFETY Act is that it can also apply retroactively to anti-terror technologies or services that you already have out there in the marketplace so long as they are substantially equivalent to what you are getting coverage for.
So, there’s a retroactive feature to it as well as a prospective feature to the SAFETY Act.
How does the Act apply to suppliers of RFID products and services?
The RFID folks who are supplying products and services by definition are involved in helping to prevent the terror, minimize the possibility of a terrorist attack occurring because by definition the RFID is tracking products and making sure that people that need to know where those products are, what their whereabouts are, in fact, are well informed of the whereabouts of such products.
So, by definition, RFID would qualify as a coverable product under the SAFETY Act because RFID is, in fact, attempting to prevent or deter or mitigate or minimize an act of terrorism from occurring. So, under the SAFETY Act those that supply RFID products and services are very good candidates for SAFETY Act coverage.
You sort of touched on my next question but maybe you can elaborate. Obviously this is something the RFID community should be seriously concerned about.
Very much so and it’s interesting to note that to date companies that do provide RFID haven’t yet, to my knowledge, applied for SAFETY Act coverage. I think it’s a matter of them not being aware of the potential benefit of this remarkable and landmark statute.
And the RFID providers should be seriously concerned about obtaining SAFETY Act coverage because they are deploying RFID in some of the highest value, targeted areas that terrorists want to hit. RFID helps track assets involving cargo, tracking things at the borders, tracking things that involve aviation and so forth which are all high-value targets for terrorist attacks.
So that if there is an act of terrorism and it happens to involve an RFID system and many people die and buildings come down after the act of terrorism, there will be lawsuits that will be filed and filed against, in part I’m sure, the RFID providers claiming that somehow that RFID lost track of the whereabouts of the assets and it was within that asset that the bomb was placed by the terrorist and because we lost track of it we were not able to prevent the terrorist attack.
And the plaintiffs will argue that the RFID provider should be liable for the damages that have been caused by that terrorist attack by losing track of the asset.
This could be enterprise threatening. In other words, that – the specter of a lawsuit like that against an RFID provider threatens the very provider’s existence and that is the fundamental reason why the SAFETY Act should be pursued strenuously by RFID providers.
Well, then let me skip ahead to what I know most people are wondering. How do companies apply for coverage under the SAFETY Act?
There is an application process. You must go through that application process. There is a written application that one can get from the SAFETY Act process. That application has you address in writing the technical aspects of the RFID system. It has you address, in writing, financial-related information about the RFID that you’re deploying and insurance-related information.
You fill out that application, you submit it electronically to the Department of Homeland Security’s SAFETY Act Office and then you go through a 120-day review process by the SAFETY Act Office which is an iterative process in terms of there being conversations between you, the applicant, and the SAFETY Act Office as they review your application and as they need to gather more information to determine whether you should obtain SAFETY Act coverage.
So, it usually takes about 120 days from the date of submission to a final decision from the SAFETY Act Office in terms of whether you get SAFETY Act coverage.
The preparation of the application, particularly for those that have never done it before, can be challenging and most companies tend to look to outsiders like our law firm who have done more SAFETY Act applications than anybody in the United States and who have gotten more coverage – more companies covered under the SAFETY Act than anyone in the U.S.
So, we are available, of course, to help any company that needs it as they embark on this process.
Then, that’s a good segue to my last question. Just as a wrap up, what do you think is most significant about this piece of legislation? And also, what question haven’t I asked you as we wrap up the interview?
What’s most significant about it, of course, is that it is an incredible risk mitigation technique to hopefully eliminate what could be otherwise catastrophic liability for those that provide anti-terror products or services into the marketplace.
The question you didn’t ask is who else would it cover beyond the applicant? And beyond the applicant, the others that are covered are any of the suppliers of the seller, any of the vendors of the seller, any subcontractors who contribute to the technology or the services.
By the applicant getting SAFETY Act coverage, all of those entities derivatively get SAFETY Act coverage. So, they also are covered should there be a future act of terrorism involving this technology.
But even more importantly is that those that buy SAFETY Act-approved products or services, customers like the federal government, local state governments who buy anti-terror technology that is SAFETY Act-approved equally get that kind of torte protection.
So, customers are beginning to be aware that if they buy SAFETY Act-approved technology, they may well be buying themselves some immunity from future lawsuits arising out of acts of terrorism.
That has been converted into giving companies who have SAFETY Act coverage a competitive edge in bidding on procurements that are being issued now that have provisions in them that say we only want SAFETY Act bidders, SAFETY Act-approved bidders to apply for this contract.
So, those that have SAFETY Act coverage are now finding that they have a competitive edge in bidding on contracts and that’s going to continue to occur as more and more customers realize the benefits of that. | 