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Delaware Chambers Urge Senate to Reject House Bill 306 Over AI Liability Concerns
Delaware’s top business groups have united in a letter to the state Senate, warning that a new AI‑liability bill could turn every chatbot interaction into a potential lawsuit. The Delaware State Chamber of Commerce, the New Castle County Chamber of Commerce, and the Central Delaware Chamber of Commerce jointly urged lawmakers to vote against House Bill 306 (HB 306), which the House has already passed.
HB 306 would make it easier for plaintiffs to sue businesses that use chatbots or other AI tools that do not meet unspecified compliance standards. The proposal would grant a private right of action, allow statutory damages of at least $1,000 per violation, and enable class‑action claims that could reach $10 million. It also sets civil penalties of up to $5 million. Under the bill’s wording, each individual chatbot session could be treated as a separate violation, meaning a single conversation might trigger multiple claims.
The chambers argue that the bill’s language removes the need to prove actual harm before a claim can be filed. “The bill could lead to claims against businesses and nonprofit organizations on a scale similar to the litigation seen in patent disputes and the Millenium Digital Copyright Act,” the letter says. The groups warn that small and mid‑size companies could face financially devastating lawsuits, and that the threat of class actions could deter the adoption of chatbots that already offer benefits such as extended customer service, reduced wait times, and cost savings.
To illustrate how the bill diverges from existing Delaware law, the chambers point to the Delaware Personal Data Privacy Act (DPDPA). Under the DPDPA, enforcement is handled by the Department of Justice and the law does not create a private right of action. Delaware’s consumer‑fraud statute penalizes deception or concealment only when performed with intent that others rely on the misrepresentation, and the deceptive‑trade‑practices statute imposes civil penalties only for wilful violations. The chambers say that HB 306’s approach would shift liability away from intent and harm and toward technical compliance.
The letter proposes three amendments to address the chambers’ concerns. First, the bill should require a showing of actual harm before a claim can be pursued. Second, it should mirror the DPDPA’s enforcement structure, removing the private right of action and limiting liability to intent and harm. Third, the chambers call for clear safe‑harbor language that defines good‑faith compliance, giving businesses and nonprofits certainty about their legal exposure.
While the chambers emphasize their support for responsible AI use and recognize the need for consumer protection, they argue that the current wording of HB 306 creates “undue legal risk” that could stifle innovation and the deployment of beneficial AI tools across Delaware’s economy.
In closing, the letter requests that the Senate vote “NO” on HB 306 in its present form and encourages lawmakers to consider the proposed amendments. The chambers note that the bill’s passage could have a chilling effect on AI adoption in Delaware, a state that already hosts a large number of corporations and is known for its business‑friendly regulatory environment.
The Senate is scheduled to consider the bill in the coming weeks. No further statements have been released by the chambers or by the bill’s sponsors.
HB 306 would make it easier for plaintiffs to sue businesses that use chatbots or other AI tools that do not meet unspecified compliance standards. The proposal would grant a private right of action, allow statutory damages of at least $1,000 per violation, and enable class‑action claims that could reach $10 million. It also sets civil penalties of up to $5 million. Under the bill’s wording, each individual chatbot session could be treated as a separate violation, meaning a single conversation might trigger multiple claims.
The chambers argue that the bill’s language removes the need to prove actual harm before a claim can be filed. “The bill could lead to claims against businesses and nonprofit organizations on a scale similar to the litigation seen in patent disputes and the Millenium Digital Copyright Act,” the letter says. The groups warn that small and mid‑size companies could face financially devastating lawsuits, and that the threat of class actions could deter the adoption of chatbots that already offer benefits such as extended customer service, reduced wait times, and cost savings.
To illustrate how the bill diverges from existing Delaware law, the chambers point to the Delaware Personal Data Privacy Act (DPDPA). Under the DPDPA, enforcement is handled by the Department of Justice and the law does not create a private right of action. Delaware’s consumer‑fraud statute penalizes deception or concealment only when performed with intent that others rely on the misrepresentation, and the deceptive‑trade‑practices statute imposes civil penalties only for wilful violations. The chambers say that HB 306’s approach would shift liability away from intent and harm and toward technical compliance.
The letter proposes three amendments to address the chambers’ concerns. First, the bill should require a showing of actual harm before a claim can be pursued. Second, it should mirror the DPDPA’s enforcement structure, removing the private right of action and limiting liability to intent and harm. Third, the chambers call for clear safe‑harbor language that defines good‑faith compliance, giving businesses and nonprofits certainty about their legal exposure.
While the chambers emphasize their support for responsible AI use and recognize the need for consumer protection, they argue that the current wording of HB 306 creates “undue legal risk” that could stifle innovation and the deployment of beneficial AI tools across Delaware’s economy.
In closing, the letter requests that the Senate vote “NO” on HB 306 in its present form and encourages lawmakers to consider the proposed amendments. The chambers note that the bill’s passage could have a chilling effect on AI adoption in Delaware, a state that already hosts a large number of corporations and is known for its business‑friendly regulatory environment.
The Senate is scheduled to consider the bill in the coming weeks. No further statements have been released by the chambers or by the bill’s sponsors.
