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Data Protection Leader
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Volume: 15 Issue: 6
(June 2018)

Keywords:
litigation data security enforcement supervisory authority

Jurisdictions:
usa

USA: Eleventh Circuit Court vacates order in LabMD v. FTC

The U.S. Court of Appeals for the Eleventh Circuit (‘the Eleventh Circuit Court’) issued, on 6 June 2018, its decision in LabMD, Inc. v. Federal Trade Commission (‘FTC’), vacating an FTC order (‘the Order’) that directed LabMD to create and implement a variety of data security measures, following LabMD’s exposure of 9,300 consumers’ personal information. The Eleventh Circuit Court addressed two questions, namely, whether LabMD’s failure to act in creating and operating a reasonably designed data security programme amounted to an unfair act or practice under §5 of the FTC Act of 1914, and whether the Order was enforceable, since according to LabMD, the Order did not direct it to cease committing an unfair act or practice within the meaning of §5(a) of the FTC Act.

In holding that the Order was unenforceable, the Eleventh Circuit Court considered the problems that the Order would pose if it was enforced in light of its lack of specificity. In particular, it highlighted that the lack of standards informing what constitutes a reasonably designed data security programme, as specified in the Order, would make its enforcement by a district court problematic.

 

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