LabMD, Inc. v. Federal Trade Commission

The Eleventh Circuit vacated a cease and desist order issued by the FTC against LabMD. The FTC brought an enforcement action against LabMD, alleging that LabMD's data-security program was inadequate and thus constituted an "unfair act or practice" under Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. 45(a). The court agreed with LabMD that the order was not enforceable because it did not direct LabMD to cease committing an unfair act or practice within the meaning of Section 5(a). Assuming arguendo that LabMD's negligent failure to design and maintain a reasonable data-security program invaded consumers' right of privacy and thus constituted an unfair act or practice, the court held nonetheless that the cease and desist order was not enforceable where it contained no prohibitions, but rather commanded LabMD to overhaul and replace its data-security program to meet an indeterminable standard of reasonableness. View "LabMD, Inc. v. Federal Trade Commission" on Justia Law