Case Citation
Legal Case Name

Labmd, Inc. v. Fed. Trade Comm'n Case Brief

Court of Appeals for the Eleventh Circuit2018Docket #65658287
894 F.3d 1221

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Case Brief Summary & Legal Analysis

General Brief
4 min read

tl;dr: The Federal Trade Commission (FTC) found LabMD’s data security practices unfair and issued a broad remedial order. The Eleventh Circuit vacated the order, holding it was unenforceably vague because it failed to prohibit any specific conduct and instead mandated an indeterminate standard of ‘reasonableness.’

Legal Significance: This case limits the FTC’s enforcement power by requiring its cease and desist orders to prohibit specific, identifiable acts or practices. An order mandating a general standard of conduct, such as ‘reasonable’ data security, is too vague to be enforceable by a court.

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Case Facts & Court Holding

Key Facts & Case Background

LabMD, a now-defunct medical testing company, maintained sensitive personal information on its computer network. Contrary to company policy, an employee installed a peer-to-peer file-sharing application, LimeWire, on a company computer. This resulted in the exposure of a 1,718-page file containing the personal information of approximately 9,300 consumers. A data security firm, Tiversa, downloaded the file and later provided it to the Federal Trade Commission (FTC). The FTC initiated an administrative enforcement action, alleging that LabMD’s data security practices, ‘taken together,’ constituted an ‘unfair act or practice’ under Section 5 of the FTC Act. The complaint did not allege specific wrongful acts but rather a collection of failures, such as not conducting adequate risk assessments or training employees. After an Administrative Law Judge (ALJ) dismissed the complaint, the full Commission reversed. The Commission found LabMD’s practices were unfair and issued a cease and desist order. The order did not prohibit specific conduct but required LabMD to establish and maintain a ‘comprehensive information security program that is reasonably designed to protect the security, confidentiality, and integrity of personal information.’ LabMD petitioned the Eleventh Circuit for review.

Court Holding & Legal Precedent

Issue: Is a Federal Trade Commission cease and desist order that requires a company to implement a ‘reasonably designed’ data security program, without prohibiting any specific act or practice, sufficiently specific to be enforceable?

No. The court vacated the FTC’s order, holding that it was unenforceable Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse ci

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Legal Issue

Is a Federal Trade Commission cease and desist order that requires a company to implement a ‘reasonably designed’ data security program, without prohibiting any specific act or practice, sufficiently specific to be enforceable?

Conclusion

The decision significantly curtails the FTC's ability to regulate data security through Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea co

Legal Rule

A cease and desist order issued by the Federal Trade Commission must Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint

Legal Analysis

The court reasoned that the FTC's power to prevent unfair practices through Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adi

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