Monthly Archives: November 2015

ALJ Rules Against FTC in LabMD Data Security Action: Sets High Bar for Proving Consumer Harm

Posted by J. Nicole Martin on November 20, 2015
Federal Trade Commission, FTC, HIPAA / No Comments

shutterstock_157454741Last June we wrote about the FTC’s enforcement action against LabMD, a medical testing laboratory, which was forced to wind down its business because of the costs associated with challenging the FTC since 2013. Using its broad enforcement authority under Section 5 of the FTC Act, the FTC alleged that LabMD failed to “provide reasonable and appropriate security for personal information on its computer networks,” which the FTC claimed lead to the data of thousands of consumers being leaked.

On November 13, 2015, Chief Administrative Law Judge D. Michael Chappell ruled in favor of LabMD, dismissing the FTC’s complaint because the FTC “fail[ed] to prove that [LabMD’s] alleged unreasonable data security caused, or is likely to cause, substantial consumer injury, as required by Section 5(n) of the FTC Act, [LabMD’s] alleged unreasonable data security cannot properly be declared an unfair act or practice in violation of Section 5(a) of the FTC Act.” Notably, Judge Chappell concluded that Continue reading…

J. Nicole Martin

J. Nicole Martin

J. Nicole Martin is an associate and practices in the Health Care Practice Group. Nicole assists accountable care organizations, health care systems, long term care providers, behavioral and mental health providers, medical device manufacturers, physician practices and pharmacies with their compliance, regulatory and transactional needs. Nicole’s practice includes providing clients with counsel regarding HIPAA/HITECH and state privacy and security laws, data breaches, business associate and covered entity obligations, licensure laws, Medicare, Medicaid and third-party payer matters, medical staff issues, and fraud and abuse laws. Nicole also represents clients undergoing changes of ownership and changes of control, and assists them with the transactional, regulatory and compliance requirements necessary to finalize the transactions.

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