Chicago Partner Ken Dort was recently quoted in a Modern Healthcare article titled “Ruling could mean FTC lost tool to go after healthcare-related data breaches.”
The Federal Trade Commission (FTC) alleged that LabMD harmed its consumers in 2013 following two security breaches in 2008 and 2012, when personal information was made available on a peer-to-peer file sharing network and LabMD data was found in possession of individuals who pleaded “no contest” to identity theft charges.
An independent FTC administrative law judge dismissed the case, citing "possibility” but no “probability” or “likelihood of harm.”
FTC officials may appeal the ruling to the agency’s commissioners. The ruling is a significant step in determining what type of harm the FTC may seek to bring claims against companies with security breaches.
Ken said that larger implications of the case may lie farther in the future. “If commissioners reverse the judge's decision, it would open up the doors to more activity. On the other hand, if the commissioners were to uphold the decision, it would send a message that the FTC will only narrowly define what constitutes harm in future cases.”