Richard Raysman is a Partner in our
New York office.
As far as disputes between administrative agencies and
investigated companies, this one has gotten particularly public and
ugly. The dispute in question involves the Federal Trade Commission
(FTC) and LabMD Inc. (LabMD), a company that performed laboratory
tests on blood samples from consumers, a business that thus
involved obtaining personal information about those consumers. In
August of 2013, the FTC filed an administrative complaint against
LabMD based on alleged violations of Section 5 of the FTC Act.
The authority to do so purported to arise from the
Commission's authority to addresses "unfair ... acts or
practices." See 15 U.S.C. §45(a)(1). The
FTC claimed that inadequate data security protocols at LabMD
contributed to multiple breaches of medical records. Specifically,
the agency asserted that a totality of lax data security practices
caused its computer systems to be breached, and as a result,
personal
