Wyndham Seeks Immediate Appeal Over FTC Authority To Regulate Data Security While District Court Allows Case To Proceed On Common-Enterprise Theory

For the past two years, a federal court in New Jersey has considered important data security issues in the FTC v. Wyndham Worldwide Corp. litigation. Two recent opinions issued by the court now have brought that case back into the news—and made clear that the stakes are as high as ever.

Interlocutory Appeal to the Third Circuit

First, over the Federal Trade Commission's (FTC's) opposition, the district court certified an interlocutory appeal to the Third Circuit regarding its earlier denial of Wyndham's motion to dismiss. Specifically, the district court certified two questions of law for appellate review: (i) whether the FTC has the authority under Section 5 of the FTC Act to pursue an unfairness claim involving data security; and (ii) whether the FTC must formally promulgate regulations before bringing such an unfairness claim. The question now becomes whether the Third Circuit will grant permission to appeal and thereby allow appellate consideration of the