Breach, Data Security

In latest filing, LabMD claims lack of due process, prejudice taint FTC case

In January, the Eleventh Circuit court dismissed LabMD's motion challenging the authority of the Federal Trade Commission (FTC) regarding a data breach enforcement action. But the Atlanta-based medical testing lab, which has closed most of its operations while battling FTC data security claims, continues to push to have the case tossed.

On Friday, LabMD filed a new motion (PDF) with the office of the FTC administrative law judge requesting to dismiss the complaint due to "lack of due process" and "prejudice," which allegedly taint the case, court documents said. FTC's 2013 complaint stems from an investigation it began in 2009, which allegedly involved around 9,000 LabMD customers, whose names, Social Security numbers, dates of birth and personal health insurance information were exposed on publicly accessible peer-to-peer (P2P) file-sharing networks.

The filing this week specifically referenced a congressional committee which called into question information provided to the FTC during its investigation

Specifically, Darrell Issa, the chairman of the House Committee on Oversight and Government Reform (OGR), wrote a letter last June to the FTC expressing the committee's concerns – that the peer-to-peer intelligence provider Tiversa may have submitted “inaccurate” findings to the agency, which “played a role in the FTC's decision to initiate enforcement actions against LabMD.” 

In its new filing LabMD argued that the “FTC's responses to Congress were aimed at protecting its reputation, not LabMD's due process rights or the integrity of this proceeding.”

The firm specifically questioned FTC Chairwoman Edith Ramirez's involvement in enforcement actions by referencing a 2014 letter from FTC's Secretary Donald Clark, which “suggested that the Commissioners would be walled from the OGR's investigation,” LabMD claimed in court documents.

“However, at all times relevant, Chairwoman Ramirez was in total control and working to protect the agency,” the company alleged. LabMD also wrote that the FTC's reliance on Tiversa's findings were “precisely the kind of prosecutorial misconduct that violates LabMD's constitutional rights.”

The FTC-LabMD trial, which has served as an ongoing example of private companies challenging the FTC's data security authority, is scheduled to resume next Tuesday.

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