Read TechFreedom’s amicus brief in FTC v. LabMD

I wasn’t aware of this until today, but TechFreedom filed a motion seeking leave to submit an amicus brief in FTC v. LabMD. The brief supports LabMD’s position and urges the Commission to uphold Judge Chappell’s initial decision in favor of LabMD.

You can read their brief here. Not surprisingly, I agree with their argument that the FTC has attempted to convert what was and should be a three-prong test into a two-prong test by watering down “likely to cause to substantial injury” to could possibly cause.  I also agree with  their other arguments.  I continue to be stunned that FTC presented NO expert testimony that evaluated LabMD’s infosecurity standards by standards in 2007-2008 that would have been applicable for their size and nature of business. But even if they had presented expert testimony that found LabMD’s infosecurity “unreasonable” or wanting in that regard, they would still have to demonstrate likelihood of substantial injury to consumers that consumers could not avoid and that would not be offset by benefits to consumers. They failed to present any on-point evidence on that issue, relying, instead, of surveys conducted years after the incident, and where the experts were told to assume that LabMD’s infosecurity was unreasonable. And in good little lockstep, their experts then spun off a fairy tale of possible horribles – even though there was NO credible evidence that anyone other than Tiversa ever acquired the 1718 file and that the file was never found anywhere other than in Tiversa’s possession and those with whom Tiversa then shared the file.

Of course, if the Commission does not uphold the ALJ’s initial decision, this will go to federal court, and hopefully the federal court will not be deferential to the agency but will uphold the plain language of the statute and Congress’s intention to constrain or rein in FTC’s use of its authority in this type of situation.

 

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