With FTC v. LabMD stalled, FTC tries to move the hearing forward

For those following FTC. v. LabMD, here’s a small update.

The FTC’s administrative hearing against LabMD came to a screeching halt at the end of May when the House Oversight Committee indicated that it was investigating whether the FTC had based its case against LabMD on erroneous or inaccurate information provided by Tiversa. In the middle of the allegations is a former employee of Tiversa, Rick Wallace, who invoked his 5th Amendment rights when called to testify in the FTC’s administrative case. Wallace sought immunity from the House Oversight Committee, but shocker: it seems to have become a partisan issue.

The immunity was not immediately forthcoming, with Issa publicly calling for the Democrats on the House Oversight Committee to view the proffer Wallace had provided. But the ranking Democrat on the Committee – and Senator Jay Rockefeller – raised objections to the House investigating the FTC while a case was still in progress.

And that’s pretty much where things have sat since June, with the House now in August recess.

Under the FTC’s own administrative procedures, attorneys for LabMD can seek immunity for Wallace under Rule 39. They didn’t, however, waiting to see if the House would provide the immunity, and now the FTC is pushing the issue. In a motion filed August 5, the FTC seeks to compel LabMD to file for immunity for Wallace under Rule 39 or to resume the evidentiary hearing:

Pursuant to Federal Trade Commission Rule of Practice 3.22, Complaint Counsel respectfully moves for an order requiring Respondent’s counsel to file a request under Rule 3.39 for an order requiring Richard Wallace to testify before this Court and granting immunity.

If Respondent’s counsel fails to file a request for such an order within fourteen days of this Court granting Complaint Counsel’s motion, Complaint Counsel respectfully moves that this Court resume the evidentiary hearing so Respondent can complete its case and this Court can proceed toward rendering a decision in this matter.

Complaint Counsel met and conferred with counsel for Respondent on the subject of this motion, but was unable to reach agreement.

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