Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...
July 30 — The U.S. Court of Appeals for the Third Circuit July 29 granted a petition by Wyndham Hotels and Resorts LLC for an interlocutory appeal of portions of a district court opinion refusing to dismiss a Federal Trade Commission data security enforcement action against the hotelier .
The case has been closely watched by businesses and attorneys because it involves one of the only instances of a company challenging the FTC's authority to take action against alleged lax data security practices. The appellate court review of that issue is a first.
The FTC initiated an enforcement action against Wyndham Worldwide Corp. and three of its subsidiaries in 2012, alleging that computer network intrusions led to more than $10.6 million in payment card fraud losses.
Wyndham and its subsidiaries moved to dismiss the case, arguing that the FTC exceeded its congressional authority and that its use of data security enforcement actions lacked regulatory backing and failed to give them notice of which practices were lawful.
On April 7, the U.S. District Court for the District of New Jersey denied a motion to dismiss by Hotels and Resorts, ruling that the FTC has authority under the unfairness prong of Section 5 of the FTC Act, 15 U.S.C. § 45(a), to bring a data security enforcement action against the company (FTC v. Wyndham Worldwide Corp., No. 2:13-cv-01887, 2014 BL 94785 (D.N.J. Apr. 7, 2014)). Specifically, the court said the FTC didn't need express authority from Congress to bring data security enforcement actions under the FTC Act and didn't have to promulgate prior data security regulations.
In a June 23 unpublished opinion, the district court ruled that Hotels and Resorts could seek interlocutory review of portions of the April 7 opinion (FTC v. Wyndham Worldwide Corp., No. 2:13-cv-01887, 2014 BL 174519 (D.N.J. June 23, 2014)).
The district court ordered the following questions to be certified:
In separate June 23 unpublished opinion, the district court ruled that the FTC adequately alleged that several Wyndham Hotels entities operated as a common enterprise (FTC v. Wyndham Worldwide Corp., No. 2:13-cv-01887, 2014 BL 173985 (D.N.J. June 23, 2014)).
Judge Michael A. Chagares issued the Third Circuit order. Judges Thomas L. Ambro and Thomas I. Vanaskie were also on the panel.
The FTC represented the commission in the Third Circuit matter. Kirkland & Ellis LLP, Gibbons PC and Stanford Law School represented the Wyndham entities.
Full text of the court's order is available at http://www.bloomberglaw.com/public/document/FTC_v_Wyndham_Worldwide_Corp_et_al_Docket_No_1408091_3d_Cir_Jul_0.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)