Recently, the 11th Circuit affirmed a district court’s ruling dismissing LabMD’s complaint and motion for preliminary injunction against the FTC. In the motion, LabMD centrally argued that the FTC lacks jurisdiction to bring an enforcement action to regulate protected health information. The FTC responded by filing a motion to dismiss on the grounds that the district court did not have jurisdiction over the case. The district court agreed with the FTC’s position and dismissed LabMD’s Complaint. The 11th Circuit’s opinion did not reach the issue of whether the FTC has the authority to enforce healthcare privacy standards. Instead, the 11th Circuit affirmed the district court’s ruling, holding that before a federal court will review the case, LabMD must first exhaust its administrative remedies.
LabMD’s case should be of great interest to other similar medical companies as the number of alleged data breaches continues to climb. Even though the FTC Act makes no mention of any requirements to maintain privacy of medical or other private information, in recent years the FTC has continued to bring enforcement actions against medical companies like LabMD for alleged privacy breaches. LabMD will undoubtedly bring a challenge to the FTC’s authority to enforce healthcare privacy standards, but we will have to wait for an answer regarding the scope of the FTC’s jurisdiction until after the administrative action has concluded.