3rd Circuit Hears Argument on Cybersecurity Issue Regarding Data Breaches of Consumer Information

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

ComputerOn March 3, 2015, the Third Circuit heard oral argument in FTC v. Wyndham Worldwide Corp. (No. 14-3514) on the novel issue of whether or not the Federal Trade Commission can sue a company for failing to properly secure consumer data. The case arose when the FTC sued Wyndham Worldwide Corporation, after Russian hackers broke into the Wyndham’s computer network and stole the credit card information for thousands of customers. The FTC filed the suit based on its authority under federal law to patrol unfair business practices. The Wyndham Hotel contends that its cybersecurity system is outside the realm of the FTC’s authority and that the FTC had not given notice about what the law would require with regard to corporate data security practices. The case reached the Third Circuit after the District for New Jersey denied the Wyndham’s motion to dismiss, and the Wyndham filed an interlocutory appeal. The panel’s, consisting of Judge Thomas Ambro and Senior Judges Anthony Scirica and Jane Roth, interest in the novel issue was apparent from the fact that oral argument lasted twice as long as the allotted time and the Court requested supplemental briefing.

See this article for additional information (subscription required). A recording of the oral argument can be found here at the 3rd Circuit’s website.

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