Eleventh Circuit Vacates FTC Order against LabMD as Lacking Specificity Necessary to Protect Due Process Rights

The Court of Appeals for the Eleventh Circuit has overturned an FTC cease and desist order enjoining LabMD to install a reasonable data-security program, issued in response to the disclosure of a single computer file containing personal information regarding 9,300 customers. Agreeing with arguments from the now-defunct LabMD, the court determined “that the order is unenforceable because it does not direct LabMD to cease committing an unfair act or practice within the meaning of Section 5(a)” of the Federal Trade Commission Act (15 U.S.C. §…
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No More Chits to Call In: Computer Crime Policy Does Not Cover Fraudulent Transaction

In Interactive Communications International, Inc. v. Great American Insurance Company, a lawsuit closely monitored by those in the cyberinsurance space, the Eleventh Circuit affirmed a Georgia federal court’s decision, finding an insurance policy’s “Computer Fraud” coverage did not extend to certain losses caused by fraudsters. The decision comports with other recent decisions finding that social engineering fraud schemes do not satisfy the policy’s requirement of losses resulting directly from the use of a computer. Here, the devil was in the details. InComm operated a…
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