In late June, the Federal District Court for the District of New Jersey certified two major data security issues for interlocutory appeal to the Third Circuit. FTC v. Wyndham Worldwide Corp., No. 2:13-cv-01887 (D.N.J. June 23, 2014). The Third Circuit is set to rule on two issues affecting the extent of the FTC’s authority to regulate data security among businesses: “(1) whether the FTC can bring an unfairness claim involving data security under Section 5 of the FTC Act and (2) whether the FTC must formally promulgate regulations before bringing [an] unfairness claim under Section 5.”
This decision will potentially define yet another avenue for business liability following a data breach.