New opinions — a cyber-security win for the government, plus an ERISA appeal

FTC v. Wyndham Worldwide — agency — affirmance — Ambro

Wyndham Hotels was hacked 3 times, and over 600,000 consumers’ data was stolen. Among the Wyndham brands are Ramada, Super 8, Howard Johnsons, and Days Inn. The Washington Post lays out the facts here. The Federal Trade Commission sued Wyndham, alleging that its inadequate cyber-security was unfair to consumers. Wyndham moved to dismiss, and when that was denied it brought this interlocutory appeal, arguing that the FTC lacked authority to regulate cyber-security and that it lacked notice that its cyber-security practices were unlawful. Today, the Third Circuit affirmed in an opinion peppered with criticisms sharper than one normally sees directed at a Biglaw-represented party, such as this:

Wyndham posits a reductio ad absurdum, arguing that if the FTC’s unfairness authority extends to Wyndham’s conduct, then the FTC also has the authority to “regulate the locks on hotel room doors, . . . to require every store in the land to post an armed guard at the door,” Wyndham Br. at 23, and to sue supermarkets that are “sloppy about sweeping up banana peels,” Wyndham Reply Br. at 6. The argument is alarmist to say the least. And it invites the tart retort that, were Wyndham a supermarket, leaving so many banana peels all over the place that 619,000 customers fall hardly suggests it should be immune from liability under § 45(a).

Joining Ambro were Scirica and Roth. Arguing counsel were Eugene Assaf of Kirkland & Ellis (a former Weis clerk) for Wyndham and David Shonka for the FTC. The appeal had heavy amicus involvement as well.


Stevens v. Santander Holdings — ERISA — affirmance — Greenberg

The Third Circuit held today that, when a district court held that a denial of benefits was arbitrary and remanded to the plan administrator to reinstate short-term benefits and assess the employee’s eligibility for long-term benefits, and when it retained jurisdiction over the case, the district court’s decision was not yet final. CA3 thus dismissed the appeal for lack of jurisdiction.

Joining Greenberg were Greenaway and Krause. Arguing counsel were Patricia Smith of Ballard Spahr for the employer and Mark DeBofsky for the former employee.