Read the full story: Law360

An administrative law judge on Thursday shot down LabMD Inc.’s bid to block the Federal Trade Commission from introducing into the parties’ data security fight new evidence related to the origin of an allegedly leaked patient file, rejecting the lab’s argument that the documents were clearly inadmissible.

 

In his order, Chief Administrative Law Judge D. Michael Chappell denied LabMD’s motion to prohibit the FTC from using or offering into evidence six documents that contain additional information about how data security firm Tiversa Holding Corp. came across a LabMD patient file that Tiversa allegedly found on servers outside the company and turned over to the regulator.

 

LabMD argued in its March 25 motion to exclude that the agency shouldn’t be allowed to introduce the proposed exhibits because it would cause unfair prejudice and confusion due to the agency’s undue delay in obtaining and producing the documents. According to the lab, the evidence should have been produced pursuant to a September 2013 subpoena that the FTC issued to Tiversa that sought all documents related to LabMD, but were withheld by the data security company.

 

But Judge Chappell declined to side with the lab in his order Thursday, instead ruling that the present record in the case “fails to support the conclusion that the subject documents are clearly inadmissible for all purposes” and that the possibility still existed that the FTC could use the documents to rebut the lab’s defense…

 

Reed Rubinstein, a Dinsmore & Shohl LLP partner and the senior vice president of litigation at Cause of Action, which is representing LabMD in the administrative proceeding, told Law360 on Friday that his side was encouraged by the judge’s decision to leave open the possibility that the evidence could still be excluded at a later time.

 

“It seemed as though the judge’s ‘wait and see’ attitude was a suggestion perhaps that our arguments had not fallen on deaf ears,” he said.