Last Wednesday, the FTC took the next step in its ongoing Section 5 enforcement proceedings against LabMD, filing a formal notice seeking an appeal of Administrative Law Judge Chappell’s initial decision before the full Commission.  Judge Chappell’s initial decision, announced on November 13, dismissed the FTC’s complaint against LabMD, finding that the FTC failed to carry its burden of demonstrating a “likely substantial injury” resulting from LabMD’s allegedly “unfair” data security practices.  The notice of appeal states that the FTC “intends to preserve and advance all arguments presented” before Judge Chappell in prior proceedings.  Since the Commission reviews Judge Chappell’s initial decision, including all findings of fact and legal conclusions, on a de novo basis, the FTC’s ruling could be markedly different than the initial decision by Judge Chappell.  The appeal comes only a few days after LabMD filed a separate lawsuit against the individual FTC attorneys involved in the case, alleging violations of LabMD’s constitutional rights in connection with the FTC’s Section 5 enforcement action.