LABMD, INC., Plаintiff-Appellant, v. FEDERAL TRADE COMMISSION, Defendant-Appellee.
No. 14-12144.
United States Court of Appeals, Eleventh Circuit.
Jan. 20, 2015.
We do not disagree with McCants, though.
The fact that McCants does not render loss of a statute-of-limitations defense per se prejudice does not mean that a party that could suffer the loss of such a defense upon a voluntary dismissal without prejudice will necessarily be at the losing end of a motion for voluntary dismissal without prejudice. Rather, McCants allows for a motion for voluntary dismissal without prejudice to be denied if a statute-of-limitations defense could be lost, provided that consideration of all of the equities in the case warrant such a conclusion. We think that this is the correct formulation of what
Finally, based on all of these considerations, we conclude that the district court did not abuse its discretion when it granted Arias‘s motiоn for voluntary dismissal without prejudice under
V.
In sum, we conclude that it is unlikely that Defendants had a meritorious statute-of-limitations defense in the first place. But even if they did, in view of the equities, the district court did not abuse its discretion in granting Arias‘s motion for voluntary dismissal without prejudice pursuant to
AFFIRMED.
Mark B. Stern, Lauren Fassett, Adrienne E. Fowler, Abby Christine Wright, U.S. Department Of Justice, Perham Gorji, Federal Trade Commission, Washington, DC, for Defendant-Appellee.
Before MARTIN and ANDERSON, Circuit Judges, and COTE,* District Judge.
LabMD, Inс. is an Atlanta-based laboratory that performed cancer-detection testing services for doctors. After the Federal Trade Commission (FTC) discovered that LabMD patient information files were available on a peer-to-peer file-sharing network, it launched an investigаtion into LabMD‘s data-security practices. The investigation persisted for three years, leading LabMD‘s CEO, Michael Daugherty, to publicly criticize the FTC‘s actions. Shortly after Mr. Daugherty posted an online trailer for his book, “The Devil Inside the Beltway,” which he says exposes corruption in the fеderal government, the FTC filed an administrative complaint against the company. The administrative proceeding is ongoing.
This appeal addresses the District Court‘s dismissal of LabMD‘s challenges to the FTC‘s ability to regulate and conduct enforcement proceedings in the area of healthcare data privacy. LabMD argues that the FTC‘s enforcement action violates the Administrative Procedure Act (APA), is ultra vires, and is unconstitutional.
Before we can reach the merits of LabMD‘s claims, we must first face the central question of whether the District Court has subject-matter jurisdiction to consider LabMD‘s challenges while the administrative proceeding is ongoing. Because we hold that the FTC‘s Order denying LabMD‘s motion to dismiss was not a “final agency action,” as is required of claims made under the APA, those claims were properly dismissed. And because we conclude that LabMD‘s other claims—that the FTC‘s actions were ultra vires and unconstitutional—are intertwined with its APA claim for relief and may only be heard at the end of the administrative proceeding, we affirm the District Court‘s order dismissing the case for lack of subject-matter jurisdiction.
I.
In 2008, internet-security company Tiversa, Inc. notified LabMD that it had obtained sensitive patient information from LabMD. Under circumstances that remain hotly disputed by the parties, the FTC learned about the possible breach of security involving patient information and began an investigation into LabMD‘s data-security practices in 2010. On July 19, 2013, Mr. Daugherty posted an online trailer to his book highlighting corruption in the federal government, including specific claims about the FTC. Three days after Mr. Daugherty posted the trailer online, the FTC gave notice of its intent to file a complaint against LabMD.
In August 2013, the FTC filed its administrative complаint, alleging that LabMD violated Section 5 of the FTC Act by engaging in an “unfair . . . act[] or practice[]” by failing to prevent unauthorized access to its patient information. LabMD moved to dismiss the FTC Complaint, which the FTC denied in a January 2014 Order. LabMD next filed suit in the District Court for the District of Columbia, seeking an injunctiоn to stay the administrative action from going forward on the grounds that it was an improper expansion of FTC jurisdiction, was retaliatory, and violated the Due Process Clause. LabMD v. FTC, No. 1:13-cv-1787 (D.D.C. Nov. 14, 2013). LabMD filed a similar action in this Court, making the same allegations. LabMD Inc. v. FTC, No. 13-15267-F (11th Cir. Feb. 18, 2014). We denied LabMD‘s claim, citing our lack of jurisdiction ovеr a non-final agency action, but we declined to address whether the District Court could hear any of the claims. Id. LabMD voluntarily dismissed its District of Columbia suit.
On March 20, 2014, LabMD filed this suit in the Northern District of Georgia, alleging that: (1) the FTC‘s administrative
II.
We review de novo a district court‘s grant of a motion to dismiss for lack of subject-matter jurisdiction. Cash v. Barnhart, 327 F.3d 1252, 1255 n. 4 (11th Cir. 2003) (per curiam). The District Court dismissed LabMD‘s APA claim for lack of subject-mattеr jurisdiction because the FTC‘s Order denying dismissal was not a final order. The District Court also dismissed the related constitutional and ultra vires claims as premature. We first turn to LabMD‘s challenge under the APA. LabMD argues that the Complaint and Order were sufficiently final to confer subject-matter jurisdiction over its APA сlaim. We cannot agree.
According to the APA, “final agency action for which there is no other adequate remedy in a court [is] subject to judicial review.”
Under the Bennett standard, the Order and Complaint LabMD seeks to have us review are not final. First, neither document is a consummation of the agency‘s decisionmaking process. LabMD suggests that these documents “effectively determined there would be legal consequences imposed on LabMD,” because the filing of an FTC complaint almost certainly leads to a cease-and-desist order. But, high odds of a cease-and-desist order coming from the FTC do not advance our ability to review the FTC actions. It is the nature of the action we must consider, and the Complaint and Order do not finally decide these issues. By definition, the denial of a motion to dismiss ensures that the proceeding will continue to a later, final order. In the sаme way, a complaint is just an initial document.
Next, no “direct and appreciable legal consequences” flowed from either FTC action, and “no rights or obligations have been determined,” because the agency proceeding is ongoing. See Bennett, 520 U.S. at 178, 117 S. Ct. at 1168-69. LabMD argues that, on two ocсasions, the FTC characterized its Order as final, and therefore we must accept it as such. First, the FTC described its Order here as a “definitive interpretation of the application of Section 5.” Second, the FTC sought Chevron1 deference for this Order in another case. See FTC v. Wyndham Worldwide Corp., 10 F. Supp. 3d 602, 615 n. 8 (D.N.J. 2014). True as this may be, we are not required to agree with the FTC‘s characterization of its own Order in the course of litigation. See, e.g., Inv. Co. Inst. v. Camp, 401 U.S. 617, 628, 91 S. Ct. 1091, 1097-98, 28 L. Ed. 2d 367 (1971); William Bros. v. Pate, 833 F.2d 261, 265 (11th Cir. 1987) (“[W]e do not agree that the [agency‘s] mere litigating position is due to be given deference. . . . [T]he Supreme Court has on a number of occasions proscribed granting deference to a litigating position. . . .“). And while it would be notable that some other court had afforded Chevron deference to the FTC‘s Order—because that would imply a finding of finality—the court in the case proffered by LabMD did not afford Chevron deference. The FTC merely asked for it.
III.
LabMD next suggests that its constitutional and ultra vires claims can be heard even if we do not reach the APA claim. But under similar circumstances, the Supreme Court hаs declined to consider constitutional claims before the administrative process was completed. See Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 215, 114 S. Ct. 771, 780, 127 L. Ed. 2d 29 (1994) (holding that the district court did not have subject-matter jurisdiction to hear a pre-enforcement due process challenge). The Court in Thunder Basin emphasized that the claims “[cоuld] be meaningfully addressed in the Court of Appeals” after final agency determination. Id. Our own Court‘s decision in Doe v. FAA, 432 F.3d 1259 (11th Cir. 2005), also clarifies that all constitutional claims must be funneled through the direct-appeal process after a final agency action if that is the scheme created by Congress. Id. at 1262-63. The FTC Act provides for appellate review by the Courts of Appeals after the agency action is complete, see
LabMD suggests that its First Amendment retaliation claim—alleging that the FTC brought its Complaint to retaliate against LabMD for Mr. Daugherty‘s book—is less intertwined with the enforcement proceeding than its other constitutional claims. This, LabMD contends, is because the retaliatory conduct was complete at the moment the Complaint was filed. LabMD suggests that the District Court need only examine the filing of the FTC‘s Complaint to determine whether it was retaliatory in violation of the First Amendment. Any later developments in the administrative proceeding, LabMD reasons, have no bearing on whether the filing of the Complaint itself was retaliatory. Thus, LabMD concludes that the matters are not intertwined, and its retaliation claim should be heard even beforе the administrative proceeding ends.
Even if we were to accept LabMD‘s distinction as true, none of our cases suggest that First Amendment retaliation claims must be treated differently than other constitutional claims under Thunder Basin and Doe. We conclude that LabMD‘s First Amendment claim must join its other claims to await appellate review after the Commission‘s proceedings are final, as Congress contemplated in the FTC Act.
The District Court correctly held that it did not have jurisdiction over LabMD‘s claims. And until the administrative proceeding is complete, we too have no jurisdiction to evaluate the merits. We AFFIRM the District Court‘s Order dismissing the case for lack of subject-matter jurisdiction.