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900200.00001/50491486v.4

Stephen M. Orlofsky, Esquire

New Jersey Resident Partner

Rachel J. Gallagher, Esquire

BLANK ROME LLP

301 Carnegie Center, 3rd Floor

Princeton, NJ 08540

Telephone: (609) 750-7700

Fax: (609) 750-7701

Orlofsky@BlankRome.com

RGallagher@BlankRome.com

Attorneys for Amici Curiae TechFreedom, International

Center for Law and Economics & Consumer Protection

Scholars Justin (“Gus”) Hurwitz, Esquire, Todd J. Zywicki, Esquire,

and Paul H. Rubin, Ph.D

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

FEDERAL TRADE COMMISSION,

Plaintiff,

V.

WYNDHAM WORLDWIDE

CORPORATION, ET AL.,

Defendants.

Civil Action No.

2:13-cv-01887(ES)(SCM)

AMICI CURIAE BRIEF OF

TECHFREEDOM,INTERNATIONAL

CENTER FOR LAW AND ECONOMICS &

CONSUMER PROTECTION SCHOLARS

Return Date: June 17, 2013

OF COUNSEL & ON THE BRIEF

Berin Szoka, Esquire

TechFreedom

Counsel for TechFreedom

Geoffrey A. Manne, Esquire

International Center for Law and

Economics

Counsel for the International Center for

Law and Economics

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TABLE OF CONTENTS

Page Nos.

Interest of Amici Curiae.............................................................................................1

Introduction................................................................................................................2

Argument....................................................................................................................6

I. The Section 5 Unfairness Claim is Unconstitutionally Vague as Applied to

Wyndham’s Data Security Practices. ..............................................................6

II. This Court Should Establish Pleading Standards for Data Security Cases

Under Section 5. ............................................................................................12

A. Count II Fails To Allege Facts Supporting Each Statutorily Required

Element Of An Unfairness Claim..................................................................13

1. Substantial Injury ......................................................................14

2. Reasonably Avoidable ..............................................................17

3. Countervailing Benefits............................................................18

B. Deception Claims Should Be Held To The Heightened

Particularity Standard Of 9(b). ......................................................................20

Conclusion ...............................................................................................................21

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TABLE OF AUTHORITIES

Page Nos.

CASES

Altria Group, Inc. v. Good,

555 U.S. 70 (2008)................................................................................................8

Ashcroft v. Iqbal,

556 U.S. 662 (2009)............................................................. 12, 13, 14, 17, 18, 19

Bell Atlantic Corp. v. Twombly,

550 U.S. 544 (2007)......................................................................................12, 13

FCC v. Fox Television Stations, Inc.,

132 S. Ct. 2307 (2012)....................................................................................7, 11

FTC v. Ivy Capital, Inc.,

2011 WL 2118626 (D. Nev. May 25, 2011).................................................13, 20

FTC v. Lights of Am., Inc.,

760 F.Supp.2d 848 (C.D. Cal. 2010)............................................................13, 20

FTC v. Sperry & Hutchinson Co.,

405 U.S. 233 (1972)..............................................................................................2

Grayned v. City of Rockford,

408 U.S. 104 (1972)..........................................................................................7, 9

Hammond v. The Bank of New York Mellon Corp.,

2010 WL 2643307 (S.D.N.Y. June 25, 2010)....................................................16

In the Matter of Google Inc.,

FTC File Number 111-0163, Jan. 3....................................................................12

In the Matter of Google Inc.,

FTC No. C-4336 .................................................................................................10

In re Burlington Coat Factory Sec. Litig.,

114 F.3d 1410 (3d Cir. 1997) .............................................................................20

In re Cliffdale Associates, Inc.,

103 F.T.C. 110 (1984) ..................................................................................14, 20