Wyndham Must Face FTC Suit Over Data Breach, Judge Says

Wyndham Worldwide Corp., the hotel franchiser, must face a U.S. Federal Trade Commission lawsuit over computer security lapses that allowed hackers to steal data on more than 619,000 consumer credit-card accounts, a judge ruled.

U.S. District Judge Esther Salas in Newark today rejected the company’s request to dismiss the case filed by the FTC against Wyndham and three subsidiaries in 2012, ruling that the court must “draw reasonable inferences in favor of the FTC,” at this stage in the litigation.

Wyndham, the franchiser of Days Inn hotels and Super 8 motels, wanted the case thrown out on the grounds that the FTC lacks authority to regulate data security.

Salas, who heard oral arguments in the case in November, said her decision allowing the case to move forward “does not give FTC a blank check to sustain a lawsuit against every business that has been hacked.” Instead, the court must accept the FTC’s allegations as true at this stage, Salas said in the ruling.

The case is Federal Trade Commission v. Wyndham Worldwide Corp., 13-cv-01887, U.S. District Court, District of New Jersey (Newark).

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