The Matrix

On January 14, 2021, the U.S. Court of Appeals for the Fifth Circuit issued its opinion vacating the $4.3 million penalty that the U.S. Department of Health and Human Services (“HHS”) had levied against the University of Texas M.D. Anderson Cancer Center (“M.D. Anderson”) for violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act of 2009 (the “HITECH Act”).  Eye-popping penalty amounts for HIPAA and HITECH Act violations have picked up steam in recent years. However, the M.D. Anderson case is among the first such settlement to be litigated. The Fifth Circuit decision contains some critical takeaways as to key requirements under HIPAA and the enforcement actions available to HHS, and should be of particular interest to healthcare providers and also insurers writing cybersecurity policies.

In Tsao v. Captiva MVP Restaurant Partners, LLC, the Eleventh Circuit joined the federal appellate courts holding that a consumer’s exposure to a substantial risk of future identity theft, and efforts to mitigate the risk of future identity theft, are not sufficient to confer Article III standing. The decision highlights federal court’s struggle with the standing requirements in a data breach case, and possibly raises the likelihood that the U.S. Supreme Court will address the issue.