WASHINGTON (Legal Newsline) - The FTC is using unfair tactics to target MGM after a cyberattack that occurred while Chair Lina Khan was at one of its Las Vegas properties, the company says in a new lawsuit while it also faces more than a dozen private class actions.
MGM Resorts International has filed a lawsuit against the Federal Trade Commission and Khan, accusing them of depriving MGM of its fundamental rights. The case, filed by Brian Boyle and other lawyers at DLA Piper, is rooted in a cyberattack on MGM in September 2023 that forced the company to run its business without IT systems temporarily.
The attack had significant financial implications for MGM, and the company is cooperating with the FBI to bring those responsible to justice, it says. The situation was exacerbated when Khan and an unnamed senior aide were guests at one of MGM's Las Vegas properties during the attack.
Reports claim that Khan was asked to write her credit card information on paper due to the incapacitated IT systems.
Following this incident, the FTC launched an investigation into MGM's data security practices. The FTC issued a Civil Investigative Demand (CID) seeking more than 100 categories of information from MGM.
The casino operator alleges that some requests appear directly derived from Khan's personal experience during the attack.
"As the most high-profile person involved in the events at issue - and the only such person widely identified by name in press reports - Chair Khan is both a potential civil plaintiff and a potential witness," the lawsuit says.
MGM, which faces 15 private class actions, on Feb. 20 moved to quash the FTC's CID, plus a petition to disqualify Khan because of her personal involvement in the matter.
Of course, the full FTC denied both, which MGM said unlawfully deprived it of its Fifth Amendment rights.
"The order relies on the Commission's position that its Rules of Practice do not allow for recusal of Commissioners except from administrative litigation," the suit says.
"As a result, in cases like this one, the Commission refuses to entertain petitions to recuse Commissioners from other aspects of FTC proceedings, such as ruling on Petitions to Quash.
"This categorical refusal to hear petitions to recuse or disqualify - even in extreme cases like this one - violates the Due Process Clause of the Fifth Amendment."
MGM calls it a "pattern of unconstitutional conduct."