MGM Resorts Sues FTC, Claiming Due Process Violation in Probe of 2023 Cyberattack
MGM Resorts International has filed a lawsuit against the Federal Trade Commission and its Chairwoman Lina M. Khan, claiming the agency violated the company’s Fifth Amendment rights during an investigation into a September 2023 cyberattack, according to a Las Vegas Review-Journal report.
The four-count lawsuit, filed in U.S. District Court for the District of Columbia, alleges the FTC failed to follow its own conflict-of-interest guidelines. It seeks an injunction to stop the FTC’s civil investigative demand (CID) into the MGM cyberattack unless Khan recuses herself.
According to the lawsuit, Khan and a senior aide were guests at the MGM Grand in Las Vegas on Sept. 12, 2023 as the cyberattack — which cost the company an estimated $100 million — was unfolding.
“MGM’s misfortune that day was compounded by the presence of a powerful public figure at its Las Vegas hotel during the attack,” the lawsuit states.
The lawsuit claims Khan’s presence and subsequent questions about MGM’s data security during the incident have created a conflict of interest. It alleges the FTC’s CID, issued four months later on Jan. 25, closely mirrors Khan’s personal experience at the MGM Grand.
“The voluminous requests posed by the CID closely track the events involving Chair Khan, with certain requests seemingly derived directly from Chair Khan’s personal experience in transacting business with MGM during the attack,” the lawsuit claims.
Not quashed
MGM petitioned to quash or modify the CID and sought Khan’s recusal from the proceedings, but the FTC denied both requests on April 1. The company argues this violates its Fifth Amendment right to due process.
The lawsuit also challenges the FTC’s rules on commissioner recusal, stating the “categorical refusal to hear petitions to recuse or disqualify — even in extreme cases like this one — violates the Due Process Clause.”
MGM is seeking an injunction to stop the FTC investigation unless Khan recuses herself, as well as reimbursement of court costs and other damages.
The FTC declined to comment on the lawsuit.
MGM Resorts International, which owns 10 casinos in Las Vegas and seven more across the U.S., had to shut down parts of its operations last September due to an attack on the company’s computer systems.
It took the better part of a week to get under control, with the company’s website being unavailable for a period of time. Impacts varied across its properties, with issues such as ATMs going down, slot machines becoming unavailable, and hotel keys not working.
Photo: Getty Images.
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