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HIMS

FTC suit, Hims files formal motion to dismiss all 9 charges

Sources (4)

For the first time since the FTC sued on 29 Jul, jointly with Utah and Los Angeles County, Hims has shown its hand in court. On 22 Oct it filed a motion in the federal court for the Northern District of California to dismiss all 9 charges (subscription billing, difficulty cancelling and sharing health data with advertising platforms).

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Judge Vince Chhabria has set a hearing for 7 Jan 2027. Of the four defences, the argument that the privacy policy disclosed that personal information may be provided to marketing and advertising partners will be especially hard to sustain for health data, since the FTC rejected blanket consent in both the GoodRx and BetterHelp cases. Hims set aside about $62.5 million for the FTC matter in Q2 yet chose to fight everything rather than settle. That points to a wide gap on the amount or on the remedial terms (especially the scope of any injunction). If an injunction restricts the use of health data for ad targeting, the damage to customer acquisition efficiency matters more than the fine. The hearing is no earlier than Jan 2027, so FTC uncertainty will run across at least two earnings reports, Q3 and Q4, while the securities class action (lead plaintiff deadline 2 Nov) hangs over the company at the same time.

Key evidence

  • On 22 Oct Hims filed a motion in the federal court for the Northern District of California to dismiss all 9 charges in the FTC's 29 Jul complaint (brought jointly with Utah and Los Angeles County): subscription billing, difficulty cancelling and sharing health data with advertising platforms. Judge Vince Chhabria has set a hearing for 7 Jan 2027 (sources: Bloomberg, MLex summary of court filings, Quiver, 22 Oct).
  • The company makes four defences. (1) Privacy: users had to confirm the privacy policy when signing up, and the policy states in plain words that personal information, including sensitive information, may be provided to marketing and advertising partners. (2) Subscriptions: instalment payments under fixed-term contracts, as the company historically offered them, are not automatic renewal charges as federal law defines them. (3) Disclosure: the checkout page states the recurring prescription charge (for example $147 every 90 days). (4) Cancellation: customers have always been able to cancel by phone, email or chat, and a fuller online cancellation option has been available since April 2023. The company also says the regulators have not shown any basis for fines and an injunction.
  • In both the GoodRx and BetterHelp cases, the FTC rejected the idea that blanket consent of the 'it is in the privacy policy' kind covers health data.
  • The company set aside about $62.5 million for the FTC matter in Q2 and still chose to contest everything rather than settle.
  • If the scope of an injunction restricts the use of health data for ad targeting, the damage to customer acquisition efficiency would be greater than the fine itself.
  • The hearing cannot come before Jan 2027, so FTC uncertainty will run across at least two earnings reports: Q3 (due 9 Nov) and Q4.
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  • The lead plaintiff deadline in the securities class action is 2 Nov (pending alongside the FTC suit).
  • The rest is law-firm solicitation and the recirculation of already published items on Germany and testosterone. SEC EDGAR shows no new company filings.

Catalysts to watch

  • 2 Nov: lead plaintiff deadline in the securities class action
  • 9 Nov: Q3 2026 results (whether legal costs and provisions change, and whether the marketing expense ratio rises because of compliance remediation)
  • 7 Jan 2027: hearing on the motion to dismiss the FTC case

Risks

  • The bar for dismissal is high, and filing the motion is not the same as winning. The 'blanket consent' defence is especially hard to sustain for health data given the FTC's GoodRx and BetterHelp precedents
  • If an injunction restricts the use of health data for ad targeting, the hit to customer acquisition efficiency matters more than a fine
  • Fighting on every front despite the $62.5 million set aside in Q2 suggests a wide gap to a settlement, and the bargaining over remedial terms (especially the scope of any injunction) is escalating
  • FTC uncertainty runs across the Q3 and Q4 earnings reports, and with the securities class action's lead plaintiff deadline on 2 Nov on top, legal risk stays unresolved
  • If the court accepts the 'blanket consent' in the privacy policy, it could become a positive precedent. If it is rejected, the customer acquisition model faces a rebuild

Sources 4

  1. Bloomberg summary of court filings, 22 Oct
  2. MLex summary of court filings, 22 Oct
  3. Quiver, 22 Oct
  4. Motion filed in the federal court for the Northern District of California (Judge Chhabria, hearing on 7 Jan 2027)

A brief is a lead for our research, not a verified conclusion or advice.