The Court of Appeals for the Seventh Circuit has largely upheld an appeal in favor of the Federal Trade Commission that may wrap up a case that has been in the courts for more than six years including a trip to the Supreme Court and deals with how the regulator assesses fines for violations of federal law.
A copy of the ruling in the case of Federal Trade Commission v. Credit Bureau Center and Michael Brown can be accessed by clicking here.
The FTC sued the defendants for violating Section 13(b) of the Federal Trade Commission Act, accusing the defendants of violating consumer protection statutes and engaging in deceptive acts. The defendants allegedly marketed free credit reports and scores while simultaneously enrolling individuals in a monthly credit monitoring service. The individuals were notified of their enrollment via a letter that was sent after the enrollment had already taken place. A District Court judge granted summary judgment for the FTC and ordered the defendants to pay $5.3 million in restitution. The defendants appealed the decision to the Seventh Circuit and the Court overturned the lower court’s ruling, determining that Section 13(b) of the FTC Act does not authorize an award of restitution. The case was appealed to the Supreme Court and it agreed with the Seventh Circuit.
The case was sent back to the District Court and the FTC asked the judge to impose the restitution award under Section 19 of the FTC Act instead, which it did. That decision was what was appealed to the Seventh Circuit and it ruled that the plaintiff’s arguments were “mostly meritless.”
While making one small change to the lower court’s ruling, the Seventh Circuit upheld everything else, noting that Section 19 of the FTC Act “permits all forms of redress to make consumers whole, including ‘the refund of money,’ ” the Appeals Court wrote. “Accordingly, the amended monetary award appropriately refunds to customers the amount that has not yet been returned by Brown or his coconspirators.”
