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Federal Trade Commission v. Credit Bureau Center, LLC

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Supreme Court of the United States
Federal Trade Commission v. Credit Bureau Center, LLC
Docket number: 19-825
Term: 2020
Court: United States Supreme Court
Important dates
N/A
Court membership
Chief Justice John G. Roberts • Clarence Thomas • Stephen Breyer • Samuel Alito • Sonia Sotomayor • Elena Kagan • Neil Gorsuch • Brett Kavanaugh • Amy Coney Barrett


Federal Trade Commission v. Credit Bureau Center, LLC. is a case scheduled for argument before the Supreme Court of the United States during the court's October 2020-2021 term. The case came on a writ of certiorari to the United States Court of Appeals for the 7th Circuit. It concerned the Federal Trade Commission Act and whether it authorizes the Federal Trade Commission to demand restitution.[1]

When the Supreme Court granted review in the case on July 9, 2020, the case was consolidated with AMG Capital Management, LLC v. Federal Trade Commission. On November 9, 2020, the cases were no longer consolidated and the court rescinded review of the case.[2] Click here to learn more about the case's background.

HIGHLIGHTS
  • The case: The Federal Trade Commission ("FTC") filed suit in district court against business owner Michael Brown and his companies, including Credit Bureau Center, LLC, for violating consumer-protection statutes in the Federal Trade Commission Act. The Northern District of Illinois entered a permanent injunction against the defendant and issued a relief order for restitution. On appeal, the 7th Circuit vacated the relief order and otherwise affirmed the Northern District of Illinois' judgment.
  • The issue: Whether Section 13(b) of the Federal Trade Commission Act authorizes district courts to enter an injunction that orders the return of unlawfully obtained funds.[3]
  • The outcome: The U.S. Supreme Court rescinded review of the case.


    • Click here to review the lower court's opinion.[4]

    Timeline

    The following timeline details key events in the case:


    Background

    Procedural background

    Michael Brown was the sole owner and operator of the credit-monitoring service Credit Bureau Center, collectively known as "Brown" in the proceedings. Brown's business websites offered a free credit report and free credit score and included smaller text stating that applying for the free information automatically enrolled customers in an unspecified membership subscription with a monthly cost of $29.94. The customers learned that the subscription was for Brown's credit-monitoring service upon receipt of a letter from Brown after they were automatically enrolled. One of Brown's contractors posted advertisements on classified advertisements web platform Craigslist for fake rental properties that told applicants to get a free credit score from Brown's service.[4]

    The FTC filed suit against Brown under Section 13(b) of the Federal Trade Commission Act with the U.S. District Court for the Northern District of Illinois, alleging that the websites violated several consumer-protection statutes. The FTC sought a permanent injunction and restitution. The district judge found that Brown was a principal for his contractor's fraudulent advertisement system and that the websites failed to meet some disclosure requirements in the Restore Online Shopper Confidence Act ("ROSCA").[5] The court entered a permanent injunction against Brown and issued a relief order of more than $5 million in restitution to the FTC.[4]

    On appeal, the 7th Circuit affirmed the Northern District of Illinois' decision to hold Brown liable for the contractor's advertisements posted on Craigslist and for cases in which his own websites did not meet the ROSCA disclosure requirements, and affirmed the district court's issuance of a permanent injunction. However, the 7th Circuit vacated the restitution award, holding that Section 13(b) does not authorize awards of relief through restitution.[4]

    The Federal Trade Commission petitioned the Supreme Court for review. The court granted review on July 9, 2020, and consolidated the case with AMG Capital Management, LLC v. Federal Trade Commission. On November 9, 2020, the cases were no longer consolidated and the court rescinded review of the case's merits.[2][1]


    Legal definitions

    Federal Trade Commission Act

    Section 13(b)

    Section 13 (b) of the Federal Trade Commission Act, 15 U.S.C. 53(b) reads:[6]

    “ (b) Temporary restraining orders; preliminary injunctions

    Whenever the Commission has reason to believe-

    (1) that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by the Federal Trade Commission, and
    (2) that the enjoining thereof pending the issuance of a complaint by the Commission and until such complaint is dismissed by the Commission or set aside by the court on review, or until the order of the Commission made thereon has become final, would be in the interest of the public-

    the Commission by any of its attorneys designated by it for such purpose may bring suit in a district court of the United States to enjoin any such act or practice. Upon a proper showing that, weighing the equities and considering the Commission's likelihood of ultimate success, such action would be in the public interest, and after notice to the defendant, a temporary restraining order or a preliminary injunction may be granted without bond: Provided, however, That if a complaint is not filed within such period (not exceeding 20 days) as may be specified by the court after issuance of the temporary restraining order or preliminary injunction, the order or injunction shall be dissolved by the court and be of no further force and effect: Provided further, That in proper cases the Commission may seek, and after proper proof, the court may issue, a permanent injunction. Any suit may be brought where such person, partnership, or corporation resides or transacts business, or wherever venue is proper under section 1391 of title 28. In addition, the court may, if the court determines that the interests of justice require that any other person, partnership, or corporation should be a party in such suit, cause such other person, partnership, or corporation to be added as a party without regard to whether venue is otherwise proper in the district in which the suit is brought. In any suit under this section, process may be served on any person, partnership, or corporation wherever it may be found.[7]

    		”
    —Federal Trade Commission Act

    Restore Online Shopper Confidence Act

    The following selection is sourced from the Federal Trade Commission:[5]

    “ This Act prohibits any post-transaction third party seller (a seller who markets goods or services online through an initial merchant after a consumer has initiated a transaction with that merchant) from charging any financial account in an Internet transaction unless it has disclosed clearly all material terms of the transaction and obtained the consumer's express informed consent to the charge. The seller must obtain the number of the account to be charged directly from the consumer.[7] ”
    —Federal Trade Commission

    Questions presented

    The petitioner presented the following questions to the court:

    Questions presented:
    • Whether §13(b) of the Federal Trade Commission Act, by authorizing "injunction[s]," also authorizes the Federal Trade Commission to demand monetary relief such as restitution–and if so, the scope of the limits or requirements for such relief.[3]

    Outcome

    The U.S. Supreme Court rescinded review of the case.[2]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 SCOTUSblog, "Federal Trade Commission v. Credit Bureau Center, LLC," accessed December 10, 2020
    2. ↑ 2.0 2.1 2.2 SCOTUSblog, "Justices grant new cases involving challenges to Social Security Administration judges," November 9, 2020
    3. ↑ 3.0 3.1 Supreme Court of the United States, "19-825 FTC v. Credit Bureau Center, LLC," accessed December 10, 2020
    4. ↑ 4.0 4.1 4.2 4.3 United States Court of Appeals for the 7th Circuit, Fed. Trade Comm'n v. Credit Bureau Ctr., LLC, decided August 21, 2019
    5. ↑ 5.0 5.1 Federal Trade Commission, "Restore Online Shoppers' Confidence Act," accessed July 13, 2020
    6. ↑ Casetext, "15 U.S.C. § 53," accessed December 10, 2020
    7. ↑ 7.0 7.1 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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