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Power in Numbers: Insight Into State AG/FTC Collaborations
This presentation is from Affiliate Summit East 2016 (July 31-August 2, 2016 in New York City, NY). Session description: A rare look from a panel of state AG senior staff and attorneys into how states and the FTC decide to work together vs. “going it alone,” and what lessons can be learned from these collaborations.
This presentation is from Affiliate Summit East 2016 (July 31-August 2, 2016 in New York City, NY). Session description: A rare look from a panel of state AG senior staff and attorneys into how states and the FTC decide to work together vs. “going it alone,” and what lessons can be learned from these collaborations.
Power in Numbers: Insight Into State AG/FTC Collaborations
1.
www.ifrahlaw.comP (202) 524-4145 /
Power in Numbers:
Insight Into State AG/FTC Collaborations
Affiliate Summit East Conference: August 1, 2016
Rachel Hirsch, Senior Associate
Lori Kalani, Co-Chair State AG Group
Michael C. Turpen, Shareholder
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The FTC’s Mission
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FTC’s “Bread and Butter” Mission Falls Primarily Into Three Categories:
1. Fighting Fraud
2. Stopping Deceptive Advertising
3. Protecting Consumer Privacy
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What’s In The FTC’s Arsenal?
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The FTC Enforces Consumer Protection Statutes, Including:
Fair Credit Reporting Act
Fair Debt Collection Practices Act
Federal Trade Commission Act
Gramm-Leach-Bliley Act
Lanham Trade-Mark Act
CAN-SPAM Act
Telemarketing And Consumer
Fraud And Abuse Act
Truth in Lending Act
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The FTC’s Most Powerful Weapon
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The Most Powerful Weapon The FTC Uses To Combat Consumer Fraud
Section 5(a) Of The Federal Trade Commission Act
Prohibits “Unfair Or Deceptive Acts Or Practices In Or Affecting Commerce”
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What Constitutes “Unfair” Acts Or Practices?
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An Act Or Practice Is “Unfair” Where It
• Causes Or Is Likely To Cause Substantial Injury To Consumers;
• Cannot Be Reasonably Avoided By Consumers; And
• Is Not Outweighed By Countervailing Benefits To Consumers Or To
Competition.
Public Policy (As Established By Statute), Regulation, Or Judicial
Decisions May Be Considered.
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What Constitutes “Deceptive” Acts Or Practices?
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An Act Or Practice Is Deceptive Where
• A Representation, Omission, Or Practice Misleads Or Is Likely To
Mislead The Consumer;
• A Consumer’s Interpretation Of the Representation, Omission, Or
Practice Is Considered Reasonable Under The Circumstances;
And
• The Misleading Representation, Omission, Or Practice Is
Material.
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FTC Act – Enforcement
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Statutory Right To Obtain Temporary Restraining Order & Preliminary
Injunctions Against Any Person, Corporation, Or Partnership That Is
Violating/About To Violate Any Law Enforceable By The FTC If The FTC Believes
It To Be In the Public Interest.
Requires Standard Balancing Of Equities, Consideration of FTC’s
Likelihood of Success.
Permits Courts To Exercise All Ancillary Equitable Powers In Action For
An Injunction, Including:
• Asset Freezes
• Appointment of Receivers
• Restitution And Other Relief
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“Mini-FTC Act”
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Each Of The 50 States Has Its Own Version Of the FTC Act – Collectively
Known As The “Little Acts.”
Generally Tailored To Meet Specific Policy Preferences Of Each
Particular State.
Usually Applied To State-Specific Matters, While FTC Act Used To
Regulate Broader Consumer Protection Issues On National Scale.
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Role of State Attorney Generals
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Moving Force Behind All Multi-State Investigations
Akin To Managing Partner Of Law Firm
Enforcement Arm Of State For Consumer Protection
Broad Discretion To Pursue Matters Of “Public Interest”
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Election Vs. Appointment Of AGs
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Popularly Elected In 43 States (Including CA), Guam, D.C.
Appointed By Governor In 5 States (AK, HI, NH, NJ, WY), 4 Jurisdictions
(American Samoa, Northern Mariana Islands, Puerto Rico, Virgin
Islands)
Selected By Secret Ballot Of Legislature (ME)
Selected By State Supreme Court (TN)
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National Association Of Attorney Generals
(NAAG)
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Mission: “To Facilitate Interaction Among Attorneys General As Peers
And To Facilitate The Enhanced Performance Of Attorneys General And
Their Staffs.”
Membership: Attorneys General Of The 56 States And Territories
Key Projects:
• Antitrust
• Bankruptcy
• Civil Rights
• Consumer Protection
• Criminal Law
• Cybercrime
• Environment
• Legislation
• Medicaid Fraud
• Supreme Court
• Tobacco
• Violence Against Women
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FTC’s Joint Mission With State AGs
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Joint Investigations And Enforcement
• Robocalls
• Timeshare Resale Fraud
• Weight Loss Scams
• Mortgage Rescue Scams
• Business Opportunity Schemes
Education And Outreach
• National Consumer Protection Week
• Military Consumer Protection Week
Sharing Consumer Complaints
• Access To FTC Sentinel Database
Holding Common Ground Events And Working Together Through Task
Forces And Working Groups
Charities
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Triggers For Investigation
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Consumer Complaints Industry-Wide Sweeps
Competitors
Monitoring/ “Surf” Days
Media Stories
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Why The Rise In Collaborations?
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POWER IN NUMBERS!
Availability of Civil Penalties Under State Law
Information Sharing
Broad Investigative Authority
Pooling of Resources
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FTC/STATE AG COLLABORATIONS –
CASE STUDY #1
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FTC/STATE AG COLLABORATIONS –
CASE STUDY #2
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FTC/STATE AG COLLABORATIONS –
CASE STUDY #3
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FTC/STATE AG COLLABORATIONS –
CASE STUDY #
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FTC/STATE AG COLLABORATIONS –
CASE STUDY #5
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Lessons From Recent Enforcement Actions
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Respond
Re-Evaluate
Train
Monitor
Maintain
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When A CID Issues
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Call A Lawyer.
Preserve Your Documents.
• When You Receive A CID/Subpoena, All Relevant Documents And Electronic
Information Must Be Preserved Through A Legal Hold.
• Make A Concerted Effort To Identify Key Employees And Systems Using Storing
Information.
• Have Lawyers Draft a Legal Hold That Clearly Defines The Information That
Must Be Preserved.
• Hold Should Be Issued To A Carefully Identified Group of Employees That May
Have Knowledge Of The Potentially Responsive Information.
• Revisit Hold On A Regular Basis.
Failure To Implement An Adequate And Timely Legal Hold May Result In
Sanctions.
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Navigating The CID Response
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Read Thoroughly
Preserve Immediately
Negotiate Carefully
Maintain Confidentiality
Produce Cautiously
Choose Wisely
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Getting To Settlement
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Pre/Post-Litigation Timing
Monetary/Injunctive Relief Settlement Documents
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www.ifrahlaw.comP (202) 524-4145 /
Rachel Hirsch
rhirsch@ifrahlaw.com
Twitter: @TheRealMsHirsch
Blog: www.ftcbeat.com
Lori Kalani
lkalani@cozen.com
Twitter: @lorikalani
Michael C. Turpen
Mturpen@riggsabney.com
Twitter: @MikeCTurpen
Questions?