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Power in Numbers: Insight Into State AG/FTC Collaborations


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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.

Published in: Business
  • Hands-down the best session I attended at Affiliate Summit. Very useful for understanding compliance with the AG and FTC. Plus @UnsubCentral can help with the CAN-SPAM part!
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Power in Numbers: Insight Into State AG/FTC Collaborations

  1. 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
  2. 2. Speakers
  3. 3. The FTC’s Mission P (202) 524-4145 / FTC’s “Bread and Butter” Mission Falls Primarily Into Three Categories: 1. Fighting Fraud 2. Stopping Deceptive Advertising 3. Protecting Consumer Privacy
  4. 4. What’s In The FTC’s Arsenal? P (202) 524-4145 / 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
  5. 5. The FTC’s Most Powerful Weapon P (202) 524-4145 / 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”
  6. 6. What Constitutes “Unfair” Acts Or Practices? P (202) 524-4145 / 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.
  7. 7. What Constitutes “Deceptive” Acts Or Practices? P (202) 524-4145 / 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.
  8. 8. FTC Act – Enforcement P (202) 524-4145 / 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
  9. 9. “Mini-FTC Act” P (202) 524-4145 / 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.
  10. 10. Role of State Attorney Generals P (202) 524-4145 /  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”
  11. 11. Election Vs. Appointment Of AGs P (202) 524-4145 /  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)
  12. 12. National Association Of Attorney Generals (NAAG) P (202) 524-4145 /  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
  13. 13. FTC’s Joint Mission With State AGs P (202) 524-4145 /  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
  14. 14. Triggers For Investigation P (202) 524-4145 / Consumer Complaints Industry-Wide Sweeps Competitors Monitoring/ “Surf” Days Media Stories
  15. 15. Why The Rise In Collaborations? P (202) 524-4145 / POWER IN NUMBERS!  Availability of Civil Penalties Under State Law  Information Sharing  Broad Investigative Authority  Pooling of Resources
  16. 16. FTC/STATE AG COLLABORATIONS – CASE STUDY #1 P (202) 524-4145 /
  17. 17. FTC/STATE AG COLLABORATIONS – CASE STUDY #2 P (202) 524-4145 /
  18. 18. FTC/STATE AG COLLABORATIONS – CASE STUDY #3 P (202) 524-4145 /
  19. 19. FTC/STATE AG COLLABORATIONS – CASE STUDY # P (202) 524-4145 /
  20. 20. FTC/STATE AG COLLABORATIONS – CASE STUDY #5 P (202) 524-4145 /
  21. 21. Lessons From Recent Enforcement Actions P (202) 524-4145 / Respond Re-Evaluate Train Monitor Maintain
  22. 22. When A CID Issues P (202) 524-4145 /  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.
  23. 23. Navigating The CID Response P (202) 524-4145 / Read Thoroughly Preserve Immediately Negotiate Carefully Maintain Confidentiality Produce Cautiously Choose Wisely
  24. 24. Getting To Settlement P (202) 524-4145 / Pre/Post-Litigation Timing Monetary/Injunctive Relief Settlement Documents
  25. 25. www.ifrahlaw.comP (202) 524-4145 / Rachel Hirsch Twitter: @TheRealMsHirsch Blog: Lori Kalani Twitter: @lorikalani Michael C. Turpen Twitter: @MikeCTurpen Questions?
  26. 26. www.ifrahlaw.comwww.ifrahlaw.comP (202) 524-4145 / THANK YOU!