A New York federal district court has denied the motion filed by two merchant cash advance providers and their chief executive officer and president to dismiss the FTC’s lawsuit alleging they engaged in unfair and deceptive conduct in violation of Section 5 of the FTC Act.

The court’s order stated only the following: “Motion denied substantially for reasons stated by Plaintiff.”

In its opposition to the motion, the FTC asserted that it had plausibly alleged that the defendants were violating or about to violate the FTC Act at the time it filed the lawsuit, had alleged facts sufficient to state a claim for deception and unfairness under the FTC Act, and had alleged facts sufficient for individual liability.

As we have previously observed, the lawsuit is a reminder that the FTC Act applies to business-to-business (B to B) activity, including small business financing, and not just business-to-consumer transactions.