Last week, the FTC filed an administrative complaint against Fleetcor Technologies, a marketer of fuel cards, and its CEO in which the FTC alleges that the respondents violated the FTC Act’s prohibition on unfair or deceptive acts or practices. The complaint’s allegations mirror those in the lawsuit filed by the FTC against the respondents in 2019 in an Atlanta federal district court.
The FTC brought the 2019 lawsuit under Section 13(b) of the FTC Act and the relief sought included restitution, refunds, and disgorgement. In April 2021, the U. S. Supreme Court ruled in AMG Capital Management LLC v. FTC that Section 13(b) does not authorize the FTC to seek, and a court to award, monetary relief such as restitution or disgorgement. In May 2021, the defendants in the Section 13(b) lawsuit moved for summary judgment on the theory that the FTC was not entitled to equitable monetary relief.
After filing the administrative complaint, the FTC filed a motion with the Atlanta federal district to stay the Section 13(b) lawsuit pending resolution of the administrative action or, in the alternative, to dismiss the lawsuit without prejudice. In the motion, the FTC states that it filed the administrative action to preserve the possibility of obtaining monetary relief for injured consumers since, as a result of AMG Capital Management, it is no longer able to obtain such relief in actions brought under Section 13(b).
The administrative action was brought under Section 5(b) of the FTC Act. If the FTC successfully establishes the respondents’ UDAP liability in the administrative action (and any appeals), it can then seek monetary relief in federal district court pursuant to Section 19(a)(2). In the stay motion, the FTC states that upon the resolution of the administrative action, it will move to amend its complaint to include a new claim for monetary relief under Section 19(a)(2) or dismiss the proceedings. The FTC also states that because it would otherwise face a three-year statute of limitations for monetary relief from the date the administrative action was filed, a stay would preserve its ability to obtain the full amount of relief to which the defendants’ customers would be entitled if not for the SCOTUS decision.
The FTC’s decision to file an administrative action is consistent with our prediction following AMG Capital Management that the FTC would increase its use of administrative proceedings. We also continue to expect the SCOTUS decision to result in greater collaboration between the FTC and the CFPB in bringing enforcement actions for unfair or deceptive acts or practices against non-banks as to whom both agencies have enforcement jurisdiction. In contrast to the FTC, the CFPB has broad authority under the Consumer Financial Protection Act to obtain all forms of monetary relief and civil money penalties.