Legal Library: Cases and Proceedings

The FTC alleged that Twitter’s deceptive use of user email addresses and phone numbers violated the FTC Act and the 2011 Commission order.

Publishers Business Services, Inc., along with other defendants previously settled FTC allegations that the defendants deceptively telemarketed magazine subscriptions. The defendants also allegedly harassed consumers at work and at home, in an attempt to get them to pay for the subscriptions, and engaged in other threatening conduct over the phone. In May 2022, the Commission announced a settlement of the monetary component of the order.

In May 2022, the FTC took action against R360 LLC and its owner, Steven Doumar, for deceiving people seeking help for addiction about the evaluation and selection criteria for the treatment centers in their network. The case is the FTC’s first under the Opioid Addiction Recovery Fraud Prevention Act of 2018. The agency secured a $3.8 million civil penalty judgment against the defendants and an order prohibiting them from continuing to make the same kinds of misrepresentations.

The Federal Trade Commission, working jointly with the U.S. Department of Justice, is mailing 1,179,803 refund checks totaling more than $505 million to people who were deceived by a massive payday lending scheme operated by AMG Services, Inc. and Scott A. Tucker.

Everalbum settled Federal Trade Commission allegations that it deceived consumers about its use of facial recognition technology and its retention of photos and videos of users who deactivated their accounts.

Multi-level marketer AdvoCare International, L P and its former chief executive officer agreed to pay $150 million and be banned from the multi-level marketing business to resolve Federal Trade Commission charges that the company operated an illegal pyramid scheme that deceived consumers into believing that they could earn significant income as "distributors" of its health and wellness products. Two top promoters also settled charges that they promoted the illegal pyramid scheme and misled consumers about their income potential, agreeing to a multi-level marketing ban and a judgment of $4 million that will be suspended when they surrender substantial assets.

In October 2017, a federal district judge issued an order finding several defendants, including repeat offender Jared Wheat, in contempt for violating previous court orders related to the sale of weight-loss dietary supplements. The order imposed a more than $40 million judgment against the defendants, part or all of which the FTC may use to provide refunds to deceived consumers who bought the products. In May 2020, the Commission announced that it was mailing refunds totaling more than $8.5 million to defrauded consumers.

The Department of Justice filed a civil penalties complaint alleging that Lithionics Battery, LLC ("Lithionics") and Steven Tartaglia violated Section 5(a) of the FTC Act, 15 U.S.C. § 45(a) and violated the Made in USA Labeling Rule, 16 C.F.R. Part 323 (the “MUSA Labeling Rule”), in connection with the labeling and advertising of certain battery systems containing significant imported content as “Made in USA." The complaint further alleges that Lithionics' expressed or implied representations that its products are all or virtually all made in the United States are false or unsubstantiated. 

The FTC sued VoIP service provider VoIP Terminator, Inc., a related company, and the firms’ owner for assisting and facilitating the transmission of millions of illegal prerecorded telemarketing robocalls, including those they knew or should have known were scams, to consumers nationwide. Many of the calls originated overseas, and related to the COVID-19 pandemic, with the defendants allegedly failing to act as a gatekeeper to stop them from entering the country. The proposed consent order bars the defendants from the allegedly illegal conduct.

Clarence L. Werner, founder of the Omaha, Nebraska-based truckload carrier Werner Enterprises, Inc. will pay a $486,900 civil penalty to settle charges that certain of his acquisitions of company stock while he was a director of the company violated the Hart-Scott-Rodino Act. The HSR Act requires companies and individuals to report stock purchases over a certain threshold to the FTC and DOJ and wait before closing the transaction so that the federal agencies can investigate the potential competitive impact of the acquisition. Smaller transactions may also be reportable under the Act due to the need to aggregate the new purchase with all current holdings.

The FTC sued Kohl’s, Inc. and Walmart, Inc. for falsely marketing dozens of rayon textile products as bamboo. Both companies also are charged with making deceptive environmental claims, touting that the “bamboo” textiles were made using ecofriendly processes, while in reality converting bamboo into rayon requires the use of toxic chemicals and results in hazardous pollutants. The court orders settling the complaint require the companies to stop making deceptive green claims or using other misleading advertising, and pay penalties of $2.5 million and $3 million, respectively.

The FTC’s October 2018 complaint against Redwood Scientific charged the defendants with a scheme that used illegal robocalls to deceptively market dissolvable oral film strips as effective smoking cessation, weight-loss, and sexual-performance aids. Announced in June 2019 as part of a crackdown on illegal robocalls against operations around the country responsible for more than one billion calls, an initial  settlement resolved the FTC’s charges against one defendant in the Redwood Scientific case, Danielle Cadiz. The order permanently banned Cadiz from all robocall activities, including ringless voicemails, and imposes a judgment of $18.2 million against Cadiz. In March 2022, the FTC announced the final court orders against all remaining defendants.