Legal Library: Cases and Proceedings

Flo Health has settled Federal Trade Commission allegations that the company shared health information of its users with outside data analytics providers after promising such information would be kept private.

Career Education Corporation (CEC) and its subsidiaries, American InterContinental University, Inc., AIU Online, LLC, Marlin Acquisition Corporation, Colorado Technical University, Inc., and Colorado Tech., Inc. (collectively, CEC), has been ordered to pay $30 million to the FTC to settle Federal Trade Commission charges that the operator used sales leads from lead generators that falsely told consumers they were affiliated with the U.S. military, and that used other unlawful tactics to generate leads. CEC’s lead generators also induced consumers to submit their information under the guise of providing job or benefits assistance. The FTC also charged that CEC’s lead generators falsely told consumers that their information would not be shared, and that both CEC and its lead generators illegally called consumers registered on the National Do Not Call (DNC) Registry.

The Federal Trade Commission is sending nearly $30 million in refunds to people tricked by agents working on behalf of Career Education Corporation (currently operating as Perdoceo Education Corporation), the operator of several post-secondary schools.

Casey’s General Stores, Inc., Buck’s Intermediate Holdings, LLC, and Steven Buchanan agreed to divest retail fuel assets in local gasoline and diesel fuel markets across two states to settle Federal Trade Commission charges that Casey’s proposed acquisition would violate federal antitrust law. The complaint alleges that the acquisition as proposed would harm competition for retail sale of gasoline in seven local markets in Nebraska and Iowa. Under the terms of the proposed consent order, Casey’s is required to divest six retail fuel outlets, three Casey’s outlets and three Bucky’s outlets, to Western Oil II, LLC and its affiliate Danco II, LLC within 10 days after Casey’s completes the acquisition. On June 9, 2021 the Commission announced the final consent agreement in this matter.

The Federal Trade Commission filed an administrative complaint and authorized a federal court lawsuit to block Illumina’s $7.1 billion proposed acquisition of Grail—a maker of a non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing. Illumina is the only provider of DNA sequencing that is a viable option for these multi-cancer early detection, or MCED, tests in the United States.

The complaint alleges the proposed acquisition will diminish innovation in the U.S. market for MCED tests, which could be used to detect up to 50 types of cancer. Most of these types of cancer are not screened for at all today, and the MCED test could save millions of lives around the world. The trial is scheduled to begin on Aug. 24, 2021. On May 20, 2021, the FTC authorized staff to dismiss its federal court complaint for Preliminary Injunction and Temporary Restraining Order.

Reckitt Benckiser Group plc has agreed to pay $50 million to settle Federal Trade Commission charges that it violated the antitrust laws through a deceptive scheme to thwart lower-priced generic competition to its branded drug Suboxone. According to the complaint, before the generic versions of Suboxone tablets became available, Reckitt and its former subsidiary Reckitt Benckiser Pharmaceuticals, now known as Indivior, Inc., developed a dissolvable oral film version of Suboxone and worked to shift prescriptions to this patent-protected film. Worried that doctors and patients would not want to switch to Suboxone Film, Reckitt allegedly employed a “product hopping” scheme where the company misrepresented that the film version of Suboxone was safer than Suboxone tablets because children are less likely to be accidentally exposed to the film product. Indivior has agreed to pay an additional $10 million to settle FTC charges. On May 10, 2021, the FTC announced that it sent nearly $60 million in payments to consumers who were victims of the scheme.

In April 2021, the FTC charged St. Louis-based chiropractor Eric Anthony Nepute and his company Quickwork LLC with violating the COVID-19 Consumer Protection Act and the Federal Trade Commission Act, by deceptively marketing products containing vitamin D and zinc as scientifically proven to treat or prevent COVID-19. This is the first such case in which the agency has sought civil penalties.

Online children’s education company Age of Learning, Inc., which operates ABCmouse, will pay $10 million and change its negative option marketing and billing practices to settle Federal Trade Commission charges that it made misrepresentations about cancellations and failed to disclose important information to consumers, leading tens of thousands of people to be renewed and charged for memberships without proper consent.  The complaint also alleges the Southern California-based company unfairly billed ABCmouse users without their authorization and made it difficult for consumers to cancel their memberships, preventing consumers from avoiding additional charges. In April 2021, the FTC announced it was sending $9.7 million in refunds to defrauded consumers.

The FTC's administrative complaint against Impax charges that in 2010, Impax and Endo Pharmaceuticals Inc. illegally agreed that Impax would not compete by marketing a generic version of Endo’s Opana ER until January 2013. In exchange, Endo paid Impax more than $112 million.

Endo agreed to settle these charges in a stipulated order entered in federal court. See FTC v. Allergan plc, and Watson Laboratories, Inc. et al.

The Commission’s 2019 opinion held that the FTC staff had proven that the agreement between Impax and Endo Pharmaceuticals Inc. violated Section 5 of the Federal Trade Commission Act. The Commission’s opinion reversed Chief Administrative Law Judge D. Michael Chappell’s initial decision.

In April 2021, the U.S. Court of Appeals for the Fifth Circuit upheld the Commission’s opinion.

Wine and spirits maker E. & J. Gallo Winery has agreed to divest several product lines and remove certain others from its asset purchase agreement with competitor Constellation Brands, Inc. to settle Federal Trade Commission charges that their proposed $1.7 billion transaction would violate federal antitrust law. The complaint alleges that unremedied, the proposed acquisition would eliminate head-to-head competition between Gallo and Constellation and thereby was likely to substantially lessen competition in the United States for six types of wine-and-spirits products: entry-level on-premise sparkling wine, low-priced sparkling wine, low-priced brandy, low-priced port, low-priced sherry, and high color concentrates.The FTC announced approval of the final order in April 2021.

The Federal Trade Commission, along with 46 agencies from 38 states and the District of Columbia, has stopped a massive telefunding operation that bombarded 67 million consumers with 1.3 billion deceptive charitable fundraising calls (mostly illegal robocalls). The defendants collected more than $110 million using their deceptive solicitations. Associated Community Services (ACS) and a number of related defendants have agreed to settle charges by the FTC and state agencies that they duped generous Americans into donating to charities that failed to provide the services they promised.

The FTC sued the operators of a mobile banking app, alleging that they falsely promised users high interest rates on their accounts and “24/7” access to their funds.