Legal Library: Cases and Proceedings

The Federal Trade Commission has issued a proposed order to settle charges that online counseling service BetterHelp revealed consumers’ sensitive data with third parties such as Facebook and Snapchat for advertising after promising to keep such data private.

The Federal Trade Commission is taking action against payment processing company BlueSnap, Inc., along with its former CEO Ralph Dangelmaier and senior vice president Terry Monteith, charging them with knowingly processing payments for deceptive and fraudulent companies. The defendants have agreed to a settlement that will require them to turn over $10 million for consumers and stop processing payments for certain high-risk clients.

In a federal court complaint, the FTC charged that BlueSnap and its officers processed millions of dollars in credit card payments for ACRO Services despite substantial evidence that the company was fraudulent. The FTC sued ACRO Services in November 2022.

The Federal Trade Commission alleged Elite IT Partners, Inc. and its founder, President and CEO James Martinos settled FTC allegations that they tricked consumers into believing their computers were infected with viruses in order to sell them costly computer repair services. 

In April 2018, the FTC announced a consent order against the ringleader of an operation that lured people into an expensive negative-option scam using a low-cost “trial” offer for tooth whiteners and other products is banned from negative-option sales under a settlement with the Federal Trade Commission. The settlement order is one of three orders resolving FTC charges against Blair McNea, Jennifer Johnson, Danielle Foss and 59 corporate defendants. In April 2023, the Commission announced it was sending more than $1.1 million to consumers defrauded by the scheme.

The FTC is suing Endo Pharmaceuticals, Inc., Endo International plc, Impax Laboratories, LLC, and Impax’s owner, Amneal Pharmaceuticals, Inc., alleging that a 2017 agreement between Endo and Impax violated the antitrust laws by eliminating competition in the market for oxymorphone ER. The complaint charges the defendants with violating Sections 1 and 2 of the Sherman Act, which constitutes unfair methods of competition in violation of Section 5 of the FTC Act. Specifically, Endo, Impax, and Amneal are charged with entering into an illegal agreement in restraint of trade, and Amneal is charged with monopolization of the oxymorphone ER market. The complaint was filed in the U.S. District Court for the District of Columbia on Jan. 25, 2021.

The Federal Trade Commission sued Superior Products International II, Inc., and its principal Joseph Pritchett, alleging they make false or unsubstantiated R-value and energy savings claims about their architectural coatings products. In July 2020, the FTC sued four companies that sell paint products used to coat buildings and homes, alleging that they deceived consumers about their products’ insulation and energy-savings capabilities. In complaints filed in federal court, the FTC charged that the companies falsely overstated the R-value ratings of the coatings, making deceptive statements about heat flow and insulating power.  The FTC announced a summary judgment against the defendants in November 2022.

The FTC imposed strict limits on JAB Consumer Partners’ future acquisitions of specialty and emergency veterinary clinics as a condition of JAB’s proposed $1.65 billion acquisition of VIPW, LLC, the parent of Ethos, an owner and operator of specialty and emergency veterinary clinics. The Commission alleged that the acquisition was likely to be anticompetitive in four geographic markets, ordering divestitures for various types of veterinary care in and around Richmond, Virginia, in and around the Washington DC Metro Area, particularly for customers to the southeast in Virginia and Maryland, in and around Denver, Colorado, and in and around downtown San Francisco, California. The Commission finalized the order in October 2022.

The Federal Trade Commission required energy pipeline and storage companies Buckeye Partners, L.P. and Magellan Midstream Partners, L.P. to divest to U.S. Venture, Inc. petroleum terminals in the two states as a condition of Buckeye’s $435 million proposed acquisition of 26 Magellan terminals. The complaint alleged that without a remedy, the acquisition would harm competition for terminaling services both for all LPPs, and for gasoline specifically, in North Augusta, South Carolina; Spartanburg, South Carolina; and Montgomery, Alabama. The complaint alleged that in all three geographic markets, the acquisition would eliminate the close competition between Buckeye and Magellan, increase the likelihood of collusive or coordinated interaction between the remaining competitors, reduce the number of terminaling options for third-party customers, and increase prices for terminaling services. On Aug. 9, 2022, the Commission announced the final consent agreement in this matter.

The Federal Trade Commission imposed strict limits on JAB Consumer Partners’ future acquisitions of specialty and emergency veterinary clinics as a condition of JAB’s proposed $1.1 billion acquisition of specialty and emergency veterinary services provider SAGE Veterinary Partners, LLC. The Commission also alleged that the acquisition was likely to be anticompetitive in three geographic markets, ordering divestitures for various types of veterinary care in and around Austin, Texas, in and around San Francisco, California, and in and between Oakland, Berkeley, and Concord, California, and it ordered divestitures in these market.  On Aug. 5, 2022, the Commission announced the final consent agreement in this matter.

As a condition of Hikma Pharmaceuticals PLC’s $375 million acquisition of generic drug services company Custopharm, Inc., the Federal Trade Commission required Custopharm’s parent company, private equity fund Water Street Healthcare Partners, LLC to retain and transfer Custopharm’s assets related to the corticosteroid drug triamcinolone acetonide, or TCA, to another company Water Street owns, Long Grove Pharmaceuticals, LLC. According to the complaint, absent a remedy, Hikma likely would have stopped developing its injectable TCA product, forestalling the increased price competition it would have brought to the market. Thus without this remedy, the acquisition likely would have harmed future competition in the U.S. market for injectable triamcinolone acetonide.

The Federal Trade Commission has required Prince International Corp. and Ferro Corp. to divest three facilities used to make porcelain enamel frit, glass enamel, and forehearth colorants, as a condition of Prince’s parent company – American Securities Partners VII, L.P. – acquiring competitor Ferro Corp. for $2.1 billion.  According to the complaint, the acquisition as proposed likely would allow the merged firm to unilaterally raise prices for porcelain enamel frit in the North American market, and for forehearth colorants in the world market. It  also would eliminate Prince as an independent competitor in the world market for glass enamel, increasing the likelihood of coordination between the merged firm and its largest competitor, Fenzi Holdings SPV S.p.A. On July 5, 2022, the Commission announced the final consent agreement in this matter.

In December 2018, the Federal Trade Commission announced that the operators of Florida-based student loan debt relief scheme Student Debt Doctor are banned from the debt relief business as part of agreements settling allegations that they collected illegal upfront fees and falsely promised to help some consumers enroll in government programs that would reduce or forgive their student loan debt. In June 2022, the agency announced that it is sending 22,817 checks totaling more than $2 million to borrowers who lost money to the scheme.

The Federal Trade Commission sued SPM Thermo-Shield, Inc., and its principals Peter J. Spiska, and George P. Spiska, alleging they make false or unsubstantiated R-value and energy savings claims about their architectural coatings products. In July 2020, the FTC sued four companies that sell paint products used to coat buildings and homes, alleging that they deceived consumers about their products’ insulation and energy-savings capabilities. In complaints filed in federal court, the FTC charged that the companies falsely overstated the R-value ratings of the coatings, making deceptive statements about heat flow and insulating power. The FTC announced a summary judgment ending the litigation in June 2022.

The owners and operators of a vast payday lending scheme that overcharged consumers millions of dollars will be permanently banned from the lending industry under the terms of a settlement with the Federal Trade Commission. The settlement also provides that nearly all outstanding debt—made up entirely of illegal finance charges—held by the company will be deemed as paid in full.

The FTC charged the enterprise with deceptively overcharging consumers millions of dollars and withdrawing money repeatedly from consumers’ bank accounts without their permission.

The Federal Trade Commission is sending 26,698 checks totaling more than $970,000 to consumers who were harmed by a deceptive payday lending scheme that operated under the names Harvest Moon Financial, Gentle Breeze Online, and Green Stream Lending.