Legal Library: Cases and Proceedings

The FTC is mailing refund checks totaling more than $2.6 million to small businesses who lost money to a New York-based office supply scam operated by a business known as A-1 Janitorial.

LifeLock paid $100 million to settle Federal Trade Commission contempt charges that it violated the terms of a 2010 federal court order that requires the company to secure consumers' personal information and prohibits the company from deceptive advertising. 

Chemical companies Quaker Chemical Corp and Houghton International Inc. have agreed to divest assets to a subsidiary of French multinational corporation Total S.A., to settle Federal Trade Commission charges that Quaker’s proposed $1.4 billion acquisition of Houghton would violate federal antitrust law. According to the complaint, the proposed acquisition would harm competition in the North American market for aluminum hot rolling oil and associated technical support services; and in the North American market for steel cold rolling oils, and associated technical support services. Steel cold rolling oils include sheet cold rolling oil, pickle oil, and tin plate rolling oil. Under the proposed settlement agreement, Quaker must divest Houghton’s North American aluminum hot rolling oil and steel cold rolling oil product lines and related assets to Total. On Sept. 12, 2019, the FTC announced that it has approved a final order in this matter.

In December 2018, officers of a company that marketed and sold Nobetes, a pill they claimed treats diabetes, settled an FTC complaint alleging that the advertising claims for the product are false or unsubstantiated. The order settling the FTC’s complaint prohibits the company and its officers from undertaking future deceptive practices, including making unsubstantiated health claims, misleading consumers about the terms of “free trial” offers, billing consumers without their consent, and other practices related to the use of “expert” endorsements and consumer testimonials. In addition, it requires them to pay money to provide refunds to consumers who bought the product. In August 2019, the FTC returned $60,791 to these consumers.

The FTC is mailing 53,595 refund checks totaling $748,070 to consumers nationwide who signed up for an online auction kit that was supposed to be free, but wasn’t. The kit actually cost consumers up to $59.95 per month if they failed to cancel a trial membership in a business opportunity program called Online Supplier.

Canon Inc. and Toshiba Corporation have agreed to settle Federal Trade Commission charges that the companies violated the premerger notification and waiting period requirements of the Hart-Scott-Rodino Act, or HSR Act, when Canon acquired Toshiba Medical Systems Corporation from Toshiba in 2016.

Thomas Wells and his payment processing company, Priority Payout Corp. (formerly known as InterBill, Ltd), have agreed to settle FTC charges that they repeatedly violated a 2009 court order issued against them. The settlement permanently bans Wells and Priority Payout Corp, from engaging in, and assisting others with, payment processing, and includes a $1.8 million contempt judgment against them.

On 2/2/2009, the Commission filed a complaint in federal district court challenging and agreement between Solvay Pharmaceuticals and two generic drug manufacturers in which Solvay paid for the delayed release of generic equivalents to its own testosterone-replacement drug, AndroGel, typically used in the treatment of men with low testosterone levels due to advanced age, certain cancers, and HIV/AIDS. According to the Commission’s complaint, in an effort to prevent Watson Pharmaceuticals and Par Pharmaceuticals from acquiring patents for their competing testosterone replacement drugs, Solvay paid the companies to delay entry for a nine year period, ending in 2015. 

This case was transferred from the United States District Court for the Central District of California to the Northern District of Georgia.  The district court dismissed the Commission's complaint, and the Eleventh Circuit affirmed, holding that anticompetitive effects within the scope of patent protection are per se legal under the antitrust laws.

On 10/4/2012, the FTC filed a writ of certiorari to the Supreme Court.  On June 17, 2013, the Supreme Court reversed the 11th Circuit, rejecting the scope of the patent test and permitting antitrust review of reverse payment patent settlement agreements.

There are three related administrative proceedings:

• Watson Pharmaceuticals / Actavis Inc.
• Watson Pharmaceuticals, Inc., a corporation, and Robin Hood Holdings Limited, a limited liability company
• Watson Pharmaceuticals, Inc. and Andrx Corporation

The FTC's complaint alleges that Endo Pharmaceuticals Inc. and several other drug companies violated antitrust laws by using pay-for-delay settlements to block consumers’ access to lower-cost generic versions of Lidoderm.  The agreement not to market an authorized generic – often called a “no-AG commitment” – is the form of reverse payment.  The FTC’s complaint alleges that Endo paid the first generic companies that filed for FDA approval – Watson Laboratories, Inc. – to eliminate the risk of competition for Lidoderm, in violation of the Federal Trade Commission Act.  Lidoderm is a topical patch used to relieve pain associated with post-herpetic neuralgia, a complication of shingles.  Under federal law, the first generic applicant to challenge a branded pharmaceutical’s patent, referred to as the first filer, may be entitled to 180 days of exclusivity as against any other generic applicant upon final FDA approval. But a branded drug manufacturer is permitted to market an authorized generic version of its own brand product at any time, including during the 180 days after the first generic competitor enters the market. According to the FTC, a no-AG commitment can be extremely valuable to the first-filer generic, because it ensures that this company will capture all generic sales and be able to charge higher prices during the exclusivity period.  The FTC is seeking a court judgment declaring that the defendants’ conduct violates the antitrust laws, ordering the companies to disgorge their ill-gotten gains, and permanently barring them from engaging in similar anticompetitive behavior in the future.

Endo agreed to settle the charges in a proposed stipulated order to be entered by the court.

In October 2018, the FTC announced that online student loan refinancer SoFi Lending Corp. (SoFi) agreed to stop misrepresenting how much money student loan borrowers have saved, or will save, by refinancing their loans with the company. The Commission approved the final consent in February 2019. In its administrative complaint, announced concurrently with the proposed settlement, the FTC alleged that since April 2016 SoFi made prominent false statements about loan refinancing savings in television, print, and Internet advertisements.

Following a public comment period, the FTC has approved two final orders settling allegations that Creaxion Corporation, Inside Publications, LLC, and their respective principals misrepresented that paid endorsements were independent consumer opinions and that commercial advertising was independent journalistic content.