Two plaintiffs filed an unjust enrichment class action Wednesday against InMarket Media over its collection of consumers’ location data (docket 1:24-cv-11170). The filing in U.S. District Court for Massachusetts came the same day the FTC finalized a settlement with the data aggregator (see 2405010071).
The U.S. Appeals Court for the D.C. Circuit granted Meta's unopposed motion to hold its appeal against the FTC in abeyance until 21 days after the U.S. Supreme Court issues its decision in SEC v. Jarkesy, said a clerk's order Tuesday (docket 24-5054). The underlying Meta-FTC case in the district court similarly has been stayed (see 2404180029). The D.C. Circuit appeal arises from the district court’s denial of Meta’s motion for a preliminary injunction to block the FTC’s administrative proceeding into its privacy practices. In the same decision, the district court also denied the FTC’s motion to dismiss. The district court denied that motion without prejudice, concluding that it would be premature to dismiss Meta’s claims before SCOTUS has issued its decision in Jarkesy, as it’s possible that the SCOTUS decision may have some bearing on the Meta-FTC case. Though Jarkesy involves a different agency, it concerns many of the same constitutional challenges asserted by Meta against the FTC, said Meta's motion Monday. The D.C. Circuit should similarly stay the appeal pending the Supreme Court’s Jarkesy decision, it said. Holding the appeal in abeyance temporarily will accomplish the goal of judicial efficiency in at least two ways, it said. First, granting the stay will allow the parties to brief the appeal with the benefit of the Supreme Court’s ruling, it said. Second, within weeks of the Jarkesy decision, the parties must determine next steps in the district court action, including whether the FTC will renew its motion to dismiss, it said. A second motion to dismiss “has the potential to give rise to a second appeal raising similar questions concerning the state of the law and how it applies to Meta’s claims,” it said. It thus may provide an opportunity for the parties to discuss “whether the instant appeal should continue to be held in abeyance pending resolution of that motion,” it said. An abeyance to give the parties time to determine the best course forward “will therefore accomplish judicial efficiency,” it said. Meta alleges that the FTC is structured so that in “administrative adjudications,” including the proceeding against Meta, the agency “has a dual role as prosecutor and judge,” in violation of the due process clause. It also alleges that FTC commissioners exercise executive authority while being “unconstitutionally insulated from removal” by the president. The questions at stake in Jarkesy (docket 22-859) include whether the statutory provisions that empower the SEC to initiate and adjudicate administrative enforcement proceedings violate the Seventh Amendment. Also at stake is whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. The case also asks whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection.
FCC announces staff changes: Office of Internal Affairs’ Nese Guendelsberger becomes acting legal adviser-wireless to Commissioner Geoffrey Starks, succeeding Shiva Goel (see 2404250030 and 2404240059); Marco Peraza, wireline adviser to Commissioner Nathan Simington, leaves to become attorney adviser to FTC Commissioner Andrew Ferguson; and Darryl Cooper of the Disability Rights Office and Pamela Smith of the Office of General Counsel, retiring … Shutts & Bowen hires Patricia Flanagan, ex-Fox Rothschild, as partner-trademark and copyright … First Orion promotes former Samsung executive Joe Stinziano to president-CEO, effective May 1, succeeding Charles Morgan, who continues as chairman … DZS, broadband networking and AI-driven cloud software provider, appoints ADVA’s Scott St. John as chief customer officer … Aqua Security cloud native security company taps Mike Dube, ex-CrowdStrike, as chief revenue officer ... LoanDepot hires Jeff Wilkish, ex-Movement Mortgage, as regional vice president-New England ... IonQ, quantum computing company, names President-CEO Peter Chapman chairman and former Broadcom Chief Financial Officer Harry You lead independent director, both effective with the close of IonQ’s June 5 annual meeting.
Despite advertising that consumers can “pay any bill” using its “purportedly vast payment ‘network of billers,’” third-party bill payment platform Doxo “has no relationship with the overwhelming majority of billers in its supposed ‘network,'” the FTC alleged in a Thursday complaint (docket 2:24-cv-00569) in U.S. District Court for Western Washington in Seattle. The lawsuit names Doxo, CEO Steve Shivers and Vice President Roger Parks.
Here are Communications Litigation Today's top stories from last week, in case you missed them. Each can be found by searching on its title or by clicking on the hyperlinked reference number.
StubHub’s suggestion that users can apply an “estimated fees filter” to search for tickets is an “intentionally misleading statement,” alleged a class action Monday (docket 2:24-cv-03318) in U.S. District Court for Central California in Los Angeles.
U.S. District Judge Randolph Moss for the District of Columbia adopted the joint request of Meta and the FTC to stay Meta’s constitutional challenge of the commission’s administrative enforcement proceeding against the company for alleged privacy violations, said the judge’s text-only docket entry Wednesday (docket 1:23-cv-03562). Meta and the FTC sought the stay, pending a U.S. Supreme Court decision in SEC v. Jarkesy (docket 22-859), said their joint meet and confer statement Monday (see 2404160033). Meta alleges that the FTC is structured so that in “administrative adjudications,” including the proceeding against Meta, the agency “has a dual role as prosecutor and judge,” in violation of the due process clause. It also alleges that FTC commissioners exercise executive authority while being “unconstitutionally insulated from removal” by the president. The questions at stake in Jarkesy include whether the statutory provisions that empower the SEC to initiate and adjudicate administrative enforcement proceedings violate the Seventh Amendment. Also at stake is whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. The case also asks whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection.
Kochava’s affirmative defenses give the FTC “fair notice” of the defenses it will raise, thus satisfying the only pleading standard the 9th U.S. Circuit Court of Appeals “has ever applied to affirmative defenses” and the only standard contemplated by the Federal Rules of Civil Procedure, said the defendant’s opposition to the FTC’s motion to strike (docket 2:22-cv-00377) affirmative defenses Tuesday in U.S. District Court for Idaho in Coeur d’Alene (see 2403070026). The FTC sued Kochava in August 2022 for allegedly selling vast amounts of personal information about millions of people. The agency alleges that the data can reveal a person’s sensitive information, including religious affiliations, sexual orientation and medical conditions, and by selling that data, Kochava invades consumers’ privacy and exposes them to significant risks of secondary harms. The FTC fails to show that Kochava’s defenses could not apply under any set of circumstances, which is the standard to grant the FTC’s motion, said the opposition. The FTC’s “pejorative characterization of Kochava’s ‘laundry list’ of affirmative defenses misses the point that a defendant is required to assert every applicable defense in its responsive pleading, to avoid waiver of same,” it said, citing Morrison v. Mahoney. The court should not strike factually based defenses when Kochava hasn’t had the opportunity to conduct “meaningful discovery,” since discovery may reveal that the defenses “are in fact well-supported,” and the adequacy or inadequacy of the defenses is unclear as a matter of law, the filing said. Kochava asked the court to deny the FTC’s motion to strike in its entirety; if any part of the motion is granted, the defendant requests leave to amend. Kochava also requests a jury trial.
The parties in Meta’s constitutional challenge of the FTC’s administrative enforcement proceeding against the company for alleged privacy violations want the U.S. District Court for the District of Columbia to stay the action, pending a U.S. Supreme Court decision in SEC v. Jarkesy (docket 22-859), said their joint meet and confer statement Monday (docket 1:23-cv-03562). The parties propose submitting a further joint meet and confer statement within 14 days of the SCOTUS ruling, it said. At stake in Jarkesy is whether the statutory provisions that empower the SEC to initiate and adjudicate administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment. Also at stake is whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. The case also asks whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection. Jarkesy was argued Nov. 29. Meta’s complaint challenges the constitutionality of the FTC’s “five structural characteristics” that render its actions against Meta “unconstitutional” (see 2311300039). Meta alleges that the FTC is structured so that in “administrative adjudications,” including the proceeding against Meta, the agency “has a dual role as prosecutor and judge,” in violation of the due process clause. It also alleges that FTC commissioners also exercise executive authority while being “unconstitutionally insulated from removal” by the president. Congress has delegated to the FTC power to assign disputes to administrative adjudication rather than litigating them before an Article III court, in violation of Article I of the Constitution, alleges Meta.
Frontier Communications must spend $20 million over four years to upgrade internet speeds and infrastructure in North Carolina under a settlement with Attorney General Josh Stein (D), the state DOJ said Tuesday. The carrier also will pay $300,000 in restitution for North Carolina customers affected by slower speeds. North Carolina and other states joined the FTC suing Frontier in 2021 over slow speeds. The federal court in that case dismissed the state’s claims against Frontier while allowing the FTC’s case to proceed (see 2110040066). However, North Carolina continued to negotiate with Frontier to reach a settlement, the AG office said. “We’ve been hearing concerns from Frontier customers for years now, and I’m hopeful that these investments will lead to better service,” said Stein. Frontier didn’t comment.