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John Villafranco

US Chamber Leads Pushback Against ‘Rogue’ FTC
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US Chamber Leads Pushback Against ‘Rogue’ FTC

Business and legal observers submit their objections to recent changes

By:  David Bland

Words matter, and the deliberate deletion of ‘legitimate business activity’ from the FTC’s draft Mission Statement is material and meaningful. This move is likely to trigger another hostile response, creating an unnecessary distraction of the Agency’s own making.

— John Villafranco, Partner, Kelley Drye & Warren LLP

The U.S. Chamber of Commerce, the nation’s most powerful corporate lobbying group and a long-time adversary of the Federal Trade Commission (FTC), sent three letters to Commission Chairwoman Lina Khan on Nov. 19, objecting to recent actions by the Commission that the Chamber considers to be abuses of power.

In an incendiary accompanying statement, U.S. Chamber President and CEO Suzanne P. Clark said: “The FTC is waging a war against American businesses, so the U.S. Chamber is fighting back to protect free enterprise, American competitiveness, and economic growth.”

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January 1, 2022 0 comment
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Supreme Court to Weigh In on FTC Authority to Order Monetary Relief
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Supreme Court to Weigh In on FTC Authority to Order Monetary Relief

Recent court decisions concerning Section 13(b) of FTC Act could change decades of precedent

By: David Rauf

The FTC has taken the position that the injunctive relief permitted by 13(b) allows it to disgorge revenue from scammers and corporations as well as regain restitution for victims.

“There’s an existing process outside of 13(b) for the FTC to pursue monetary relief, but it is cumbersome and requires more due process, which is why the FTC doesn’t like it.”    —Larry Steinberg, Chair, Multilevel Marketing Industry Group, Buchalter

This could dramatically affect the relationship between the direct selling industry and the FTC.     —Larry Steinberg, Chair, Multilevel Marketing Industry Group, Buchalter

The U.S. Supreme Court has agreed to decide whether the Federal Trade Commission (FTC) can continue to seek monetary rewards when it sues scammers and firms accused of deceptive business practices, setting the stage for a ruling that will have wide-ranging ramifications for the direct selling channel.

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September 1, 2020 0 comment
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U.S. Supreme Court Decision Could Impact FTC’s Ability to Seek Injunctive Relief
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U.S. Supreme Court Decision Could Impact FTC’s Ability to Seek Injunctive Relief

June 22 decision in Liu v. SEC allows agency to seek monetary relief; major setback to limiting FTC’s authority

By:  John Villafranco

John Villafranco, partner with Kelley Drye LLP

The Supreme Court issued an 8-to-1 decision on June 22 in the highly anticipated case of Liu v. SEC. The opinion, authored by Justice Sotomayor (with Justice Thomas dissenting), holds that a “ disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief,” and allows the Securities and Exchange Commission (SEC) to seek such relief under the Securities Act. 

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July 1, 2020 0 comment
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AdvoCare and the Fight Over the FTC’s Section 13(b) Authority
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AdvoCare and the Fight Over the FTC’s Section 13(b) Authority

Remaining litigation may be determined by threats to the Federal Trade Commission’s (FTC) enforcement ability

By John E. Villafranco

If (the McDaniels) were to prevail…they potentially could resolve their litigation with the FTC without an injunction that prohibits them from participating in MLM activities. They may also not have to pay any money at all. 

No other court has aligned with the Seventh Circuit thus far in curtailing the FTC’s enforcement authority by foreclosing its ability to obtain restitution.

At the press conference announcing the AdvoCare settlement, FTC Bureau Director Andrew Smith commented on the consent’s ban on multi-level marketing but noted that “every case is different.” He pointed to the Herbalife consent order, by way of example, and stated that the company did not agree to abandon multi-level marketing altogether but instead agreed to certain protections that the FTC believed addressed consumer harm. 

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November 1, 2019 0 comment
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FTC Loses Authority to Seek Restitution or Freeze Assets under New 7th Circuit Ruling
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FTC Loses Authority to Seek Restitution or Freeze Assets under New 7th Circuit Ruling

The U.S. Court of Appeals for the Seventh Circuit has appellate jurisdiction over Illinois, Indiana and Wisconsin Decision in Section 13(b) case has major implications for direct sellers; battle far from over By Rick Redding “This ruling takes away the FTC’s power, except over injunctions.” —Spencer Reese, co-founder, Reese Poyfair
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October 1, 2019 0 comment
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AdvoCare Exits Multi-Level Compensation Model
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AdvoCare Exits Multi-Level Compensation Model

Without warning, company restructures compensation plan to single-level; field leaders stunned

By Teresa Craighead

The sudden announcement has created speculation throughout the channel, with [experts] asking why a company with $472 million in revenue would choose to so dramatically change its business model, seemingly overnight.

“The FTC has basically told us what the right way to do business is. [FTC Associate Director] Lois Greisman has repeatedly said ‘look to the settlement’, ‘look to the MLM business guidance.’ This seems to be a pretty clear indicator they weren’t kidding around.”
—Al Bala, CEO Mannatech

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June 3, 2019 0 comment
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