Last December a settlement report revealed that, despite engaging for over a year, the FTC and Neora were unable to reach a settlement.
In the wake of the AMG Supreme Court decision, both parties were directed to file a “Joint Report regarding Alternative Dispute Resolution”.
The FTC saw settlement negotiations not going anywhere with Neora,
largely because of their disagreement regarding the appropriate nature of permanent injunctive relief to prevent further violations of the FTC Act, 15 U.S.C. § 45(a).
The regulator puts forth that the AMG decision doesn’t cover this.
the Supreme Court’s decision did not disturb the FTC’s ability to obtain permanent injunctive relief pursuant to Section 13(b), 15 U.S.C. § 53(b), and the FTC has no reason to believe that the parties’ positions as to the appropriate form of injunctive relief to prevent further violations of the FTC Act have changed.
As such, ‘the FTC does not believe that pursuing alternative dispute resolution would be fruitful at this time.’
Neora on the other hand argues they ‘believe the AMG decision sweeps far more broadly that the FTC suggests.’
Not only does the decision make clear that the equitable monetary relief that the FTC seeks under section 13(b) … is not available, but there is a very strong suggestion that the “proper case” in which permanent injunctive relief is appropriate is one in which temporary or preliminary injunctive relief was accorded or at least sought since the purpose was to ensure that the relief sought through the administrative process that Congress authorized would be effective.
Citing another case that was relied on in the AMG decision, Neora puts forth it ‘will not allow any injunctive relief or complaints about past, non-current behavior’.
Accordingly, Defendants believe that now is the appropriate and most opportune time for the parties to renew their efforts at alternative dispute resolution, rather than wait until September 12, 2022.
Accordingly, Defendants are ready and willing now to engage in mediation with the FTC before a private provider or a Magistrate Judge, and are ready and willing to engage in any other form of alternative dispute resolution the Court may recommend.
I don’t see this getting anywhere if both parties continue to dig their heels in. If a magistrate is appointed, there’s the potential for some interesting decisions to be made.
The FTC’s and Neora’s Joint Report was filed on May 10th. A decision on whether the parties will proceed to ADR remains pending.
Update 24th May 2021 – On May 14th an order referred the case to a Magistrate Judge.
A settlement conference was to be scheduled before the Magistrate Judge within sixty days.
On May 19th a status conference to decide a settlement conference date was scheduled for May 25th.
Prior to the Status Conference, counsel for the parties SHALL confer and be prepared to suggest three proposed dates for the settlement conference to take place either in person or by telephone on or before July 13, 2021
I anticipate our next update will the outcome of the status conference, followed by the outcome of the by then scheduled settlement conference.
Update 28th May 2021 – A settlement conference has been scheduled for June 29th, 2021.
Update 7th August 2021 – Renewed settlement discussions between Neora and the FTC have failed.