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Internet Attorney: Federal Trade Commission Trials From Hell

By January 13, 2007June 28th, 2010Internet Lawyer

If the Federal Trade Commission (FTC) decides to pursue a case against you, your Internet attorney will probably explain that the two common routes are a lawsuit in a federal district court or an administrative trial within the agency. Each has its pros and cons, but the FTC seems to prefer going the district court route because there are some powerful legal remedies it can obtain.

Let’s examine both types of cases so you understand what you’re facing if either occurs.

Administrative Cases

If there is an unusual legal issue or some type of precedent that the Federal Trade Commission wants to set, it will likely go after you in a trial before an administrative law judge (ALJ).


Because the ALJ is actually issuing an agency decision by applying the FTC’s own practice rules. It is a stacked deck in favor of the FTC. Your Internet attorney can help you reduce the risk of getting tried before an ALJ.

Remember that the FTC considers itself a watchdog whose purpose is to protect the public. Whether you’ve done anything wrong or

not, there is an unspoken presumption of misconduct once the Federal Trade Commission decides to investigate you.

What’s even worse is that any appeal of the agency decision is reviewed by a federal circuit court of appeals in a way that heavily defers to the findings of fact made by the ALJ during your administrative trial. Think of the Internet attorney fees you’ll rack up defending yourself in this type of litigation…and it could be avoided by taking the right actions now to put your online business on safe ground.

In short, the FTC writes rules, an agency judge makes factual findings as to whether you broke the rules, and the appellate court leans in favor of finding that the ALJ made the right decision.

U.S. District Court Cases

On the plus side, cases brought by the FTC against you in federal district court have a greater chance of impartiality. The federal judge is independent of the agency and the lawsuit will be handled as one of many types of cases this judge hears. His livelihood doesn’t depend upon the Federal Trade Commission.

That being said, the FTC likes to bring suits in federal district courts because of the powerful court orders it can obtain if you are found to have violated the law.

These remedies may include:

* Obtaining an injunction or a restraining order against you.

* Monetary judgments against you, including orders to make restitution or disgorge your profits.

* Having your assets frozen or seized.

* Appointing a receiver to control your assets.

* Requiring you to change your advertising and even publicly retract prior advertising.

All it takes is a preliminary injunction or a temporary restraining order, and suddenly you’re out of business until you can convince the judge otherwise. Try paying for an Internet attorney to do that if your assets have been frozen in the process. Avoid getting in trouble with the Federal Trade Commission in the first place and you won’t have to worry about it.

Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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