Texas Attorney Stephen Cochell Challenges Authority of FTC to Seize…

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On its face, it does not, especially when read in the context of the entire statutory scheme which was a very specific system of … reticulated remedies.

In the case (FTC v. Credit Bureau Center & Michael Brown, Case No. 17-cv-00194, filed in the United States Court of Appeals for the Seventh Circuit), business law attorney Stephen Cochell, founder of the Cochell Law Firm, argued that Congress never intended to allow the FTC to impose receiverships over businesses and individuals effectively seizing everything owned by a business and by its owners.

According to court documents, the FTC (plaintiff) seized all the assets owned by Credit Bureau Center and all personal assets owned by his client, Michael Brown (defendant, founder of Credit Bureau Center), including his retirement account, requiring him to apply to the Court for living expenses and to request fees to pay his lawyers. The trial court allegedly denied over 80% of the cost of defending CBC and Brown.

Although numerous courts around the country have held that Section 13(b) of the FTC Act grants seizure authority, the Court considered arguments on behalf of CBC and its owner challenging whether Section 13(b) expressly or by implication granted the broad sweeping powers exercised by the FTC. Section 13(b) allows the FTC to seek injunctions to enjoin deceptive acts or practices but does not specifically allow the FTC to seek monetary relief for consumers.

During oral argument on the case, Judge Diane Sykes observed that Section 13(b) did not support the FTC’s claim of authority. “On its face, it does not, especially when read in the context of the entire statutory scheme which was a very specific system of … reticulated remedies.”

Court documents further state that the Seventh Circuit Court of Appeals is considering whether the FTC has the legal authority to seize businesses and impose receiverships over companies and individuals for false, deceptive or misleading advertising. The FTC reports that it seized over $2.3 billion in assets from June 30, 2017, to June 30, 2018, from different companies that allegedly violated federal law.

About Cochell Law Firm
Stephen Cochell is a member of the Texas State Bar. He is admitted to the U.S. Supreme Court, U.S. Court of Appeals for the Fourth Circuit, U.S. Court of Appeals for the Sixth Circuit, U.S. Court of Appeals for the Eighth Circuit, U.S. Court of Appeals for the Eleventh Circuit, U.S. Court of International Trade, U.S. District Court, Northern District of Texas, U.S. District Court, Southern District of Texas and U.S. District Court, Eastern District of Texas. The Cochell Law Firm focuses on commercial litigation, corporate and transactional law, intellectual property, labor and employment law, and white collar criminal defense. For more information, please call (346) 800-3500, or visit https://cochelllawfirm.com/.

For media inquiries, please call the NALA at 805.650.6121, ext. 361.

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