Digesting an opinion by The Honorable Timothy C. Batten, Sr., U.S. District Court for the Northern District of Georgia (Judge Batten had no role in WLF’s selecting or editing this opinion for our Circulating Opinion feature.). Judge Batten was confirmed to the Northern District of Georgia on March 6, 2006.

Case No. 1:17-cv-3094, U.S. District Court for the Northern District of Georgia, Atlanta Division

Introduction to the Opinion

The Federal Trade Commission alleged that defendants deceptively marketed loan-discount-club programs in a manner that violated § 5 of the Federal Trade Commission Act. The FTC sought injunctive relief and other equitable remedies in federal court under § 53(b) of the Act. Defendants moved to dismiss, arguing that § 53(b) of the Act remedies only future violations, not past wrongdoing. On April 16, 2018, Judge Batten rejected defendants’ motions to dismiss.  Later, on its own initiative, the court sought briefing on whether it should reconsider its previous holding. On October 15, 2018, in a scholarly and pointedly written opinion, Judge Batten reversed his earlier ruling, digested below.


Many of the FTC’s claims against Defendants are based largely on long-ceased misconduct. The FTC seeks to invoke § 53(b) to obtain injunctive and sundry other equitable remedies for Defendants’ alleged deceptive marketing practices. Defendants argue that § 53(b) is designed to remedy only future, rather than past, misconduct, and to the extent the FTC is basing its claims for relief on past misconduct, it must make a Rule-8-compliant showing that Defendants are violating, or about to violate, the law.

A. The FTC Must Aver Facts Under Rule 8 to State a Claim for Relief Under § 53(b)

“The starting point for all statutory interpretation is the language of the statute itself.” United States v. DBB, Inc., 180 F.3d 1277, 1281 (11th Cir. 1999). Section 53(b) provides:

Whenever the Commission has reason to believe (1) that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by the Federal Trade Commission . . . the Commission by any of its attorneys . . . may bring suit in a district court of the United States to enjoin any such act or practice.

This language plainly creates a precondition to the FTC’s statutory authorization to bring suit under § 53(b). That is, the FTC may sue only when it has a “reason to believe” that a violation of law is occurring or about to occur, and filing the lawsuit is in the “interest of the public . . . .” 15 U.S.C. § 53(b). Thus, its “entitlement to relief” under Rule 8 necessarily depends upon the satisfaction of this element.

It is axiomatic that to survive a Rule 12(b)(6) motion, the pleader must “set[] forth ‘well-pleaded facts . . . permit[ting] the court to infer more than the mere possibility of misconduct.’” LabMD, Inc. v. FTC, 894 F.3d 1221, 1233 (11th Cir. 2018) (some alterations in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). The factual allegations must be “enough to raise a right to relief above the speculative level,” Bell Atl. Corp. v. Twombly, 544 U.S. 555, 555–56 (2007), and the averments should “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. *** A straightforward application of these principles means that, in order to obtain the relief provided under § 53(b), the FTC must demonstrate by more than conclusory allegations that it has a reason to believe that the laws entrusted to its enforcement are being or about to be violated.