FTC Submits Comment Urging Modification of Southern District of Florida Local Rule

The Federal Trade Commission submitted a comment to an ad hoc committee of the U.S. District Court for the Southern District of Florida advocating for the modification of a local rule amendment that has impaired the FTC’s ability to monitor order compliance and recover money from defendants who have violated the law and harmed consumers.

As part of the FTC’s efforts to protect consumers, the agency routinely works to obtain redress for injured consumers by collecting on court judgments against defendants. These offenders frequently refuse to pay and hide assets, making judgment collection extremely difficult.

The comment, submitted to the District Court’s Ad Hoc Committee on Rules and Procedures, pertains to a December 3, 2018 change to the local rules for the District Court. The amended rule requires that FTC staff—after it has obtained a judgment against a defendant—notify the defendant when the agency receives materials from third parties in response to a subpoena.

The comment urges the committee to modify the amended rule because it undermines the FTC’s enforcement efforts. Providing a judgment debtor with notice that the FTC is conducting this type of post-judgment investigation gives them the opportunity to dissipate assets before the FTC is able to secure them. In addition, offenders that are not complying with a court order are likely to alter their patterns of deceptive behavior or temporarily cease the fraudulent activity to avoid detection.

The Commission vote approving the comment was 5-0.

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