FTC Defense Lawyer – Unparalleled Industry Knowledge
The Federal Trade Commission Act (FTC Act) (15 USC §45) is the primary consumer protection statute enforced by the agency. The FTC is empowered to prevent unfair or deceptive marketing practices, conduct investigations and seek relief for conduct injurious to consumers.
FTC defense lawyer Richard B. Newman has successfully resolved some of the most important Internet advertising enforcement actions and regulatory inquiries in the past decade and is a critical asset to any company or individual faced with navigating a federal or state deceptive trade practices case.
Richard’s significant, nationwide litigation and counseling experience extends to defending a sophisticated client base (some of whose clients are comprised of Fortune 100 retail companies) in high-stakes “bet-the-company” advertising proceedings and investigations at all levels of government, and in state and federal courts throughout the United States.
- Federal Trade Commission
- State Attorneys General
- Consumer Financial Protection Bureau
- U.S. Department of Justice
- National Advertising Division (NAD)
- Departments of Consumer Affairs
A number of Richard’s clients have been recognized as being amongst the fastest growing private media and technology companies and ranked on Inc. Magazine’s Annual 500/5000 List.
His litigation experience also includes defending companies and individuals in private litigation matters in state and federal court involving allegations of unfair trade practices and false advertising, and Lanham Act litigation involving Internet, telecommunications, dietary supplement and consumer product companies.
See examples of Richard’s recent Representative Experience.
If the FTC makes the decision to litigate, it can initiate action in federal court or bring an administrative action. If the FTC proceeds to federal court to pursue an enforcement action against you or your company, it may take the following actions:
- Enjoin violations of the FTC Act, and secure other equitable relief such as restitution and disgorgement of “ill-gotten” gains
- Serve you with a complaint and temporary restraining order
- Immediately freeze corporate and personal assets
- Gain immediate access to business premises
- Appoint a temporary receiver to take over corporate assets and operations
The agency has extremely broad powers that can severely impact your ability to provide for basic necessities and compensate employees, suddenly and without warning. Such powers result from the FTC’s use of ex parte proceedings, held without prior notice in federal district courts to obtain temporary restraining orders (TROs) imposing asset freezes and temporary receiverships in cases of alleged consumer fraud.
In a federal lawsuit, the FTC can seek injunctive relief, civil penalties of up to $16,000 per violation of FTC regulations and restitution.
FTC Administrative Actions
An FTC administrative proceeding is, practically speaking, an expedited court proceeding. Following abbreviated motion practice and discovery, there is an evidentiary hearing and a substantive evaluation by an administrative law judge. The ALJ then renders a decision which can be appealed.
Importantly, the FTC is only permitted to seek injunctive relief in an administrative proceeding. In order to obtain a civil penalty, the FTC must pursue an action in federal court.
Civil Investigative Demands (CIDs)
If your company receives a civil investigative demand, it means that the Commission is investigating unfair or deceptive acts or practices in anticipation of initiating an enforcement action. A CID is similar to a subpoena and carries significant enforceable weight, including the ability of the FTC to petition a court to enter an order compelling compliance.
CIDs first go to the bureau chief and then to a commissioner’s office for approval. If you received one, it is not an accident. However, while a plain reading of the CID may not make it clear, do not automatically assume that you are the target. If you receive a civil investigative demand, it is possible that you may simply be a third-party with information that the agency is interested in obtaining.
Civil investigative demands can be used to seek documents, written responses to questions and oral testimony. CIDs often seek information pertaining to:
- Advertising and marketing campaigns
- Relationship or affiliation with third-parties
- Relevant documents and communications, including those with third-party marketers
- Claim substantiation
- Representations and disclosures made on websites
- Website and marketing agreements
- Refund policies or practices, including those about any continuity program or negative option
- Scripts and call recordings
- Marketing, sale and transfer of leads
- Lead qualification criteria
- Evaluation and monitoring of lead sources and buyers
- Products and services provided by lead buyers
- Policies, manuals and training materials
- Data security protocols and policies
- Data use restrictions
- Corporate organization charts, documents and information
- Business plans, balance sheets and income statements
- Consumer inquiries and complaints
- Bank account information
- Refunds, returns and chargebacks
- Federal, state and local law enforcement or government investigations, inquiries and actions
- Compliance with applicable federal laws, rules and regulations
CIDs require that recipients suspend any routine procedures for document destruction and take other measures to prevent the destruction of documents. Ensure that all documents and communications are preserved. Time is of the essence as there is typically a quick return date and often very little time to formally challenge a CID.
Civil investigative demands can be broad-sweeping and invasive. Proactively assessing what practices or relationships may have resulted in the investigation, implementing remedial measures and mounting a deliberate and persuasive response are critical.
Responses should advocate a position and set forth why the marketing or advertising claims in question are not misleading (e.g., substantiated) and why the company has not engaged in any wrongdoing. Depending upon the circumstances, it may be appropriate to request an meeting with Director of the Bureau of Consumer Protection, FTC Commissioners or FTC staff.
The FTC often contacts target companies to request information as part of an investigation. CIDs are formal information requests. Access letters are informal requests. Access letters typically come from an FTC staff attorney and set forth a general statement that the agency is conducting an investigation in order to assess whether the practices violates a statute or regulation. Details about the investigation are not always disclosed.
While the FTC does not often openly disclose why or when it began an investigation, there are several common triggers, including:
- Direct findings
- Consumer complaints
- News articles
- Advocacy group requests
- NAD recommendations
- Competitor requests
The FTC constantly monitors claims made across all media channels. In addition, consumers often submit complaints directly to the FTC, to state Attorneys General, to local Better Business Bureaus and via social media. The Commission also keeps a close watch on reports on news outlets for unlawful marketing practices.
The National Advertising Division of the Council of Better Business Bureaus (NAD) initiates reviews and conducts reviews in response to consumer or competitor complaints. If an advertiser refuses to participate or to comply with an NAD decision, the matter can be referred to the FTC.
Depending upon how egregious the allegations are, any one of the foregoing can result in the identification of an investigation target. Companies should consult with an FTC consumer protection investigations and enforcement law firm to monitor the foregoing and take proactive measures to minimize the likelihood of being investigated.
FTC Defense Lawyer With a National Reputation
Richard is a highly-respected, industry leading regulatory defense attorney whose practice is uniquely focused upon assisting leading advertisers, affiliate networks, publishers, advertising agencies, lead generators, lead aggregators, list managers, email marketers, telemarketers and technology businesses effectively and efficiently resolve contentious FTC investigations and enforcement actions. The breadth of Richard’s superior grasp of the complex regulatory challenges and regimes facing the online advertising industry enables him to bring a broad perspective and knowledge to Federal Trade Commission matters, including the development of tactics needed to defend against agency actions and to secure advantageous outcomes.
He has successfully defended companies and individuals facing regulatory enforcement actions to minimize liability for conduct that violates the FTC Act and other laws and regulations enforced by the agency, modified broad-sweeping asset freezes, obtained necessary living expenses and attorneys’ fees, negotiated favorable settlement terms, modified compliance and monitoring requirements, and secured partially suspended judgments for a fraction of the total amount of alleged consumer injury and totally suspended $0 settlements.
When the FTC oversteps its authority, Richard is a formidable advocate in litigation, able to swiftly develop affirmative and aggressive strategies that are aligned with his clients’ business objectives. His credibility with the Commission as an effective negotiator and consensus builder is a distinct benefit to his clients when obtaining an equitable early resolution is preferred. Richard’s excellent working relationships with the state and federal agencies regulating the Internet marketing industry help facilitate discussions that can be crucial to resolving enforcement actions amicably.
Richard is also well positioned to guide advertisers and marketers through the minefield of FTC investigations. He possesses the talent and experience to develop win-win solutions that reduce the burden for those faced with a CID. As a result of this experience, he brings unique perspective when counseling clients and finding creative solutions to complicated problems, including narrowing the scope of civil investigative demands, negotiating favorable production schedules and, in some instances, securing the amicable and outright closure of investigations with the goal of avoiding the initiation of enforcement proceedings altogether.
- Analyzing the facts, evidence and law
- Analyzing response tactics and defenses
- Preparing thoughtful, persuasive and analytical substantive responses aimed at disposing of the investigation and mitigating potential exposure
- Evaluating implications of responses
- Obtaining an extension of the return date
- Negotiating the scope of the CID, a “rolling” production schedule and other substantive and procedural matters
- Determining the substantive claims at issue and implementing corrective measures
- Assessing the scope of responsive documents and information in the company’s control
- Engaging in technical discussions with agency staff
- Preparing witnesses for investigational hearings
- Negotiating amicable investigation closure or settlement
National news outlets such as BBC World News call on Richard for featured commentary on digital media, online advertising and Internet related legal and regulatory issues. He is recognized within the industry as a leading Internet marketing and regulatory defense lawyer and is frequently in the news as a columnist for publications such as Leading Internet Case Law, Data Protection Leader, Digital Business Lawyer, MarketingProfs, Law360 and Privacy Law Bulletin on a variety of regulatory issues related to the risks and liabilities in the Internet marketing industry.
Richard recently presented a live webinar for a legal education provider recognized by the National Law Journal. Topics that he explored include an examination of recent developments in advertising and marketing regulation, social media marketing, factors that often trigger FTC investigations, and how to develop and implement compliance best practices. Segments of the webinar can be viewed here.
The breadth of Richard’s skills and experience sets him apart from other FTC defense lawyers and enables him to successfully assist clients to navigate CID responses in a practical and thoughtful manner, and to limit the potential disruption and cost of compliance.
Comprehensive Advice and Advocacy
The Federal Trade Commission has developed a reputation for its aggressive investigation and litigation tactics. That is where Richard can help. He has extensive experience assisting marketers with the complexities of regulatory matters, litigation defense, investigative inquiries and compliance counseling.
Richard possesses extraordinary perspective gained from many years litigating and defending a broad spectrum of industry-specific, technology-centric government-plaintiff enforcement matters, investigations and civil contempt actions for the violation of court ordered injunctions.
- Misleading, false and deceptive advertising claims
- Advertising substantiation proceedings
- Affiliate and paid influencer campaigns
- Endorsements and testimonials
- Negative option marketing models
- Privacy and data security
- Native advertising and sponsored content
- Email marketing and telemarketing compliance
- Competitor comparative brand advertising
- Sale pricing and advertised savings
- Environmental and “Made in USA” claims
- Anti-competitive advertising restraints
- State UDAP laws
His extensive experience within the affiliate marketing space and knowledge of cutting-edge advertising, lead generation, privacy, data brokerage, telemarketing, mobile marketing, email marketing and social media issues are a significant benefit to his clients. He has also provided industry-specific views to governmental agencies.
As a regulatory compliance, investigation and defense attorney, Richard is committed to achieving the most beneficial outcomes for his clients. Today’s regulatory environment is pro-consumer and pro-enforcement. An advocate with concentrated, industry-specific experience is vital when dealing with the Federal Trade Commission.
Broad Client Base and Diverse Practice Areas
Richard is highly respected for consistently delivering comprehensive legal counsel that emphasizes risk analysis and sound business practices for corporations involved in advertising and marketing. He provides legal advice and regulatory advocacy regarding issues involving advertising and marketing, privacy, data security and electronic commerce to a broad base of clients that include providers and marketers of products and services across numerous industries, from dietary supplements to receivables management.
An authority on a range of issues involving consumer protection law, Richard concentrates his practice on defending highly-charged advertising and marketing proceedings so his clients can promote their brands. He has successfully defended clients in private commercial litigation matters in federal and state courts, as well as in arbitration and mediation forums, and complex bet-the-company government proceedings and investigations conducted by the Federal Trade Commission and state Attorneys General, including:
- Manufacturers of dietary supplements
- Affiliate and pay-per-call networks
- Publishers and lead generators
- Advertising Agencies and Exchanges
- Lead aggregators
- List managers
- Email marketers, telemarketers and call centers
- Debt relief service providers and debt collection companies
- Online education and certification providers
- Health clubs
- Consumer credit companies
- Technology service providers
A substantial portion of Richard’s work also involves conducting preventative FTC advertising compliance reviews of marketing campaigns and promotional programs, and advising digital media clients on consumer protection issues. He works closely with clients to proactively design and implement customized internal compliance processes that meet business objectives and government expectations.
Notably, Richard has litigated the issue of whether the FTC possesses the ability to seek disgorgement, at all. He is also a member of the Compliance Counsel of the Performance Marketing Association, a trade association representing the performance marketing industry.
Richard serves as outside general counsel to numerous clients throughout the United States. He is a partner in the law firm of Hinch Newman LLP. His law firm website is hinchnewman.com, where you can obtain a free consultation on most legal matters.
Richard’s technology acumen enables him to confer with general counsel and chief information officers about issues pertaining to the privacy and security of information. As a result, Richard also assists clients facing the gamut of privacy and data breach incident-related litigation, compliance and regulatory counseling matters, and internal investigation challenges to traverse a complex web of state and federal requirements.
From children’s privacy to the international transfer of data, data protection is driven by data security. Richard advises leading technology businesses regarding the development and implementation of sound security plans, honoring privacy claims, and properly maintaining and disposing of sensitive personal information about consumers.
With hands-on experience dealing with regulators such as the FTC’s Division of Privacy and Identity Protection, who themselves often struggle to determine a framework for tech platforms and when intervention may be warranted, Richard is well-versed in the agency’s privacy and data security enforcement policies, including those pertaining to mobile device and computer monitoring applications and services. Privacy and cybersecurity laws are continually evolving and even the most well-meaning company can inadvertently get tripped-up when it comes to capturing, using and transferring personal information. Ensuring regulatory and legal compliance, including data breach preparedness and response, are critical to mitigate liability exposure and unwanted media attention.
Richard’s straightforward approach and experience are particularly valued by those that operate in highly-regulated areas and those with an online presence. His clients appreciate the timely and realistic advice that Richard provides, as well as his understanding that the effective protection and management of information is at the heart of well-functioning online marketing and technology businesses. This knowledge, coupled with familiarity of recent law enforcement actions and closed investigations, allows him to better understand his clients’ products and services, find methods to minimize legal risk and effectively advocate on their behalf to regulators.
Richard is a member of the State Bars of California, New York, Nevada and the District of Columbia, the District Courts for the Northern, Central and Southern District of California, the Southern District of New York and the District of Nevada. He is also admitted to practice in the United States Court of Appeals for the Federal Circuit.
He has served as counsel to the Executive Council of Performance Marketing and a member of the Performance Marketing Association’s Compliance Council on whose behalf he has authored authoritative online marketing compliance materials. In 2013, Mr. Newman served as co-chair of the Online Lenders Alliance Council and Forum.
Representative ExperienceThe following are examples of select regulatory investigations and enforcement matters the firm has handled to successful resolution:
- Represented a lead aggregator in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining deceptive and unfair acts or practices in the advertising, marketing, sale or servicing of loans and related products. The FTC was also investigating whether loan brokers, lenders, loan servicers and other marketers of loans had engaged in acts or practices in violation of the Consumer Credit Protection Act, 15 U.S.C. § 1601 et seq. The firm successfully secured the prompt closure of the investigation.
- Represented an online lead generator in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining deceptive and unfair acts or practices in the advertising, marketing, sale or servicing of loans and related products. The FTC was also investigating whether loan brokers, lenders, loan servicers and other marketers of loans had engaged in acts or practices in violation of the the Mortgage Assistance Relief Services Rule, 12 U.S.C. § 5538, and the Consumer Credit Protection Act, 15 U.S.C. § 1601 et seq. The firm successfully secured the prompt closure of the investigation.
- Represented a leading software development academy in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining deceptive and unfair acts or practices in the advertising, marketing or sale of secondary or post-secondary education products or services, or educational accreditation products or services in violation of Section 5 of the FTC Act. The firm successful secured the prompt closure of the investigation.
- Represented data broker defendants in a Federal Trade Commission lawsuit alleging in excess of $4M in consumer harm as a result of the purported collection of loan applications submitted by consumers to payday loan websites and the distribution of sensitive information to non-lenders that, in turn: (i) utilized the information to withdraw millions of dollars from consumers’ accounts without their authorization; and (ii) conducted unauthorized marketing activities by email, text message and telephone calls. The firm successfully negotiated favorable settlement terms without any admission of culpability, premised upon the truthfulness of defendants’ financial information.
- Represented an affiliate marketer defendant in a Federal Trade Commission lawsuit prosecuting what the FTC described as deceptive acts or practices in violation of Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act, in connection with the marketing and sale of credit monitoring services. In doing so, the FTC alleged that defendant lured consumers with fake rental property ads and deceptive promises of “free” credit reports. The firm successfully negotiated extremely favorable settlement terms, including reduced compliance reporting and recordkeeping obligations, without protracted litigation or a finding of liability. Defendant paid only a small proportion of the damages alleged by the FTC and that an affiliate marketer co-defendant was ordered to pay, premised upon the truthfulness of submitted financial information.
- Represented online lead generators in a Federal Trade Commission lawsuit wherein the Commission sought millions of dollars in damages as a result of what the FTC described as fake blogs, fake news websites, fake testimonials, the failure to disclose material connections and bogus free trial offers in conjunction with selling Acai berry weight loss products. The firm successfully negotiated extremely favorable settlement terms without any finding of liability. Defendants paid only a small proportion of the damages that their network co-defendants were ordered to pay and an even smaller fraction of the damages sought by the FTC, premised upon the truthfulness of their financial information.
- Represented affiliate marketers in conjunction with a Civil Investigative Demand issued by the Federal Trade Commission examining false and misleading representations about certification programs, as well as the failure to clearly and conspicuously disclose material connections within purported independent websites. The firm successfully negotiated favorable settlement terms of nominal monetary value without any finding of liability, premised upon the truthfulness of respondents’ financial information. The firm also successfully negotiated the exclusion of additional specific instances of alleged unlawful advertising conduct.
- Represented affiliate marketers in conjunction with investigations by the Florida Attorney General into the promotion of weight loss and automobile insurance products/services. The firm successfully negotiated extremely favorable settlements where respondents paid only a nominal proportion of the damages alleged by the FL OAG. Both matters were resolved promptly and quietly, without any resulting litigation or admission of culpability.
- Represented a pay-per-call network in conjunction with a subpoena issued by the Illinois Attorney General regarding student loan services campaigns. Specifically, the investigation focused upon potential violations of the Illinois Consumer Fraud and Deceptive Business Practices Act by various third-party publishers pertaining to the advertising, soliciting and generation of leads from consumers interested in student loan services. The firm successfully secured the prompt closure of the investigation.
- Represented online marketers in a Federal Trade Commission lawsuit prosecuting what the FTC described as deceptive acts or practices in violation of Section 5 of the FTC Act, in connection with the marketing and sale of academic degree and certification programs. In doing so, the FTC alleged that defendants misled consumers about their association with recognized high school equivalency programs through the use of deceptive metatags and website names designed to look like legitimate online high schools. The firm successfully negotiated extremely favorable settlement terms without protracted litigation or a finding of liability. Defendants paid only a small proportion of the damages alleged by the FTC, premised upon the truthfulness of their financial information.
- Represented a corporate officer defendant in a Federal Trade Commission lawsuit prosecuting what the FTC described as deceptive acts or practices in violation of Section 5 of the FTC Act and the Restore Online Shoppers’ Confidence Act, in connection with the marketing and sale of personal care product trial offers. The firm successfully petitioned the court to modify a broad-sweeping asset freeze and allow distributions for personal living expenses and to fully-satisfy outstanding debt. The firm also successfully negotiated extremely favorable settlement terms without protracted litigation or a finding of liability. Defendant paid only a small proportion of the damages alleged by the FTC, premised upon the truthfulness of financial disclosures.
- Represented a telemarketer in a Utah Division of Consumer Protection investigation regarding alleged violations of the Utah Consumer Sales Practices Act and the Telephone Fraud Prevention Act. The Utah DCP was focused upon whether consumers were contacted to make telephone solicitations while the telemarketers were not registered as a telephone soliciting business, whether the telemarketers informed consumers of the right to cancel and whether the telemarketers failed to furnish services after receipt of payment. The matter was resolved amicably and the investigation promptly closed after payment of an extremely nominal sum by respondent.
- Represented an email marketing company in an investigation by the New York Attorney General relating to alleged violations of the CAN-SPAM Act. The New York OAG was focused upon the company’s email marketing practices, related compliance considerations and third-party lead generation relationships.
- Represented an affiliate marketing network in conjunction with a subpoena issued by the United States Attorney’s Office regarding fraudulent “tech support” advertising campaigns. Specifically, the investigation focused upon alleged misrepresentations of affiliation with Microsoft, spoofed caller IDs, and the detection of viruses or other malware.
- 1 Enforcement Actions
- 2 FTC Administrative Actions
- 3 Civil Investigative Demands (CIDs)
- 4 Access Letters
- 5 Investigation Triggers
- 6 FTC Defense Lawyer With a National Reputation
- 7 Comprehensive Advice and Advocacy
- 8 Broad Client Base and Diverse Practice Areas
- 9 Tech-Savvy
- 10 Admissions
- 11 Representative Experience