American Bar Ass'n v. Federal Trade Commission
394 U.S. App. D.C. 344
| D.C. Cir. | 2011Background
- FACT Act amended FCRA to empower FTC to require identity theft protections, including Red Flags Rule.
- Red Flags Rule did not initially define coverage for lawyers; Extended Enforcement Policy expanded coverage to include professionals billing after services.
- ABA challenged Extended Enforcement Policy as unlawful expansion absent clear congressional authorization; district court enjoined enforcement against lawyers.
- Intervening legislation: Red Flag Program Clarification Act of 2010 redefined creditor, narrowing coverage by requiring actual advances of funds to trigger the rule.
- Court held case moot because Clarification Act altered the posture; district court judgment vacated and case remanded for dismissal as moot.
- Discussion addressed mootness doctrine and absence of live controversy, as well as vacatur standards in light of intervening legislation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was ABA's suit moot after the Clarification Act? | ABA argued ongoing controversy remained. | FTC asserted intervening legislation mootness. | Case is moot. |
| Do mootness exceptions apply here? | Murphy cap and voluntary cessation could preserve claims. | Exceptions do not apply; recurrence not evading review; cessation not voluntary. | No mootness exceptions apply. |
| Was vacatur of the district court's decision appropriate? | N/A | N/A | Vacatur appropriate; judgment dismissed as moot. |
| Does the Clarification Act govern the scope of 'creditor' for the Red Flags Rule? | Lawyers could be creditors under broader reading. | Act narrows to specific creditor definitions; excludes lawyers absent actual fund advances. | Clarification Act narrows creditor definition; lawyers not covered by the Rule. |
Key Cases Cited
- Clarke v. United States, 915 F.2d 700 (D.C. Cir. 1990) (mootness posture when posture is altered by events)
- Galioto, 477 U.S. 556 (U.S. 1986) (duty to dismiss mootness when intervening legislation alters posture)
- Murphy v. Hunt, 455 U.S. 478 (U.S. 1982) (capable of repetition, yet evading review exception)
- United States v. W.T. Grant Co., 345 U.S. 629 (U.S. 1953) (heavy burden for voluntary cessation exception)
- National Black Police Ass'n v. Dist. of Columbia, 108 F.3d 346 (D.C. Cir. 1997) (vacatur and mootness in agency action contexts)
- American Library Association v. Barr, 956 F.2d 1178 (D.C. Cir. 1992) (legislative action as responsible lawmaking, not manipulation)
- U.S. Bancorp Mortg. Co. v. Bonner Mall P'ship, 513 U.S. 18 (U.S. 1994) (vacatur generally inappropriate when mootness results from party action)