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ADventures in Law

All Hat, No Cowboy: What’s Next for the FTC After Corpay’s Fuel Card Rodeo Gets Enjoined?

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On Jan. 7, the Eleventh Circuit rode tall in the saddle, unanimously affirming, almost in full, a district court’s decision on summary judgment against Corpay (a corporate payments company formerly known as FleetCor) and upholding a permanent injunction. While it might look like a routine affirmation of an existing injunction, this ruling marks an interesting turn on the Federal Trade Commission’s (FTC) proverbial trail, raising questions about how the FTC will ride forward with this matter in a post-AMG world.

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To understand the importance of this recent decision, it is worth stepping off the trail for a second to frame its history. In 2019, the FTC filed suit in federal court against Corpay and its CEO, alleging that the defendants violated Section 5 of the FTC Act by making false promises about its fuel card’s savings while also charging customers hundreds of millions of dollars in hidden fees. According to the FTC, the defendants claimed that customers would save money, be protected from unauthorized charges, and have no setup, transaction, or membership fees. Yet, at the same time, the company was purportedly charging fees that consumers didn’t detect – such as “Convenience Network Surcharges,” “Minimum Program Administration Fees,” and “High Risk Pricing.” In its complaint, the FTC sought both injunctive and equitable monetary relief pursuant to Section 13(b) of the FTC Act.

In 2021, two years later, the FTC rode back with an administrative complaint on the same allegations. In its press release, the Commission explained that this move was prompted by the Supreme Court’s decision in AMG Capital Mgmt., LLC v. FTC, which barred the FTC from seeking monetary relief under Section 13(b) of the FTC Act. In fact, the FTC explicitly stated that the administrative complaint was filed “[i]n an effort to ensure that the agency’s case against the fuel card marketer is still able to recover money lost by consumers.” This administrative case was hitched to the post while the federal case rode the long trail through the court system.

That same year, both the FTC and Corpay saddled up for summary judgment in the federal case. In its decision, the district court let the FTC ride off with every claim and granted the FTC a permanent injunction against the defendants. However, the court did give a narrow win to Corpay – ruling that post-AMG, the FTC couldn’t corral monetary relief under Section 13(b). The defendants appealed this ruling and the permanent injunction.

Unfortunately for the defendants, when the Eleventh Circuit took the reins, it largely affirmed the district court’s decision – keeping the FTC in the saddle while sprinkling more than a few stinging remarks in Corpay’s direction. Referencing how the FTC perceived Corpay’s behavior, the decision begins with the following:

Great Britain has an expression: “All fur coat and no knickers.” In the United States, we might say instead, “All hat and no cowboy.” Either way, we’d mean all talk and no substance, or something looks much better than it really is. . . . For years, Corpay marketed itself as offering large and small businesses fuel credit cards that promised savings, control, and transparency. Yet when the FTC looked under the hat, it found no cowboy. Beneath Corpay’s promises of big savings, the FTC alleged, stood hidden charges, misleading practices, and broken commitments.

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Ouch. And the barbed remarks only grow sharper from there. When discussing Corpay’s argument that certain of its fees (charged on a “per transaction” or “per gallon” basis) were not actually “transaction fees,” the court remarked: “We think that’s nonsensical. . . . We can slice the baloney only so thin.” All in all, the court was, very evidently, not persuaded by the majority of the defendants’ arguments.

Although this may appear to be a routine (albeit biting) decision regarding the underlying district court’s ruling, the real intrigue lies in what happens next. Where will the FTC go from here? As the court and the FTC noted, the FTC can no longer obtain monetary relief under Section 13(b) of the FTC Act. Thus, if the FTC wants to seek refunds for consumers, it must use its authority under Section 19 of the Act. Broadly speaking, this means that the Commission must complete the administrative proceeding it started in 2021 and issue a final cease-and-desist order. Once that order becomes final, the FTC can then head to federal court under Section 19 to pursue consumer redress tied to violations found in that order.

But what does that look like in practice? Will the Commission restart the stayed administrative action, use the Eleventh Circuit’s decision to shortcut the process and seek a quick, final administrative order? Only time will tell. However, one thing is certain – if you’re riding alongside the FTC, especially in the Eleventh Circuit, you better make sure there’s a cowboy under that hat.

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