Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—D. Md.: Ticket resellers' preemptive BOTS Act challenge unnecessary, (Jun 10, 2026)

By Wendy Biddle, J.D.

Due to parallel pending enforcement action, judicial efficiency warrants dismissal.

The federal district court in Baltimore, Maryland granted the FTC's motion for reconsideration and dismissed without prejudice a lawsuit brought by secondary-ticket market operators seeking to preempt enforcement of the Better Online Ticket Sales (BOTS) Act, concluding that judicial efficiency favored resolving the constitutional and statutory questions in the agency's own pending enforcement proceeding (Key Investment Group LLC v. Ferguson, No. 1:25-cv-02354-GLR (D. Md. Jun. 9, 2026)).

Background. In June, a group of ticked sellers filed a lawsuit against the FTC and four of its commissioners based on the FTC's enforcement of BOTS Act. The BOTS Act prohibits the use of automated software, or "bots," to circumvent security measures on ticket-sale websites and acquire tickets in excess of posted limits for resale. The plaintiffs acknowledged their involvement in the secondary-ticket market but maintained that they do not use bots to circumvent any security measures, and therefore that the BOTS Act has no application to their business activities.

The resellers framed their suit as a preemptive challenge, alleging that the FTC was attempting to misuse the BOTS Act to destroy their legitimate businesses and, by extension, the entirety of the secondary-ticket market, in a manner contrary to both the statute's text and the FTC's own mandate. They sought relief on five distinct grounds: a declaratory judgment that they do not violate the BOTS Act (Count I); injunctive relief barring the FTC from enforcing the BOTS Act against them (Count II); a declaratory judgment that they lacked the requisite knowledge necessary to support civil penalties (Count III); injunctive relief barring the assessment of civil penalties (Count IV); and a declaration that the BOTS Act is void for vagueness as applied to them under the Fifth and Fourteenth Amendments (Count V).

The FTC moved to dismiss the plaintiffs' declaratory action on November 24, 2025. The court denied that motion on April 28, 2026. The FTC then filed a motion for reconsideration of that denial on May 8, 2026. Plaintiffs opposed the motion on May 21, 2026, and the FTC filed a reply on June 4, 2026.

Separately, the FTC had filed its own enforcement action against several of the same parties before the same court. In May, the court concluded that the BOTS Act text applies broadly to “any person” who circumvents ticket issuer security measures, not only to the use of automated bots. The court also rejected constitutional challenges to the law and held that the FTC adequately pleaded its claims to proceed past the pleading stage (FTC v. Key Investment Group LLC, No. 1:25-cv-02716-GLR (D. Md. Apr. 28, 2026)).

Motion for reconsideration. The court granted the FTC's motion for reconsideration, reversed the earlier denial of dismissal, and dismissed the plaintiffs' complaint without prejudice. The court's reasoning rested primarily on principles of judicial efficiency and the proper sequencing of judicial review relative to ongoing agency enforcement proceedings.

The court acknowledged at the outset that no binding precedent directly governed the unusual circumstances presented; namely, the simultaneous pendency of a preemptive declaratory action brought by targets of agency enforcement, and the agency's own enforcement suit raising the same core legal questions. Nonetheless, the court concluded that the absence of directly controlling authority did not require it to maintain the declaratory action alongside the enforcement proceeding.

Central to the court's analysis was the observation that the constitutional and statutory questions the plaintiffs sought to litigate in their affirmative suit were already squarely before the court in the FTC's enforcement action. The plaintiffs were actively challenging the BOTS Act in that proceeding, meaning that the relief they sought in the declaratory suit could be fully obtained through their defenses and counterclaims in the enforcement case. Permitting both cases to proceed in parallel would therefore produce no practical benefit for the plaintiffs while imposing unnecessary burdens on the court and the parties.

The court drew on Supreme Court precedent to show why premature judicial intervention in agency enforcement matters is disfavored. Quoting FTC v. Standard Oil Co. of California, 449 U.S. 232 (1980), the court emphasized that judicial review sought at an early stage of agency proceedings is likely to interfere with the proper functioning of the agency, deny it the opportunity to correct its own mistakes and apply its expertise, and generate piecemeal review that is inefficient and may ultimately prove unnecessary once the agency process concludes. The court also invoked the principle that allowing respondents to an agency complaint to immediately seek judicial review of the complaint's averments would risk turning the agency from prosecutor into defendant before adjudication of the underlying matter concludes; a result the Supreme Court has expressly cautioned against.

The court further supported its conclusion by pointing to the parties' own conduct. Both sides had jointly requested that the court consolidate the initial discovery teleconferences scheduled in the two cases into a single proceeding, a request the court granted on May 22, 2026. The court read this joint request as a practical acknowledgment by the parties themselves that the two actions were sufficiently intertwined that consolidated management made sense.

Finally, the court grounded its authority to act in both Federal Rule of Civil Procedure 54(b), which permits revision of any non-final order prior to the entry of judgment, and in the inherent authority of district courts to manage their dockets with a view toward the efficient and expedient resolution of cases, as articulated by the Supreme Court in Dietz v. Bouldin, 579 U.S. 40 (2016). Because the order under reconsideration was an interlocutory ruling, it was not subject to the more stringent standards governing reconsideration of final judgments. The applicable standard required only that the moving party present new arguments or evidence, or demonstrate that the court had misapprehended a party's position, the facts, or the applicable law.

The court therefore dismissed the action without prejudice, leaving open the possibility that the plaintiffs could reassert their claims should the enforcement proceeding fail to provide an adequate forum for the resolution of the issues they have raised.

The Case is No. 1:25-cv-02354-GLR.

Judge: Russell, G.

Attorneys: Joshua N. Drian (Manatt, Phelps and Phillips LLP) for Key Investment Group LLC. Noah T. Katzen, U.S. Department of Justice, for Andrew N. Ferguson.

Companies: Key Investment Group LLC

Cases: ConsumerProtection MarylandNews FederalTradeCommissionNews GCNNews