Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—S.D. Ohio.: FTC motion to transfer allowed for similar telemarketing case in Florida, (Dec 9, 2013)

By Linda O’Brien, J.D., LL.M.

The FTC was entitled to the transfer of a proceeding seeking the production of documents to another jurisdiction where a related action was pending against a broker services company accused of soliciting consumers to pay for phony credit card interest rate reduction services, the federal district court in Cincinnati has decided (FTC v. A+Financial Center, LLC, December 5, 2013, Litkovitz, K.).

The FTC filed a complaint against A+Financial Center, LLC, among other companies, alleging that A+Financial engaged in a telemarketing scheme intended to induce consumers to purchase phony credit card interest rate reduction services in violation of the Telemarketing Sales Rule (TSR) in a federal district court in Florida. In August 2013, the FTC filed a motion to compel another company, Vantiv, Inc., to produce various documents pursuant to a subpoena that were related to its communications with A+Financial. Subsequently, the FTC moved to transfer the matter to the federal district court in Florida in the interest of judicial economy and consistency of outcomes.

The FTC asserted that it had worked with the receiver in the Florida litigation in its attempt to obtain the requested documents in order to assess whether Vantiv and its wholly owned subsidiary, National Processing Company (NPC), should be added as defendants. Since it was unable to obtain certain relevant documents related to the underwriting of A+Financial’s files by NPC, the FTC received authorization from the Florida court to issue subpoenas to Vantiv and NPC for the unproduced documents. The FTC contended that the Florida court was more familiar with the underlying claims and readily able to determine the discovery issues related to the subpoena.

In opposing the motion to transfer, Vantiv argued that both the Ohio and Florida courts were equally capable of deciding the issues presented the motion and also that the Federal Rules of Civil Procedure do not allow such a transfer.

The court found that it was within its discretion under the federal rules of civil procedure, to transfer motions related to subpoenas to the court overseeing the underlying litigation when warranted by the circumstances. First, the court noted that a similar motion to compel Vantiv and NPC to produce the relevant documents was pending in the Florida district court. Since the Florida court’s decision would impact the motion to compel before the court, the potential for inconsistent rulings existed.

Second, the federal rules for civil procedure provided a specific mechanism for transferring such motions to other courts when warranted. Finally, Vantiv failed to assert that the transfer would be prejudicial or unduly burdensome as it has already participated in the Florida litigation. Thus, the court concluded that the transfer was warranted since it was best to permit the court most familiar with the parties’ dispute fully and finally resolve the matter.

The case is No. 1:13-mc-50.

Attorneys: Bikram Bandy for the FTC.

Companies: A+Financial Center, LLC

Cases: ConsumerProtection FederalTradeCommissionNews OhioNews