A company that defeated a U.S. Federal Trade Commission lawsuit claiming it duped consumers into buying print subscriptions has asked a U.S. judge to award $5.4 million in legal fees for the agency's “dramatic overreach.”
Attorneys for American Future Systems in a court filing on Tuesday said the FTC should be forced to cover legal fees after losing its case following a 15-day, non-jury trial in Philadelphia last year.
The FTC had alleged the company and affiliated entities tricked business and organizational customers into thinking they were receiving books and newsletters free with no risk. A judge threw out the case in March.
“FTC lacked evidence that even a single customer had been misled,” American Future Systems’ lawyers at DLA Piper and other firms said in seeking fees. “The contrast between FTC’s litigation position and the actual evidence is stark and dramatic.”
The FTC had no immediate comment, and attorneys for American Future Systems did not immediately respond to a request for comment. American Future Systems has denied any wrongdoing.
The FTC as part of its case reviewed millions of pages of documents and thousands of recordings of customer interactions. In court, the company said it “applied rigorous quality control measures to ensure adherence to its telemarketing script.”
The agency, according to American Future Systems, demanded tens of millions of dollars during pre-trial settlement demands. The company said a trial loss could have led to a “wide-ranging” court order posing “an existential threat to its ongoing businesses.”
American Future Systems said it was entitled to fees under the federal Equal Access to Justice Act, which can award a prevailing party that meets eligibility requirements based on revenue and size.
DLA Piper and the other defense firms applied for fees that are below their standard hourly rates.
The FTC could try to oppose the fee bid, forcing the U.S. court to rule on whether the agency’s case was factually and legally sound.
The case is Federal Trade Commission v. American Future Systems Inc, U.S. District Court for the Eastern District of Pennsylvania, No. 2:20-cv-02266.
For the FTC: Maris Snell of the FTC; and Heather Kelly of Pennsylvania Attorney General's Office
For defendants: Ilana Eisenstein of DLA Piper; Morgan Birch of White and Williams; and Paul Saint-Antoine of Faegre Drinker Biddle & Reath
