August 16, 2021
Partner Jean Noonan comments for Automotive News on Tate's Auto Group FTC settlement
On July 26, the Federal Trade Commission (FTC) settled with the owners of Tate's Auto Group for $450,000. This final settlement is substantially less than the initial settlement of $7 million in September 2020, which failed to materialize following Tate's bankruptcy proceedings last year. According to the FTC, it could not have pursued the $7 million settlement anyway due to a recent Supreme Court decision that limits the FTC's powers to seek monetary relief from companies.
Hudson Cook Partner Jean Noonan told Automotive News that at the conclusion of the bankruptcy proceedings, there was likely not much, if anything, left for the FTC. "The FTC would be last in line to get any money," she said. "The secured creditors would come first. While the FTC had a judgment, it was an unsatisfied judgment and probably an unsatisfiable judgment."
FTC Commissioner Rebecca Kelly Slaughter said in a July 29 statement the agency may have obtained more relief for consumers had it retained the powers recently stripped in the Supreme Court decision. According to Automotive News, Congress is working on returning those powers to the FTC. The Democratic-controlled House voted 221-205 on July 20 to pass the Consumer Protection and Recovery Act, which authorizes the FTC to go to court to seek financial redress from businesses that engage in "unlawful commercial practices such as false advertising, consumer fraud and anticompetitive conduct," according to the bill's summary.
Jean Noonan is a partner in Hudson Cook's Washington, DC office. She advises clients on consumer financial services, fair lending, marketing, financial privacy, and consumer protection matters. She counsels financial institutions and others in complying with laws related to consumer credit, privacy, telemarketing, and unfair trade practices. Jean represents clients in government investigations, examinations, and enforcement actions before federal agencies, including the CFPB, FTC, and federal prudential regulators, and in other ancillary matters. Jean is a former executive with the FTC, where she directed the agency's enforcement of consumer financial services laws.