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Federal Deception Law: 8.9.3 Attorney Fees and Costs

The RICO statute provides that an injured person “shall” recover costs, including a reasonable attorney fee.545 The attorney fees awarded need not be in proportion to the amount of damages.546 Singling out RICO defendants for the imposition of attorney fee liability does not deny them equal protection of the laws.547 A prevailing defendant, however, is not entitled to fees.548

Federal Deception Law: 8.9.5 Injunctive and Other Equitable Relief

The district courts have jurisdiction to prevent and restrain RICO violations by means including, but not limited to, compelling divestiture of interests in an enterprise, placing reasonable restrictions on a person’s future activities or investments, and even ordering the dissolution or reorganization of an enterprise.556 The U.S. Attorney General is expressly authorized to seek such relief,557 but whether private civil litigants may obtain it is a question that has divided the courts.

Federal Deception Law: 2.4.1 Scope of the Used Car Rule

The FTC’s trade regulation rule on the sale of used motor vehicles (“the Used Car Rule”)231 applies to “motor vehicles,” defined as any motorized vehicle other than a motorcycle, with a gross vehicle weight rating under 8500 pounds, a curb weight less than 6000 pounds, and a frontal area less than forty-six square feet.232 The Used Car Rule applies to any “used vehicle,” defined as a vehicle driven more than the limited use necessary in moving or road testing a new vehicle prior to delivery to a

Federal Deception Law: 2.4.4 Remedies for Used Car Rule Violations

Violations of the Used Car Rule violate the FTC Act, and the FTC has brought enforcement actions for such violations.265 As with any FTC rule, there is no private right of action under the FTC Act for rule violations.266 Nevertheless, a rule violation should be actionable under a state UDAP statute, since an FTC rule should guide courts in interpreting state UDAP statutes.267

Federal Deception Law: 2.4.5 When Buyers Guide Warranty Disclosure Conflicts with Warranty Provided in the Sales Agreement

The Used Car Rule states clearly that the dealer may not make any statements, oral or written, that contradict the disclosures in the Buyers Guide. The dealer can negotiate the warranty coverage so that the final sale has different terms than those first disclosed on the Buyers Guide. However, in such a case, the final warranty terms have to be identified in the contract of sale and summarized on the copy of the Buyers Guide that is provided to the consumer.271

Federal Deception Law: 2.1.1 Introduction

The Federal Trade Commission (FTC) has broad authority under the FTC Act to prohibit unfair or deceptive acts and practices in trade or commerce and to enact trade regulation rules that define and prevent such practices.1 The FTC has issued sixteen such trade regulation rules, and many of them establish important standards and requirements for sellers, creditors, and others.

This chapter focuses on eight FTC trade regulation rules of special relevance to consumer law:

Federal Deception Law: 2.2.1 The Nature of Trade Regulation Rules

Trade regulation rules (TRRs) “define with specificity acts and practices which are unfair or deceptive acts or practices. . . . Rules under this subparagraph may include requirements prescribed for the purpose of preventing such acts or practices.”22 Trade regulation rules not only enumerate practices that are unfair or deceptive but add requirements to prevent such practices—for example, three-day cooling-off periods, required disclosures, and notices placed in contracts that alter substantive rights.

Federal Deception Law: 2.2.2 Scope

The FTC can enact trade regulation rules (TRRs) with respect to unfair and deceptive practices “in or affecting commerce.”29 This is a broad standard applying to almost any commercial activity. Nevertheless, there are a number of statutory exemptions to the FTC’s authority and thus to the scope of its TRRs.

Federal Deception Law: 2.2.3 Substantive Scope of FTC Rulemaking

The FTC Act gives the FTC authority to adopt rules defining unfair or deceptive acts or practices in or affecting interstate commerce.36 In order to declare an act unfair, the FTC must find that it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.37 This standard is discussed in detail in NCLC’s Unfair and Deceptive Acts and Practices.