Despite WHR’s diligent efforts to respond to each criminal intrusion, to improve the security of its own network and those maintained by the Wyndham-branded hotels, and its cooperation with the Commission’s investigation, the FTC filed this complaint on June 26, 2012. The gravamen of the FTC’s allegations is that defendants violated Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), by “fail[ing] to maintain reasonable and appropriate data security for consumers’ sensitive personal information.” Compl.

L. No. 85-909, § 3, 72 Stat. 1749, 1750 (1958) (codified as amended at 15 U.S.C. § 45(a)(2)) (emphasis added). Contrasting the amended activity-specific language of the Packers and Stockyards Act exemption with the status-linked language of the common-carrier exemption (and the original Packers and Stockyards exemption) shows that Congress made a deliberate choice to treat the two exemptions differently.

Neither the FTC Act nor any precedent supports Wyndham’s claim that the type of injury consumers suffer as a result of the breach of payment card information does not support an unfairness allegation under15 U.S.C. § 45(n). (Wyndham Mot. 12.) The Complaint clearly alleges that consumers were injured by Wyndham’s unfair data security practices: Consumers and businesses suffered financial injury, including, but not limited to, unreimbursed fraudulent charges, increased costs, and lost access to funds or credit.

An act or practice is unfair if it causes or is likely to cause substantial injury to consumers that is not reasonably avoidable by consumers themselves and is not outweighed by countervailing benefits to consumers or to competition. 15 U.S.C. § 45(n); see generally Orkin Exterminating Co., 108 F.T.C. 263, 362 (1986); Fed. Comm’n Policy Statement on Unfairness, appended to Int’l Harvester Co., 104 F.T.C. 949, 1070-76 (1984). An act or practice is deceptive if (1) it is likely to mislead consumers acting reasonably under the circumstances, and (2) it is material; that is, likely to affect a consumer’s purchase decision.

This argument fails for six reasons. First, the argument that if a company offers a refund policy the falsities of its claims are irrelevant and harmless has been repeatedly rejected as a defense to a claim under 15 U.S.C. §45(a)(1).101 “‘Anything might then be advertised as long as unsatisfied customers were returned their money.’”102 Second, there is no exception for a refund policy under section 327.

If the Commission concludes that the Case 2:16-cv-05599-PD Document 25-1 Filed 12/30/16 Page 10 of 31 5 respondent has engaged in prohibited conduct, it can order the respondent to cease and desist, but cannot order monetary relief. See 15 U.S.C. § 45(b). Alternatively, the Commission may file a federal lawsuit under Section 13(b) of the FTC Act, which authorizes the Commission to sue in federal district court whenever it has “reason to believe” that the defendant is violating or is about to violate any provision of law enforced by the FTC (including Section 5).

If the Commission concludes that the Case 2:16-cv-05600-PD Document 23-1 Filed 12/30/16 Page 10 of 31 5 respondent has engaged in prohibited conduct, it can order the respondent to cease and desist, but cannot order monetary relief. See 15 U.S.C. § 45(b). Alternatively, the Commission may file a federal lawsuit under Section 13(b) of the FTC Act, which authorizes the Commission to sue in federal district court whenever it has “reason to believe” that the defendant is violating or is about to violate any provision of law enforced by the FTC (including Section 5).

First, Zurich’s reading of these exclusions ignores the bring-back coverage provided by Exclusion H for the very type of FTC claims at issue in this case. Again, Endorsement No. 10 restricts Exclusion H by confirming that it “shall not apply to” “a Regulatory Proceeding that may constitute a violation of Section 5(a) of the Federal Trade Commission Act (15 U.S.C. 45(a)), including a Consumer Redress Fund established in resolving such a Regulatory Proceeding . . .” Exhibit 2 at Endorsement 10.H.(1) (emphasis added).

Regardless, 15 U.S.C. § 45 empowers the Federal Trade Commission, not individual plaintiffs, to prevent unfair competition and “unfair or deceptive acts or practices in or Case 2:10-cv-01764-ROS Document 15 Filed 09/24/10 Page 11 of 14 676990.2 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B r ya n C a v e L L P T w o N o r t h C e n t r a l A v e n u e , S u it e 2 2 0 0 P h o e n ix , A r iz o n a 8 5 0 0 4 -4 4 0 6 (6 0 2 ) 3 6 4 -7 0 0 0 affecting commerce” by bringing a civil lawsuit. 15 U.S.C. §§ 45(a)(2), 45(m)(1)(A), 57b(a). Chianella therefore has no cause of action under 15 U.S.C. § 45. L. Chianella Fails To State A Claim For Unjust Enrichment. Chianella alleges that unspecified “Defendants” were unjustly enriched through various fees and payments “at Petitioner’s expense.”

But the Bureau’s functions are not meaningfully different from those performed by the FTC when the Court decided Humphrey’s Executor in 1935—indeed, the Bureau actually operates within a narrower slice of the economy. In 1935, the FTC had authority to prohibit “unfair methods of competition in commerce” by any person, partnership, or corporation. 15 U.S.C. § 45 (1934). The Bureau similarly may prohibit “unfair” (as well as deceptive and abusive) acts and practices—but only in connection with consumer financial products or services.