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FTC v. LeadClick Media, LLC

United States Court of Appeals for the Second Circuit

June 3, 2016, Argued; September 23, 2016, Decided

Docket Nos. 15-1009-cv, 15-1014-cv

Opinion

 [*162]  Chin, Circuit Judge:

In this case, plaintiffs-appellees the Federal Trade Commission (the "FTC") and the State of Connecticut (the "State") seek to hold defendant-appellant LeadClick Media, LLC ("LeadClick") liable for its role in the use of deceptive websites to market weight loss products. LeadClick managed a network of affiliates -- known as "publishers" -- to advertise on the internet products of its merchant client, [**3]  LeanSpa, LLC and related entities (collectively, "LeanSpa"). Some of these affiliates created deceptive websites, falsely claiming that independent testing confirmed the efficacy of the products. The FTC and the State brought this action below, asserting claims against LeadClick under Section 5 of the Federal Trade Commission Act (the "FTC Act"), 15 U.S.C. § 45(a)(1), and the Connecticut Unfair Trade Practices Act ("CUTPA"), C.G.S.A. § 42-110b(a). The FTC also filed a claim against defendant-appellant CoreLogic, Inc. ("CoreLogic"), LeadClick's parent company, as a relief defendant.

The district court (Hall, C.J.) granted summary judgment in favor of the FTC and the State, holding that (1) LeadClick violated the FTC Act and CUTPA as a matter of law, and (2) LeadClick was not entitled to immunity under Section 230 of the Communications Decency Act (the "CDA"). It also ordered CoreLogic to disgorge money that it had received from LeadClick.

We affirm the district court's grant of summary judgment for the FTC and the State with respect to the claims against LeadClick, reverse as to the claim against CoreLogic, and remand with instructions to the district court to enter judgment in favor of CoreLogic.

BACKGROUND

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838 F.3d 158 *; 2016 U.S. App. LEXIS 17383 **; 2016-2 Trade Cas. (CCH) P79,778

FEDERAL TRADE COMMISSION, STATE OF CONNECTICUT, Plaintiffs-Appellees, v. LEADCLICK MEDIA, LLC, successor to LeadClick Media, Inc., CORELOGIC, INC., Defendants-Appellants, LEANSPA, LLC, a Connecticut limited liability company, NUTRASLIM, LLC, a Connecticut limited liability company, NUTRASLIM U.K. LIMITED, a United Kingdom limited liability company, DBA LeanSpa U.K. LTD, BORIS MIZHEN, individually and as an officer of LeanSpa, LLC, NutraSlim, LLC, and NutraSlim U.K. LTD, RICHARD CHIANG, individually and as an officer of LeadClick Media, Inc., ANGELINA STRANO, Relief Defendant, Defendants.1

Prior History:  [**1] ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT.

Consolidated appeals from a judgment of the United States District Court for the District of Connecticut (Hall, C.J.), granting summary judgment in favor of plaintiffs-appellees the Federal Trade Commission and the State of Connecticut. Defendant-appellant LeadClick, LLC challenges the district court's rulings that (1) it is liable for deceptive practices under the Federal Trade Commission Act and the Connecticut Unfair Trade Practices Act and (2) it is not entitled to immunity under Section 230 of the Communications Decency Act. Defendant-appellant CoreLogic, Inc., LeadClick LLC's parent company, challenges the district court's ruling that it is liable as a relief defendant for the obligations of LeadClick, LLC.

FTC v. LeanSpa, LLC, 2015 U.S. Dist. LEXIS 26906 (D. Conn., Mar. 5, 2015)

Disposition: AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

CORE TERMS

affiliate, deceptive, sites, fake, consumers, FTC Act, advertising, immunity, network, marketing, publisher, provider, websites, products, pages, interactive, practices, district court, internet, deceptive act, computer service, deceptive practices, participated, traffic, merchant, customers, employees, legitimate claim, repayment, advances

Civil Procedure, Appeals, Summary Judgment Review, Standards of Review, Antitrust & Trade Law, Consumer Protection, Deceptive & Unfair Trade Practices, Federal Trade Commission Act, Federal Trade Commission Act, Scope, Business & Corporate Compliance, Computer & Internet Law, Content Regulation, Communications Decency Act, Parties, Joinder of Parties, Preliminary Considerations, Equity, Relief