FTC, ABA dismiss remaining counts

By Kimberly Atkins The Daily Record Newswire The Federal Trade Commission and the American Bar Association have agreed to dismiss the remaining counts of the lawsuit the ABA brought to stop the agency from enforcing its "red flags" anti-data theft regulations against lawyers. However, the ABA reserved the right to renew its claims on the remaining counts of the complaint should the FTC appeal the summary judgment. In October, a federal judge granted the ABA summary judgment on one count of the complaint, blocking the FTC from enforcing the "red flags" rules against lawyers. The lawsuit also sought other declaratory and injunctive relief. However, after the summary judgment ruling, the parties were asked to file a joint statement explaining their positions as to whether the remaining claims need be addressed. Last week, the ABA and the FTC filed the joint statement as well as their respective proposed orders. Both the ABA and the FTC agreed in the filings that the court should rule that the regs are not applicable to attorneys, and that the remaining counts should be dismissed. If either of the proposed orders is accepted, it would bring to an end the first round of the legal battle between the attorney group and the agency, although the FTC has until January to decide if it will formally appeal the court's ruling on the summary judgment order. The FTC stated in the joint statement that it assumes "because the court granted summary judgment on Count I of the ABA's complaint, it intended to preclude 'appli[cation of] the Red Flags Rule to lawyers engaged in the practice of law,' regardless of the particular billing arrangement entered into between the attorney and client." But it reserved some wiggle room in case the court enters a narrower ruling. "If, however, the court did not intend such a broad result, the court should enter an appropriately narrower injunction, or permit further proceedings to allow the parties to brief the appropriate scope of the injunction," the FTC said. The FTC also asked the court not to extend the injunction "as requested by the ABA [to] 'any successor regulation promulgated by the Commission under §114 of the Fair and Accurate Credit Transactions Act of 2003 ... against lawyers engaged in the practice of law.'" "It is the Commission's position that such relief would go beyond the issues asserted in the ABA's complaint and adjudicated by this court," the agency said in the joint statement. The FTC has until mid-January to decide if it will appeal the ruling that precludes it from enforcing the rules against attorneys. Published: Tue, Jan 5, 2010

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