A new decision out of the Middle District of Florida may signal further erosion of the FTC’s authority to seek monetary relief as it sets forth a heightened standard of proof the FTC must satisfy to support its disgorgement calculation. In FTC v. Vylah Tech LLC, the court found Vylah Tech, a small tech company, liable for disseminating false and misleading information regarding its computers. However, the court completely shut down the FTC’s demand for disgorgement of $3,400,000 in Vylah Tech’s purported revenues, awarding the FTC a whopping $0.
In a scathing opinion, the court admonished the FTC’s disgorgement calculation, stating that under the FTC’s current practices, “the disgorgement total is [obviously] a moving target.” First, the court found that the FTC’s calculation—based solely on bank records—was unreasonable. Specifically, the bank records were not specific enough to establish that the requested disgorgement figure “reasonably approximate[d]” the defendant’s unjust gains, as the records did not allow for identification of actual consumer transactions.