SSN Webinar - Chevron Decision - 2024

hey everybody it's Jonathan gilam CEO of mfactor uh makers of field watch um really excited about what we have for you today let me start with a couple of housekeeping items keeping items uh David Bland uh is in Houston now and without power so we will not enjoy his uh thoughts and hosting of the session so I've been asked to step in his stead and and um hopefully I'll do I'll be able to fill his shoes with this and keep you keep everything on point as we say very excited to have everybody here welcome appreciate your time um I think we have a fantastic um uh webinar for you webcast with these two esteemed experts Brian Bennett from the DSA and Linda Goldstein at Baker Hostetler um first let me give a shout out for David he would appreciate if I asked everyone to go ahead and go to the social selling News website and subscribe um everyone on this call is uh is eligible for a free print subscription mailed to your home and if you just plug in your address you'll get the next copy of the SSN which will probably feature a cover story on this very topic that we're talking about today so uh he would appreciate that and that article's coming so stay tuned and stay a breast of all the news with uh with David's publication social sign news Okay so I'd like to introduce um the topic here um actually let me start with introducing our um our panelists here i' talk a little bit more about what they do so David is the SV I mean Brian is the SVP of the direct selling Association he handles matters of policy and regulation at the DSA and has for many years and it's pretty much a subject matter expert there so perfect for this topic um hi Brian and Jonathan appreciate you having me of course and Linda uh handles advertising regulatory law for Baker Hostetler and is involved in many investigations and and cases at the firm uh with regard to advertising and consumer law so thank you Linda for joining and anything you guys want to add to your bios I would appreciate thanks for having me good to have you okay we are here to discuss a very exciting big decision at the Supreme Court called the ler brigh case also known as a Chevron Defence case which goes back I believe 40 years um lots of folks in the channel very interested if not some delighted about this ruling that basically says going forward the courts must exercise their independent judgment in deciding whether an agency has acted within its statutory Authority which means ostensibly that the courts should be less reliant on an agency's own experts I.E FTC F SEC FDA uh and more reliant on the judges themselves to better defined ambiguous rules now we all know in this channel the rules are indeed ambiguous uh so on its face this appears to be a real win for the channel at least when it comes to regulatory litigation but it is is too early to say uh the case has been decided but there's much more and that's brings us to our our webcast today so thank you guys for joining um I'd like to start with um uh Linda um give us a big picture on this ruling what is was chevron chevron difference maybe kind of yeah thanks Jonathan I mean pretty much as you said the the Chevron Doctrine has been the law of the land for four decades and essentially what it said was that where a statute is ambiguous or a law is ambiguous the courts can give and actually should give great Defence to the agency that's responsible for the law or the statute in question so for example in an advertising case under the Chevron Doctrine if the if the FTC and we've had many cases where this has happened much to our um dismay where the FTC is alleging that advertising claims are misleading or deceptive um which is the standard under the Federal Trade Commission act the FTC could basically come in with no evidence that consumers were actually deceived and basically say based on our you know facial review of the advertising we believe it's misleading and deceptive and even in cases and this has happened to us where um the defendant has brought in empirical evidence like consumer surveys that show that consumers weren't deceived in many cases that wouldn't be enough for the court to disregard what the FTC said so in many enforcement actions it really was even though the Federal Trade Commission was the plaintiff they weren't like a plaintiff in another kind of case they were kind of the judge and the jury and what the court said here is basically the agencies do not have the authority to interpret the law that is up to the courts um and that you know the the big impact of that from FTC or other agencies is that they will no longer get the benefit of the doubt in cases which you know they've really relied on um and I know we'll get into this a little bit more but you know the FTC has brought some enforcement actions recently where they've taken positions that are really a little out there and the courts have kind of gone along with it um again really because of this Chevron Doctrine and the notion that that their views should be accorded great weight wow yeah so uh so a big switch from the status quo uh pre Chevron that's great to hear um Brian so followup to this would be how do you think things will change in Washington if at all now that it's been overturned so what what kind of decision might be made there what what could be happening there based on this decision yeah I think just kind of starting off a level said it's interesting I was traveling on Friday when the decision was handed down and my inbox and my text chain was you know just blowing up with emails and texts about about the decision I was in the car for five hours so didn't have a chance to really read it or digest it but you know when I got to a good place and I read all the news it was definitely cheered by a lot of people around in Washington DC you know trade associations like DSA lobbyist and K Street and specifically Republican members of Congress who said this Returns the power to the people so to speak because as Linda said um the kind of push back against Chevron Defence was that these decisions were being made by agencies um that were you know agencies lend to have political appointees that's great but a lot of the work is Staff thriven though um at these agencies so it's essentially not laws by Congress and these members of Congress are elected these interpretations of law are made by for the most part professional staff of regulatory agencies so the news was kind of returning power to the people so to speak I think you know I I I think back to for those members in the line Danny Lee CEO for life's are DSA chairman for this term um his big push has been gaining influence and I don't think he thought that a Supreme Court ruling would be the gaining influence aspect I don't think he really anticipated that but um certainly I think that's what it is so the impact here in Washington is more of when considering legislation many times members ask what does the agency think what does the FTC think the SEC think all these agencies think they're not going to stop asking that but I think it's also trade associations and you know defendants were almost kind of in the background they started off definitely um the odds were against them you know the odds aren't in your favor um so speak as they kind of started off and it kind of starts as level set I think more than anything else I think amikas briefs filed by trade associations for example will have increased interest you know DSA file to amikas bre and the neora case which I think neora said work extremely helpful obviously we'll continue to do that but I think in terms of the litigation standpoint those will have increased influence when you kind of look at those decisions um but it's interesting times here in DC there's not many legislative left um here in DC we about to go in the convention the August recess and then they go back home for election so I think a lot of people are really starting to think about what this means but don't really have time to implement it um we could see a lot more kind of reauthorizations of agencies and what that means is um how it used to be done it hasn't been done this way in about 20 to 30 years but agencies were reauthorized pretty much every year and if you had to update kind of statutory Authority or anything Congress kind of reauthorized these agencies you know there hasn't been an FTC reauthorization in about 30 years so I think they can look at reauthorizations of agencies I think oversight will be an increased kind of priority as well you know the the FTC actually has a budget hearing tomorrow but it's really more of an oversight hearing but here at DSA I think we've really just um you know been anticipating this decision for a couple years now we've increased our support of FTC oversight of Appropriations processes essentially budget language saying they can't do certain things unless they meet certain requirements and I know we're going to get into this later and my final note on this Jonathan will be I think with great power comes great responsibility and I think a lot of people don't really realize what that is right now but I think that's going to be an aspect of this as well that there will be more you know specific statutes passed by Congress which can be good but can be bad as well so right and that's uh that's one of the I think uh uh we we want want to look at the consequences of this because we know that the ru making hasn't stopped at FTC and lenina Khan is still there um so let's let's get into that a little bit so as far as FTC Linda what do you think do you think this ruling will affect their day-to-day operations as their current or their current priorities or you know with the emphasis on new rules and issuing notices of of you know penalty offense everyone in this call is familiar with the penalty offense letters that uh came out in the last few years um so do you think it'll change the day-to-day at FTC so you know just in terms of their day-to-day enforcement I I I don't think it's going to change much I mean the Chevron Doctrine mostly becomes relevant when you get to litigation um but what I what I do think could could happen or where it could affect their enforcement is they've brought a number of cases um particularly under Rosa which is the statute that govern subscription marketing and recurring billing where they have you know taken extreme positions on what the statute requires um and they've gone to litigation on some of these I and I think in part because they were empowered by the fact that they believed the court would defer to their views even if the their views were inconsistent with with the statute um so I think you know they it has been very very difficult in the certainly under Lena Khan's leadership to settle cases with the FTC even where we have believ that the positions they were taking were unreasonable I think it may Empower um companies who can afford to um to go to litigation more on on those issues in terms of the rule making I I you know I think it's kind of an an iron an ironic um potential outcome I think they they may try more Ru making so that they can get a more specific reading of the statute but I think those rules are going to be much more vulnerable to attack and we saw this um just last week I mean I think this has kind of been a little bit of a two- punch against the FPC because first you had you know the dismantling of Chevron which definitely weakens their Authority and then I believe it was last Thursday or Friday um a district court in Texas um that was hearing a challenge to the ftc's complete ban on non-compete um which the chamber was one of the challengers in that case um and and the court preliminarily um handed down an injunction preventing the implementation and enforcement of that rule um they will issue their final decision I believe on the 31st um I think they said the 31st of August but if you're reading the te leads there they already already said and cited um ler that the FTC did not have the authority to issue a a rule on the competition side which is you know more on the you know antitrust comp you know competition side of the ftc's house so it's not necessarily binding on what they might do in the consumer protection Arena but I think seeing the court refer to the ler case um in basically refusing um to allow the the implementation of this rule um maybe it will be you know put a little bit of a of a a constraint on kind of the rulle making frenzy that um they've been engaged in for the last several years um but I I also think the flip side is it may encourage them to do more Ru making perhaps not not as Extreme as some of the rules they've done because they need those rules again to get money I mean the rul making was largely a a reaction to the Supreme Court's decision in AMG where they stripped them of their authority to get money under 13B so I think they'll still be looking to do rules but maybe they'll be a little bit um tempered uh and how far they try to go with those rules well that was actually my next question was 13B so you know and I guess you answer the question do you do you think that this loss of Chevron will alter their re enforcement strategies like the strategies that they employ to try and get that money well again um you know I I the best way for them to get money is by promulgating rules because they have can and have pushed those through really without a lot of due process um but as I said I think you know maybe maybe there'll be a little bit of um restraint in terms of what those trade regulation rules are you know on the notice of penalty offenses and enforcement under that I I again think that um that that that whole strategy was vulnerable to begin with because you know the the not the notice of penalty offense Authority basically says that you can send notices to companies who are engaged in a certain practice if there was a previous case where um a defendant engaged in or company engaged in similar conduct that was found to be unlawful but there was a vulnerability there because you know again that that Authority goes back decades and the practices that are in effect today are not like the practices that were in effect when a lot of those um orders were issued but in addition again th that that whole enforcement strategy is based on their interpretation of you know what conduct was lawful and unlawful and whether it's you know what they're challenging now is similar to what was found to be deceptive you know 30 or 40 years ago so you know they they they may turn to that because there you know their Arsenal is is losing a lot of weapons but um I I think they may have more challenges with that approach as well yeah if I could just say Jonathan Linda just just a couple things first on the rule and then on the enforcement um I think on the rules I think they always need to Linda and their notice and proposed rule making a and PRM State The Authority they have to issue a rule right and I think in the consumer protection space it's uh section 45n typically of that which they're likely to cause a substantial injury sorry I'm reading from this I don't want to misquote it likely to cause a substantial injury to Consumers which is not reasonably avoidable by consumers themselves and not out outweighed by kill veiling benefits to Consumers so Ru makings they always need to State kind of and I think if you look at the earnings claims and the business opportunity rules they always need to have a reason that they have the authority to issue rules I think that will be beefed up as they issue the rules they might want to go into that a little bit more they might go not go back to the drawing board entirely but um in anticipation of litigation of rules maybe beef up that kind of section and theirm and you know nprm in the future um I think people I've talked to in terms of enforcement you know I I you look at and Linda mentioned the non-compete which is is a whole other thing but um but if if you look at specifically new yor you know in the complaint to neora and the decision to neora they didn't talk about Chevron once um and and the complaint so I think in our space I don't know how much of an impact it will have I think it's interesting as well that kind of the blowback on this is that well it will require judges to have technical expertise right in cases I mean again going back to these cases neora burn loans before that I mean the courts get pretty detailed looking at these compensation plans so I think in our space they're already kind of doing that um they already need to dig into a lot of this data and I'm sure their head spinning a lot of times looking at all the data that they're presented for an industry that maybe they don't you know have a full understanding of and our industry is not unique in that I know I've seen a lot of kind of fress on FDA which a lot of members on this call are interested in um you know courts don't have technical expertise in FDA you know they don't know the impacts of certain elements of drugs and things like that and um although the agency will be able to put forward their interpretation of it to a certain extent they're making judges kind of become experts so that's kind of the other side of that as well so I think there's a background and underpinning in kind of the rul making process that the FTC might have to do a little more work in those but I think also enforcement for our space um you know I think it won't impact it and I think you still and something we didn't get into I think it's a very positive decision but I think Linda is a very season litigator you'll agree it's not a slam dunk by any means against the agency it's not like you're all you're always going to win against an agency it puts you in more level footing but you still have to go in front of a judge um so it's helpful but it's not I don't want anyone to come away from this thing oh we're always gonna win um no I I totally agree with that not not not at all and there is also there is another case called the Skidmore case in which holds that it's it's not as strong as Chevron was in terms of giving difference but it kind of said still acknowledges that the FTC is expert and their views should be given respect which is a little lower of a standard than difference but I agree I agree with Brian um I I I think it again I I said this earlier but I really think this is how it's going to play out I think it's going to be a case by case um impact um that individual defendants will have to make based on you know the strength of their case and the impact if any I think would be limited to you know cases where the FTC is taking a really extreme position um otherwise you know I I think the likelihood is that the court will would probably come out the same way as the FTC well on that note and and it's I don't think we discussed this before in our prep call but if this had been in effect prior to neora what do you think the outcome would have been different I mean I don't think so no um you I the judge didn't defer the judge did defer to the company in that case so maybe not but I mean I guess you a wine so I think it's it's it's more of a question of would it have been you know neor won obviously so I think would have been more of a slim dunk now I mean again as I mentioned before kind of where my mind went Linda was I look back at the newor complaint even this morning the decision they didn't mention Chevron once and it's interesting I was on a call last week with somebody who I'm sure Linda is very familiar with I won't say their name on this call but I'll text Linda after but um they kind of said they spent some time in the FTC general counsel's office you know FTC has a general council's office who you know if there is litigation the general council's office mostly spear has that effort um and they were saying when I was with the general council's office Chevron was usually one of the last arguments that we made you know they still made it just so it's there um you know I feel like I'm saying all this and I just want to reiterate I don't want to understate or overstate the impact of the decision I know I may be like you know the the the skeptic on this but it was a very major decision these are just things that I've been learning the past week um on talking to people that I think know a lot more than I do about this um but yeah I don't think it what have impact in the OR especially since they won I think we could have looked back on it if the case went the other way but no I don't think would have impacted it yeah I was thinking maybe more just in the case being brought in the first place right yeah I mean I think that's yeah I I deferred to Linda to that and and how she's kind of advising clients and this may Linda change how kind of you advise clients on you know I mean you know the reality is it it really it I don't think it will have much of a change on how we advise clients because going in front of a judge it's still a crapshoot so um I think as a you know this it's a it's a great discussion for constitutional lawyers and our constitutional and appell at lawyers I mean they're having a field day with the analysis but I think from a practical standpoint um even you know even in cases where the FTC is not the one that's going after our client it's a you know a class action or whatever you know that the outcome could very much depend on the jut and that's as much of a crapshoot as anything and in fact you know what one I guess maybe negative outcome of this is you could get courts all over the country reaching different conclusions whereas whether you like it or not what it was you know basically to the extent that there was difference although I agree with Brian you you rarely see that as part of a decision even if you didn't like it you kind of knew where the FTC stood because they you know basically the rulings would repeat you know what they wanted so um you know it may it may have a little bit of that impact but it it's not going to change how we advise clients um much at all I don't see that yeah I would I would add to that and David had a question for me um that he put in the chat uh that the balance of power in DC has now shifted but an emphasis on compliance remains critical for a direct selling company what are you advising clients that inquire about last week's Landmark decision I think it's similar to you right so we've seen over the years a lot of change in the regulatory landscape none of it really changes the requirements for direct sales companies and their fields to be honest about their businesses uh not mislead consumers so I don't think that'll ever change from the on the boots you know boots on the ground compliance standpoint right um I I don't think it makes a difference maybe down the road um you know I don't know but uh you know if you get nailed by the FDC you may have a better chance in court but our message is it's a very expensive company killing opposition to wait for that point right so you're still on the hook for having a clean house and making sure that um that your field is compliant and that you don't get in the spot in the first place this this seems much more of a litigation constitutional issue which is way down the road for a lot of companies do uh don't I think we won't really know the impact of this for a year at I'm gonna say at least a year you know I mean I think the non-compete decision I think they cited Chevron once Linda I looked at the case of I think they cited Chevron excuse me once um so I think we'll see it maybe more kind of down the line but it's more I don't want to call it more academic right now but I think the on the ground impact you know the question we always get for rules and legislation and things like that is well how is my company going to operate differently from yesterday to today for example when this rule or the statute went into effect I don't think it's anything right now I think to your point Jonathan you know when when the penalty offense letters went out you know we had lots of conations with our members over that um and I mean we just said stay the course you know if anything they said look what we've been doing for the past three five seven eight however many years you know walk into your CEO's office and say this is working you know this is why we're doing this so I think if anything this is one more thing of this is why we're doing this because they're going to give us a fair Shake now um especially after New York when they mentioned compliance and things like that so I think you know this this this just emphasizes the importance of all of this more than anything else do you think that it could change the dsa's approach to advocacy on behalf of direct sellers yeah I think we need to and again I think we're we're only a week or so removed from this and ironically enough immediately after this we have a call with our govern relations at our general counsel committee so um my answer now could change in a couple hours from now and they're they're much smarter people than I but yeah you know I think we need but we also need to take the lead of um what Congress is doing on this too and work ourselves into that you know Linda if there's I talk about FTC reauthorization if there's something you know more specific that you need to talk about from a deception standard that could help you know just just not direct seller specific but look to see what kind of things Congress is planning to do especially with the power dynamics potentially shifting this November um so yes I think so I can't articulate those right now again it's you know the conversation around the Beltway it's almost like a dog caught the car moment a little bit it's people were cheering this and they should have and I I I agree you should share this this was I think great for you know that to give Congress a fair Shake people the fair Shake I think company's a fair Shake Association a fair Shake but when you get down to the nuts and bolts of okay what specific kind of things are you going to do I I I have not heard much from people um I think we're all still trying to kind of figure this out so that's a long way of saying yes probably but I just don't know how yet so okay yeah um and I think the I think the impact you know to the extent you know people are cheering which you know I agree with Bennett with Brian I mean I wouldn't necessarily um you know fear this as a major victory one way or another but I think it feels more important because of what the FTC has been doing under um chairman Khan's leadership uh and and they have taken some extreme positions but to Brian's Point um currently I mean Congress for example was you know and and and President Biden all over doing something about junk fees um just as much as the FTC was so you know I think we will need to see also you know how this does impact um what Congress may do in terms of its oversight and reauthorization and you know passing more specific statutes and you know sometimes specificity isn't always good ambiguity uh often helps so I I 100% agree with Brian I mean I think we have to you know wait a while to see how this shakes out but it's from at least from our perspective it's not affecting any advice in the short term and I think you know going back to the Congressional perspective because that's you know very very close to my heart obviously I I think it's difficult to get legislation through right now and it's easy to kind of just make it ambiguous um ply because less are argument form for ambiguous statutes um we just say look very generally here's and then there is a sense that we'll just push it off to the agency to enforce you know but here's kind of the general guidelines that they need to have a lot of disagreements form sometimes when you get into specifics um and it takes a long time I mean you think it's hard to legislate now just just imagine what happened and you need to get into very specific things not only in our sector but other sectors you know You' get into very specific things I mean deals fall apart based on that you know privacy legislation is I think Linda is aware of this is very hot right now in DC and I mean that's falling apart over specifics um of things so I think that's so again I think it's you know with great power great responsibility and I think it's a good Watershed almost moment for um you know interest to kind of get their you know very specific things out there but that also can hold hold up the process as well and you don't want the perfect to be the enemy of the good but I think it almost needs it's gon to have to be sometimes thanks Brian that's great um so Linda you had mentioned other threats um the FTC is not the only threat to direct selling companies can you talk a little bit about the regulatory threats that come from that are unchanged maybe from federally at the federal level or state level I.E I think I heard you say on a prep call this is not a get out of jail free card for anyone correct well well again I mean you have the state AG Attorneys General that have been you know very active in this Arena um you know you have you have doj um in in cases where it might be really um really egregious so yeah the FTC is is not is not the only um entity at at play here and I will say what we have seen historically um and I you know I I hate to say I've I've been able to see this pendulum swing as as often as it has but when when the when the FTC is you know less active you see the state AGS ramp up um so there's always you know checks and balances but you it there's there's never going to be a time and and again Brian mentioned this I'll just reiterate it nobody should interpret this as you know wow the standards have just changed the standards haven't changed at all in terms of you know what you should be doing from a compliance standpoint I think just one more thing Jonathan of interest um you know independent contractor status there's litigation ongoing um one of the main PL Tift is a coalition for Workforce Innovation I serve as the vice chair of that Coalition actually we're litigating the Department of Labor independent contractor rule I think this could play I I I haven't spoken to Council on this yet on this and I don't know if they're going to file anything but this could play into it though um because that is a very broad interpretive rule that they have so um that that could be another Avenue here um that that relevant to this audience could also play into um independent contractor and again you'll see kind of the fruits of this more quickly an ongoing litigation Linda I'm sure there's going to be parties you know filing things and saying because of this decision you know you need to kind of level set yourself a little bit and not look to this as much I think the judges know that obviously but I think that I think it'll you know examples like the non-compete role and the independent contractor R you're going to see the impacts of that more immediately than future litigation which could take you know a year or two down the line so yeah I mean one of the things I'll be interested in following but again this is you know this isn't going to be evident until you see a series of cases is whether it will change the approach the FTC takes in litigation because as I said in many cases they come they come in with you know little to no evidence um of harm or deception and the companies being challenged you know always have the burden of producing evidence to counter what the FTC is saying um you know whether they whether they will change that strategy and feel that they need to um put on a stronger case from an evidentiary standpoint um I it's possible but I I don't think we'll know that for a while until we see a series of cases and how the FTC approaches it that seems like the core of the win to me um not being you know an attorney or any of this knowledge but from a Layman's standpoint if they if they have to produce more they can't produce more which we saw in the New York case they didn't really have good evidence um do they sue do they go forward do they settle right there's a lot of uh of uh questions there as well that as you say we come up later in the cases but um thanks for that um Brian do you think we'll see on that note see more companies settling with FTC going forward fighting regulatory decisions in court do you think yeah I mean I think it's and and you know I flag a quote actually from uh David ladic who was head of the um super Protection Bureau and I think during Obama late Obama administration I believe Linda but um you know he he said for quite some time I think you know Chevron has been dead um now it's you know not really cited anymore so again I don't know I think it depends on the facts of depends on the facts of your case I think um and how comfortable you are because I think and and I saw kind of preempt this a little bit Jonathan I saw a question in the Q&A about what this impacted vimma Vima was a settlement um so again it it it would not impact settlements per se you have to go in front of a judge for to impact it and I think when as you know you've seen and you know your colleague Daniel coffin I forget the number but he cited I think this was not official it was a very off the cuff but he would know better than anyone else I think it was 80 90% of cases end in a settlement I don't know if that's just because they think they can't win in court or they don't want to you know go through the expense in court I don't know but I mean you know maybe this place depending on your case and depending on the evidence but I think it's just very case specific independent okay thanks for that um Brian any other thoughts on you compliance management before we get into the questions uh from companies regarding this like what should a company be doing now what's a takeaway uh from a compliance standpoint regulatory standpoint any areas of relief from a day-to-day standpoint I don't think from a dayto day standpoint but I think discuss this with your SE Suite you know I think and and I know Jonathan you've been on top of this as well and I know we have it at the association about making sure that you know members of the SE Suite not in legal or compliance kind of understand the value of it and I think this is just one more example so I think just attempt to get as many eyes on this in your company as possible um just to make sure that you know this is this is one more thing this is why we do it because you know i' I've heard the jokes before I've been in the room you know you're is prevention department you know I get it I get it um but I think this is just one more reason that you know the SE Suite should be behind you and be your Advocate and you know support you on these issues so day-to-day no but I think just attempt to get more support and you know socialize this amongst your C site um as I say this is why we're doing these things excellent any last words on that Linda before questions I'm not I don't see the questions here so I might ask uh Mike to uh ask them from his panelist view uh but ly any last thoughts on the day-to-day or thoughts no I I completely agree with Brian I um I don't think it um in any way lessens the need for a robust compliance program and I would you know I would not suggest that companies um devote less resources to compliance I think they should continue to do what they're doing okay fair enough I think the two questions we have uh I did find it Mike um was the Amma question that Brian answered and then um another VMA question on uh whether it would have affected the initial stages of the of the uh injunction or when the court issued the injunction um I don't know if that because I think if you remember and again this is this is a whole other issue but um that was parte Vima had no idea they were even being investigated um so they didn't even have have the chance to talk to the FPC prior to that um if you talk about the judge's ruling would have impacted it um you know again I have to look at that complaint again to see if to see if they use shevron but I don't I would think they did not but I would have to look at that complaint okay thanks for that um any other questions it's open I'm surprised we have a couple hundred people on this call and two questions about the same company I actually the the Vima case brings up a thought of mine is that uh and I think on our prep call Linda we talked about another case that might affect the ability for companies to go after the FTC for an unjust lack of due process something along those lines um can you if you can recall that can you kind of talk about that a little bit because I thought that was really interesting for the space I I think what we were talking about is um in the context of FTC rulle making that when Lena KH con became chair the FTC sort of quietly changed some of the procedures for rul making um so that they could essentially be more truncated um and and there was less due process and we've seen that for example you know most recently in the in the in the negative option rule after they uh issued the advanced notice of proposed rulemaking they made a conclusion that there were no disputed issues a fact and essentially kind of bypassed the hearing when some of the commenters said you know you you need to have a hearing you need to do that process the hearing was giving six panelists uh six comments rather the opportunity to speak for 10 minutes so um you know I I I think to the extent that the FTC is doing that it may be you know more subject to challenge but I I I don't that's not a Chevron issue I mean I think it's just important to remember that Chevron that Doctrine is very limited Doctrine with that basically says if a statute is ambiguous the court should defer to the agency with oversight to enforce that statute um and their expertise you know and I and I want to say also um that um not just the Skidmore case that I mentioned but just in practice I as as Brian said we we rarely have seen a judge expressly refer to Chevron but they they do view the FTC as having expertise in the area so while they don't you know need to give them difference they're human beings and I think always in court hearing what the FPC is saying is going to have an impact on on a judge regardless of you know whe whether you call it Defence or just another factor that they consider in reaching their overall decision um you know I do think you know maybe in some other for some other agencies like EPA with the Clean Air Act you know it's something like that I think it could have a huge impact but you know in terms of our industry um and and the advertising component of it I just I don't again not to keep keep repeating but I don't see much day-to-day impact of the decision yeah well the difference between the words respect and Defence there seems to be a pretty big gap there if you're a judge trying being told how to handle a case right so who knows how it'll turn out we we'll watch the cases as they as they proliferate um and uh we have one more question from Andrea um do you guys think more companies will be taking the root of AdvoCare or more recently saint proactively I'll answer the first part of that um you know I you know I think those those cases were due to pressure advocare's pressure in its case uh Saints pressure in the marketplace and uh so Saint as some of you know went affiliate uh just last week and um so we're seeing some companies toy with that um you know are they effectively out of the space uh depending on their comp plan maybe I think they were going to a two level um so I don't know that that applies as much but I don't know if you guys have some thoughts on that question and maybe that's more from a law legal standpoint yeah but I think you just my answer will be the same because because again Jonathan it's the advocat in the Saint situation you said well there were different motivations for each again going back it's it's case specific you know I hate to you know I hate to keep saying that Lind right it's just it just depends on your case I think and and again judges I mean again we saw on theora we saw on Burn lnge we we've seen a lot of cases in our industry especially when they talk about compensation plans I mean you know the the blowback of of the side who was not supportive or I'm sorry was supportive of Chevron saying in place was we're gonna have to make judges really get into the weeds and things and and they're not experts um you know I've seen in our cases judges have gone into the weeds I think they need to um and yeah they do respect what the FTC says but I mean judge Andora got into the I mean really got into the weeds like I'll give her a lot of credit like really got into the Weeds on this that's why I think it took so long for her decision to come out she got into the Leeds on it so yeah I hate to I hate to keep you know repeating myself and we talk about what this have impacted things that happened probably not um but you know again I think there are different motivations with different companies that nobody on this line unless you are your counsil and if Linda was any one of those councils should probably couldn't talk about it publicly but you know that's an you know that's a conversation you need to have with your counsil and the cost and the benefits of it for sure well uh thank you guys I think we'll leave it at that I think um I really appreciate your time here I think this is a great topic and this is good news let's let's reiterate you know we're getting into the weeds and we're looking lawyers on the phone you know so um but this is good news for the space um and we need all we can get and I think it's uh just wonderful to see some things moving in the direction to help companies uh conduct business while protecting their field so um appreciate you guys both so much um go and subscribe toal selling news guys if you're not getting the print copy at home just go to the site it's free and uh and thank you Brian and Linda for for joining us and we'll do this again thanks all glad to be here thanks all right bye everyone thank you

Channel: Momentum Factor

Views: 11

Keywords:

Id: mBCBpF_G_tg

Length: 48min 18sec (2898 seconds)

Published: Thu Jul 11 2024