Monday, December 03, 2018

FTC v. AMG Capital Mgmt (9th Cir. - Dec. 3, 2018)

Here's a useful statement by Judge Bea that'll be somewhat helpful to defendants in lots of different types of cases.  But I say "somewhat" because the statement (1) is only in a concurring opinion, and (2) is, to me at least, totally silly.

Judge Bea categorically states that "the question whether something is 'likely to deceive' is inherently factual and should not be decided at the summary judgment stage."  Judge Bea would so hold because he thinks that when three judges on the panel can understand what the fine print of a contract means, then that means that maybe the average consumer can understand it as well.  Hence precluding the grant of summary judgment on the point.

One can respond to that point in a number of different ways.  But it's sufficient to me to simply state that just because a panel of three learned federal judges -- alongside their law clerks -- can (after full briefing by the parties) understand a particular provision in fact says virtually nothing at all about what a reasonable consumer under far different circumstances would understand.  Most consumers haven't gone to law school and studied how to interpret contracts.  Most consumers haven't been confirmed by the Senate.  Most consumers don't have the experience reading or deciphering fine print -- or the time to do so -- that federal judges hearing a particular lawsuit possess.

That the top one percent of the top one percent of consumers can perhaps understand a contract does not preclude summary judgment about whether that contract's "likely to deceive" a regular consumer. Just like a hypertechnical medical statement or a complicated physics equation might well be likely to deceive me even though Einstein or a medical expert would totally understand that it meant the exact opposite of what I -- and others like me -- thought it meant.

To take a concrete example from a different context, imagine that a contract said that "You can prepay this loan, if you want, on any Friday!" and then, buried in the fine print, ten pages later, in a place virtually no one ever looks and that you can get to only after clicking on seven different hyperlinks, there's a clause that says that "Payments during non prime number years must be made in a habitable microgravity space."  Now, I'm a lawyer, and I read that provision, and understand that it means that since the last prime number year was 2017, the only time you can pay on Earth is in 2027, and that in every other year, you've got to make your way to the International Space Station if you want to pay early. So it's literally true.  But it's also likely to deceive.  And summary judgment would be entirely proper.

There are other problems with Judge Bea's statement, at least for me, but I'll leave it at that for now.  Nonetheless, if you're looking for a nice quote and trying to survive summary judgment, go ahead and give it a shot.  You'll at least know you've got one kindred spirit on the Ninth Circuit on your side.