On August 30, 2019, Cause of Action Institute (CoA) filed an amicus brief in the Ninth Circuit in support of Qualcomm in FTC v. Qualcomm, Inc., No. 19-16122. This unprecedented, highly controversial case of international importance represents FTC’s latest ultra vires attempt to expand its powers. It does so here by seeking to transmogrify an alleged breach of contract into an antitrust violation. A former FTC Commissioner, a current FTC Commissioner, the U.S. Department of Justice, numerous other federal agencies, a former Chief Judge of the Federal Circuit, leading antitrust scholars, and others all publicly oppose FTC’s wayward lawsuit against Qualcomm. Learn More
08/7/2019
The D-Link Systems’ Consent Order Explained
On Tuesday, August 6, 2019, the U.S. District Court for the Northern District of California entered a consent order between the Federal Trade Commission (“FTC”) and D-Link Systems, Inc., a U.S. company that is a global leader in connectivity for home, small business, mid- to large-sized enterprise environments, and service providers, resolving an FTC lawsuit alleging that D-Link Systems’ security practices violated Section 5 of the FTC Act. The D-Link Systems order marks the close of the first ever litigated FTC action over the application of Section 5 to the security practices used for Internet of Things (“IoT”) devices. This result is good for D-Link Systems, and good for the FTC.
04/18/2019
CoA Institute Files Amicus Brief in FTC v. AMG Capital Management
On March 14, 2019, Cause of Action Institute (CoA Institute) filed an amicus brief in the Ninth Circuit in support of an en banc petition to rehear a three-judge panel ruling for the Federal Trade Commission (FTC) in FTC v. AMG Capital Management, LLC, et al., No. 16-17197.
This case addresses the important issue of the power of the FTC to take businesses’ property without the due process protections Congress has placed around such confiscation. Here, for example, the FTC used Section 13(b) of the FTC Act to obtain a judgement of over one billion dollars against AMG Capital Management, LLC (AMG) for practices that the FTC (which began its investigation in 2002) never notified AMG were, in the FTC’s view, unlawful until it sued a decade later in 2012. Congress, however, only provided the FTC with power to obtain such relief under Section 19 of the FTC Act, which established a number of procedural safeguards that ensure companies’ ability to defend themselves, including a requirement that the FTC must prove that the defendant knew or should have known its actions were wrongful and a three-year statute of limitations. Section 13, on the other hand, was enacted so that the FTC could quickly get preliminary injunctive relief to stop a company from doing harm to consumers if it could show an ongoing, current violation.
The FTC, in keeping with the tropism of agencies to aggrandize their power beyond Congressional limitations, set out to persuade the judiciary that Section 13(b) allowed the agency, through “ancillary” relief under equity, to get the same confiscations Congress allowed under Section 19. The Ninth Circuit long ago accepted this argument. In this case, however, two Judges ruling for the FTC stated that they had to rule that way as precedent demanded it, but that the larger Ninth Circuit (by an en banc panel) should review the case and change that Circuit’s precedent in light of subsequent Supreme Court rulings, notably, Kokesh v. Securities and Exchange Commission, 137 S. Ct. 1637 (2017).
The amicus brief focuses on the long-term strategy of the FTC to lead the Courts astray on what Congress had allowed and not allowed by enacting specific sections of the FTC Act to do different things. The Washington Legal Foundation and the Chamber of Commerce also urged in amicus briefs that the Ninth Circuit take up this case to right a legal error of the past.
Our full amicus brief can be view here.
John J. Vecchione is President and CEO at Cause of Action Institute.
10/18/2018
Cause of Action Institute Files Lawsuit Against Commerce Department for Failing to Release Tariff Exemption Material & Information
Washington, D.C. (Oct. 18, 2018) – Cause of Action Institute (CoA Institute), a government watchdog organization, today filed a lawsuit against the U.S. Department of Commerce for failing to turn over public documents related to trade tariffs and tariff exemptions. CoA Institute first launched the investigation into the tariff exemption process after it was reported that some of the largest steel and aluminum manufacturers in the country had successfully blocked every tariff exemption filed by smaller U.S manufacturing companies.
John Vecchione, president and CEO of CoA Institute, issued the following statement:
“Tariffs manipulate the free market by creating government-controlled barriers that harm hardworking Americans and putting the economic health of our country at risk. We now have a system where the Executive Branch has the power to pick winners and losers. Our investigation seeks to uncover the process by which tariff exemptions are approved and denied, ensure the tariff-exemption exclusion process is free of political and corporate influence, and seek to uncover any communication between government officials and the companies successfully blocking tariff exemptions.”
Background and timeline:
- In March 2018, President Trump imposed a 10-percent tariff on aluminum and a 25-percent tariff on steel imports
- Trade laws allow exemptions from tariffs in the interest of national security and a recognition that some products are not readily available from U.S manufacturers
- The Commerce Department allows any company (namely, U.S. steel and aluminum companies) to file an objection to a tariff-exemption request
- The New York Times reported that every objection filed by three of the nation’s largest steel producers was successful in blocking the exemption request
- In August 2018, CoA Institute began investigating the exemption process, filing three FOIA requests (see below)
- By law, the government must respond to all FOIA requests within 20 business days
- To date, the Commerce Department has failed to respond to any of the FOIA requests relating to the tariff exemption process
Attachments:
- Complaint – Cause of Action Institute v. U.S. Department of Commerce, No. 18-2397. Tariff Exemptions
- FOIA #1 – Request for work calendars of staff and leadership at the U.S. Department of Commerce that may create or influence tariff and tariff exemption policy
- FOIA #2 – Employee records relating to tariff exemption process, guidance and employees involved in the decision-making process
- FOIA #3 – Any and all communication between staff and leadership at the U.S. Department of Commerce and companies benefiting from tariffs and those filing tariff exemptions
See also:
- The Hill: Tariff-exemption process raises serious cronyism concerns, by John Vecchione. Sept. 23, 2018.
About Cause of Action Institute
Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government.
Media Contact:
Matt Frendewey
matt.frendewey@causeofaction.org
202-699-2018
08/14/2018
Cause of Action Applauds Settlement in Qualified Immunity Case
Washington, D.C. (Aug. 14, 2018) – Cause of Action Institute (CoA Institute) today applauds the settlement in the case of Allah v. Milling. The case revolved around the prison officials denying an inmate named Almighty Supreme Born Allah, due process and holding him in solitary confinement. The District Court ruled in favor of the inmate. That decision was overturned by the Appellate Court, citing the broad definition of “qualified immunity,” even though the Appellate Court recognized that the inmate was denied due process. Qualified immunity is a legal doctrine that shields public officials from civil suits. Cause of Action supports narrowing the scope to ensure citizens who are harmed by corrupt public officials can have relief in court.
John J. Vecchione, president and CEO of Cause of Action Institute issued the following statement:
“We are pleased to see the state of Connecticut recognize that Mr. Allah was harmed and has settled this case. Although we were anxious to see an overbroad application of qualified immunity redressed in the United States Supreme Court, we hope this case serves as a reminder that public officials are accountable to the citizens they serve, and an overbroad definition of qualified immunity undermines the trust we place in those who choose a path of public service by providing far too much protection to individuals who violate their commitment and the public’s trust.”
The case was unique for many reasons, most notably, the diverse coalition that came together in defense of Mr. Allah and to challenge qualified immunity. Cause of Action Institute signed an amicus brief alongside American Civil Liberties Union, American Association for Justice, Alliance Defending Freedom, Americans for Prosperity, The Institute for Justice, Law Enforcement Action Partnership, National Association of Criminal Defense Lawyers, among many others and led by the Cato Institute.
Allah v. Milling Background:
While awaiting trial on a drug charge, Mr. Allah was kept in solitary confinement for seven months because he had once asked a question to a guard during a previous period of incarceration. Both the District Court and Appellate Court agreed that the defendants had denied Mr. Allah due process. However, the Appellate Court ultimately reversed the lower court’s ruling citing qualified immunity.
Qualified immunity has become a broad legal doctrine that protects government employees from civil lawsuits. In the amici, we argued, “qualified immunity denies justice to victims of unconstitutional misconduct.” We had hoped the United States Supreme Court would recognize that the defendants constitutional right to due process had been violated and therefore narrow the legal doctrine of qualified immunity to ensure defendants like Mr. Allah receive the justifiable relief they’re owed.
About Cause of Action Institute
Cause of Action Institute is a 501(c)(3) non-profit working to enhance individual and economic liberty by limiting the power of the administrative state to make decisions that are contrary to freedom and prosperity by advocating for a transparent and accountable government free from abuse.
Media Contact:
Matt Frendewey
matt.frendewey@causeofaction.org
202-499-4231
08/9/2018
CoA Institute President and CEO John Vecchione Discusses CoA’s Two Lawsuits Against the DOJ
Cause of Action Institute (“CoA Institute”) President and CEO John Vecchione appeared on the Daily Ledger to discuss CoA’s two lawsuits against the DOJ for failing to comply with numerous FOIA requests.
The interview comes after CoA Institute filed two complaints against the DOJ in six days for failing to respond to Freedom of Information Act (“FOIA”) requests. CoA’s first suit was a result of DOJ’s failure to respond to three requests in regards to the use of a personal email by former FBI Director James Comey, former FBI Chief of Staff James Rybicki, and DOJ’s Director of Public Affairs Sarah Isgur Flores.
CoA’s second law suit, filed on behalf of the Daily Caller News Foundation, comes after the FBI failed to respond to a FOIA requesting communication records and work product relating to Daniel Richman, a “Special Government Employee” (SGE) hired by former FBI Director James Comey. Richman gained notoriety when James Comey admitted to using Richman to leak memos to the media.
08/2/2018
New Website Documents Fraud & Corruption from EB-5 Immigration Program
WASHINGTON, D.C. – Aug. 2, 2018 – Today, Cause of Action Institute (“CoA Institute”) launched a new website www.EndEB5.org, documenting questionable investments and investigations relating to the EB-5 Immigrant Investor Program (“EB-5”) and the Regional Center Program. As the Cause of Action’s website reveals, the EB-5 program is ripe for fraud, corruption, can pose a national security threat, and provide questionable value to taxpayers and the U.S. economy. The website launched with more than a dozen examples of questionable investment. The organization has identified more than 50 examples and will release more troubling investments over the next two weeks.
CoA Institute created the website in response to Sen. Diane Feinstein asking the director of the program for a list of “shady programs.” The director didn’t have a list of “shady programs,” so CoA Institute put one together. As Congress weighs whether to extend or allow the Regional Center Program component of the EB-5 program to expire, CoA Institute urges Congress to review this website and recognize the severe flaws in the EB-5 program and let it expire on Sept. 30.
John J. Vecchione, president and CEO of CoA Institute, issued the following statement:
“The EB-5 Program faces legitimate scrutiny due to allegations that it’s become ripe for fraud and corruption and become a pay-to-play scheme. As our research illustrates, EB-5 and the Regional Center Program amounts to a pay-to-play scheme that enriches questionable actors who defraud investors and visa seekers and poses a threat to national security. We urge Congress to review the cases we have identified and allow this program to expire.”
BACKGROUND & HOW IT WORKS:
- The Immigration Act of 1990 created EB-5 and permits foreign nationals to apply for a conditional visa by making a $1,000,000 investment in an American business that creates at least 10 jobs.
- Alternatively, a visa-seeker can invest $500,000 in a “targeted employment area” (rural or area of high unemployment) to satisfy the visa requirement.
- In 1992, the “Regional Center Program” was created to allow pre-approved third parties to pool EB-5 investments from foreign nationals toward American development projects.
- The Regional Center Program is a source of much of the fraud in EB-5 Immigrant Investor program.
- CoA Institute has found numerous cases where individuals who controlled a pre-approved Regional Center Program, use the program to collect huge sums in “investments” and fees from individuals seeking a visa, only to use the funds not to create jobs in the U.S. but to fund their lavish lifestyle.
On June 19, 2018, the U.S. Senate Committee on the Judiciary held a hearing on EB-5 with Lee Francis Cissna, Director of the U.S. Citizenship and Immigration Services (“USCIS”), the agency responsible for the program. In this hearing, when Senator Feinstein asked Director Cissna for a list of “shady investments” the agency has found while investigating fraud in this program, Cissna stated he was unable to produce one.
In response, CoA has begun tracking and identifying examples of fraud or other questionable investments made through the EB-5 program. The website includes 13 examples and CoA Institute expects to release as many as 50 examples of questionable investments under the EB-5 project files page, detailing projects that have been proven to be fraudulent and failed to provide the proposed economic benefit.
The countless documented instances of fraud and corruption developed through this program have pushed the EB-5 program far beyond the point of corrective legislative reform. CoA Institute will continue to publish findings on this website as Congress decides whether to allow the program to expire on September 30.
About Cause of Action Institute
Cause of Action Institute is a 501(c)(3) nonprofit, dedicated to providing government oversight, transparency and advocating for economic freedom and individual opportunity advanced by honest, accountable, and limited government.
Media Contact:
Matt Frendewey
matt.frendewey@causeofaction.org
202-499-4231