The U.S. Court of Appeals for the Tenth Circuit upheld the refusal of a motion to invalidate a $13.5 million agreed judgement, despite a fundamental shift in legal understanding resulting from the U.S. Supreme Court ruling in AMG Capital Management v. Federal Trade Commission, 593 U.S. 67 (2021). The litigation pivots around Section 13(b) of the Federal Trade Commission Act, which the high court determined disallows equitable financial compensation.
The controversy originated with the Federal Trade Commission’s (FTC) lawsuit against James Martinos and Elite IT Partners, collectively known as Elite, on accusations of a fraudulent scheme to sell unnecessary services. The parties reached an agreement under which Elite would remit to the FTC $13.5 million as a means of equitable monetary relief under Section 13(b) of the act, with Elite further waiving any rights to contest the decision.
However, following the Supreme Court’s interpretation in the AMG ruling that disallowed this form of relief, Elite sought to vacate the judgment arguing that the AMG decision had fundamentally altered the legal landscape. These pursuits were rebuffed as the Tenth Circuit opted to affirm the rejection of the Rule 60(b)(6) motion to vacate the judgement.
The confirmation of refusal to vacate the stipulated judgment in spite of a shift in law underscores the complexity and dynamism of litigation surrounding financial regulation and consumer protection in the United States.