FTC v. EDebitPay

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Contract Law
  • Date Filed: 08-28-2012
  • Case #: 11-55431
  • Judge(s)/Court Below: CIrcuit Judge Silverman for the Court; Circuit Judges Reinhardt and Nguyen
  • Full Text Opinion

A party who stipulated to terms in a contract may not later attack those terms as overly broad or vague.

EDebitPay appeals from an order of contempt and a fine in excess of $3 million to be paid to the FTC. The FTC applied for the order of contempt after EDebitPay violated a final order stipulated to by both parties by continuing to engage in misleading business practices regarding prepaid debit cards. The Court concluded that the district court did not abuse its discretion in finding contempt and ordering EDebitPay to pay the FTC an amount equal to the damages incurred by customers. EDebitPay argued that the district court failed to limit the terms of the final order. The Court found this unpersuasive because the plain language of the final order clearly illustrated the terms of compliance. In addition, EDebitPay had stipulated to the terms of the final order, and therefore, could not argue that the terms were too broad or vague. Finally, EDebitPay argued the district court abused its discretion when ordering them to pay the FTC the damages, instead of just their profits. The Court disagreed because the district court has broad equitable powers and clearly explained that EDebitPay had disregarded the core provisions of the final order. AFFIRMED.

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