FTC Moves to Dismiss MGM’s Suit for Failure to State a Claim for Relief

District of Columbia in support of its motion to dismiss. The FTC’s April 1 order denying MGM's petition to quash a civil investigative demand (CID) “unlawfully deprives MGM of its rights under the Fifth Amendment,” alleges MGM’s April 15 complaint (see 2404160035).The CID requested information as part of a nonpublic investigation involving MGM's September data breach. The suit also seeks to disqualify FTC Chair Lina Khan's participation in the investigation. But the court lacks subject-matter jurisdiction over MGM’s claims because Congress set forth in the FTC Act “a comprehensive and exclusive scheme for judicial review of agency actions,” said the commission’s memorandum. Under that scheme, MGM may raise its claims in a court of appeals only following a final commission cease and desist order, or in the commission’s enforcement petition currently before the U.S. District Court for the District of Nevada, it said. MGM also fails “to invoke a cognizable cause of action or state a plausible claim for relief,” said the memorandum. The Declaratory Judgment Act doesn’t supply an independent cause of action, and the Administrative Procedure Act provides a cause to challenge only final agency actions, it said. “MGM challenges no such actions,” it said. “Nor does the Constitution provide a cause of action here,” it said. “Where Congress has provided adequate statutory means for a person’s claims and remedies concerning agency action, a duplicate constitutional cause of action that evades statutory limits and requirements may not be judicially implied,” it said. MGM’s complaint also fails to allege a plausible claim for relief, said the memorandum. Its claim that the FTC Chair Khan should be disqualified from this matter “ignores applicable legal standards and is grounded in an impermissibly tenuous allegation of potential bias,” it said. Khan happened to stay at an MGM hotel shortly after MGM’s most recent data breach “and needed to provide her credit card information on paper,” it said. But that “threadbare” allegation doesn’t support “a plausible claim for bias that would warrant disqualification,” it said. MGM similarly fails to state a claim with its attacks on the deadline and scope of the CID, said the memorandum. The claim of an unfairly short deadline ignores the CID’s original 30-day return date and the additional 47 days MGM gained while its petition to quash was pending before the commission, it said. It also fails to allege the FTC’s refusal to grant an extension, it said. In fact, when commission staff contacted MGM to discuss compliance issues such as timing, “MGM refused to engage in any such discussions,” it said. Likewise, MGM’s claim that the FTC has grounded the CID in “facially inapplicable” regulations “overlooks settled and binding authorities” holding that the commission “is entitled to investigate whether its regulations apply to particular entities or practices,” it said.