Federal Trade Commission v. Intuit Inc.
- Charles Breyer
- 3:22-cv-01973
- U.S. District Court · Northern District of California
- 2
In Federal Trade Commission v. Intuit Inc., Judge Breyer denied the FTC’s emergency request to restrict Intuit’s TurboTax advertising.
The ruling affected the FTC’s request for immediate court-ordered restrictions on Intuit’s TurboTax advertising. It left Intuit without the requested temporary restrictions and did not finally resolve the FTC’s allegations.
What happened
In Federal Trade Commission v. Intuit Inc., the Federal Trade Commission alleged that Intuit deceptively advertised TurboTax Free Edition as free while requiring some taxpayers to pay. The FTC asked the court to temporarily restrict those advertisements.
The court denied the request because Tax Day had passed, Intuit had removed several of the advertisements the court considered most plausibly deceptive, and the FTC had already started an administrative proceeding that was scheduled to address the allegations.
Judge Breyer denied the FTC’s motion for both a temporary restraining order and a preliminary injunction. He said the FTC could return to court if Intuit resumed its full advertising campaign before the administrative proceeding’s report or if circumstances changed significantly.
The detailed version
- Federal Trade Commission v. Intuit Inc. · No. 3:22-cv-01973
- Charles Breyer
- Apr. 22, 2022
Background
The Federal Trade Commission (FTC) alleged that Intuit Inc. violated Section 5(a) of the Federal Trade Commission Act by deceptively advertising TurboTax Free Edition. According to the FTC, Intuit advertised the product as “free free free free,” while using only a small or vague disclaimer stating that it was “for simple returns only” or directing consumers to see details at TurboTax.com. Taxpayers whose returns did not meet Intuit’s definition of “simple” eventually received a message stating that they had to pay to file.
The FTC asked the court for a temporary restraining order and a preliminary injunction under Section 13(b) of the FTC Act. A preliminary injunction is a court order issued before a final decision that temporarily requires or prohibits specified conduct. The court explained that this relief depends on a proper showing that considers the public interest and the FTC’s likelihood of ultimately succeeding.
Reasons for the ruling
The court denied the FTC’s motion for emergency relief for three reasons:
1. Tax Day—April 18, 2022—had passed, most taxpayers had already filed their taxes, and Intuit represented that it had largely completed its advertising for that tax season. The court therefore found that any future harm was less immediate.
2. Before Tax Day, Intuit had removed several advertisements that the court described as the most plausibly deceptive. These included three videos that repeated the word “free” many times before showing a brief disclaimer.
3. The FTC had already brought an administrative proceeding against Intuit, with a hearing scheduled for September 14, 2022. The court stated that an administrative law judge with expertise in the subject would hear the matter and would likely issue a ruling before Intuit resumed its advertising campaign for the 2023 tax season.
Disposition
The court DENIED the FTC’s Emergency Motion for a Temporary Restraining Order and a Preliminary Injunction. The opinion did not make a final determination about whether Intuit’s advertising violated the FTC Act. The court stated that the FTC could return to court if Intuit resumed its full advertising campaign before the administrative law judge issued the required report, or if the facts changed significantly. Judge Charles R. Breyer signed the order on April 22, 2022.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.