Federal Trade Commission v. Intuit Inc.

Filing 66

ORDER by Judge Charles R. Breyer denying #28 Emergency Motion for Temporary Restraining Order and Preliminary Injunction; denying as moot #50 Administrative Motion to Rule on the Briefs. (crblc2, COURT STAFF) (Filed on 4/22/2022)

Case 3:22-cv-01973-CRB Document 66 Filed 04/22/22 Page 1 of 2

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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FEDERAL TRADE COMMISSION,

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Plaintiff,

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United States District Court
Northern District of California

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Case No. 22-cv-01973-CRB
ORDER DENYING MOTION FOR
EMERGENCY RELIEF

v.
INTUIT INC.,
Defendant.

Plaintiff Federal Trade Commission (FTC) moves for a Temporary Restraining

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Order and a Preliminary Injunction under Section 13(b) of the FTC Act, arguing that

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Defendant Intuit Inc. is deceptively advertising TurboTax Free Edition in violation of

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Section 5(a). See Emergency Mot. (dkt. 28); Compl. (dkt. 1). The FTC alleges that Intuit

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advertises that TurboTax Free Edition is “free free free free” and includes only a small and

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vague disclaimer that it is “for simple returns only” or to “see details at TurboTax.com.”

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Taxpayers whose returns do not meet Intuit’s definition of “simple” eventually run into a

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message on the TurboTax website informing them that they must pay to file.

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Under Section 13(b) of the FTC Act, a district court may grant a preliminary

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injunction “[u]pon a proper showing that, weighing the equities and considering the

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Commission’s likelihood of ultimate success, such action would be in the public interest.”

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15 U.S.C. § 53(b); see FTC v. Affordable Media, 179 F.3d 1228, 1233 (9th Cir. 1999). A

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defendant engages in deceptive acts or practices under Section 5(a) of the FTC Act if it (1)

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made a representation, omission, or practice, (2) which was likely to mislead consumers

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acting reasonably under the circumstances, and (3) which was material. FTC v.

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Stefanchik, 559 F.3d 924, 928 (9th Cir. 2009); 15 U.S.C. § 45(a).

Case 3:22-cv-01973-CRB Document 66 Filed 04/22/22 Page 2 of 2

The Court denies the FTC’s motion for emergency relief for three reasons. First,

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Tax Day, which was April 18, 2022, has passed. Most taxpayers have already filed their

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taxes. Intuit represented in its briefing and at oral argument that its advertising is largely

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done for this tax season. See Opp. (dkt. 45) at vi. Any prospective harm is therefore

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attenuated. Second, even before Tax Day, Intuit had removed several of the most

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plausibly deceptive advertisements—that is, three videos that repeated the word “free” a

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dozen or more times over 30 seconds before a very brief disclaimer. See Shiller decl. (dkt.

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7-13, GX 301) ¶¶ 16-31 (describing these ads); Ryan decl. (dkt. 45-3) ¶¶ 16-26 (noting

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their removal). Third, to the extent other advertisements might violate the FTC Act, the

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Court notes that the FTC has brought an administrative proceeding against Intuit, with a

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United States District Court
Northern District of California

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hearing set for September 14, 2022. See 15 U.S.C. § 45(b); AMG Cap. Mgmt., LLC v.

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Fed. Trade Comm’n, 141 S. Ct. 1341, 1346 (2021) (detailing the administrative process).

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An Administrative Law Judge (ALJ) with expertise in these matters will hear (and likely

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rule) before Intuit resumes its advertising campaign in the lead-up to Tax Day 2023.

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For the foregoing reasons, the Court DENIES the FTC’s Emergency Motion for a

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Temporary Restraining Order and a Preliminary Injunction.1 However, if Intuit resumes

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its full advertising campaign before the ALJ releases her § 45(b) report, or the facts on the

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ground change significantly, the FTC may return to this Court to request relief.

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IT IS SO ORDERED.

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Dated: April 22, 2022
CHARLES R. BREYER
United States District Judge

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The administrative motion for emergency relief on the briefs (dkt. 50) is DENIED AS
MOOT.
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