FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 07/05/2023 OSCAR NO 608138 | PAGE Page 1 of 10 * -PUBLIC

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 07/05/2023 OSCAR NO 608138 | PAGE Page 1 of 10 * -PUBLIC

PUBLIC

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS:

Lina M. Khan, Commissioner

Rebecca Kelly Slaughter

Alvaro M. Bedoya

IN THE MATTER OF

FLEETCOR TECHNOLOGIES, INC., a

corporation, and

Docket No. D-9403

RONALD CLARKE, individually and as an

officer of FleetCor Technologies, Inc.

RESPONSE IN OPPOSITION TO MOTION TO LIFT

STAY OF ADMINISTRATIVE PROCEEDINGS

On December 20, 2019, the FTC sued FleetCor Technologies, Inc. and its

CEO, Ronald Clarke, under Section 13(b) of the FTC Act. See Compl., ECF No. 1,

FTC v. FleetCor Techs., Inc., No. 1:19-cv-05727-AT (N.D. Ga. Dec. 20, 2019). While

the FTC’s motion for summary judgment in the district court was pending,

Complaint Counsel filed an identical Part 3 complaint. Part 3 Compl. (Aug. 11,

2021). Complaint Counsel and Respondents agreed to stay this administrative

proceeding until “after the federal court . . . adjudicated the merits” of the federal

court proceeding. See Notice at 2 (Feb. 11, 2022). The district court then granted

summary judgment for the Commission and entered a permanent injunction. Order

for Permanent Injunction, ECF No. 355 (June 8, 2023). Defendants intend to

appeal those decisions, both as to liability and remedy.

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Based solely on the preclusive effect of the district court order subject to

appeal, Complaint Counsel has now moved to lift the stay of the administrative

proceedings so that it can “proceed immediately to dispositive motion practice” and

obtain a liability finding and a cease and desist order. See Motion to Lift Stay

(“Mot.”), at 5. In other words, Complaint Counsel seeks to obtain a judgment on

liability and a cease-and-desist order (effectively an injunction) from the

Commission based solely on the district court decision, “without discovery or other

pretrial [or trial] proceedings.” Id.

The Commission should deny this motion and maintain the stay during the

pendency of the appeal of the federal court action. Allowing Complaint Counsel to

obtain an order of liability and a cease and desist order based solely on a district

court decision that is subject to appeal would be severely prejudicial to the

Respondents. Indeed, it would eviscerate their right to an appeal. Under

Complaint Counsel’s proposed procedure, even if Respondents prevail on their

appeal and obtain a reversal of the district court’s decision, the Commission would

still have an administrative finding of liability and a cease and desist order that

was based solely on that now-reversed district court decision. Perversely,

Respondents would be under the same injunctive provisions even though the entire

basis for the finding of liability and the appropriateness of an injunction was

reversed. It is black letter law that it is prejudicial and a miscarriage of justice to

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“perpetuat[e] a judgment that rests on nothing more than a subsequently reversed

judgment.” Wright & Miller, 18A Fed. Prac. & Proc. Juris. § 4433 (3d ed.). 1

On the other hand, there are no efficiencies to be gained by lifting the stay.

Defendants are now subject to the District Court’s injunction and will remain so

unless and until it is reversed on appeal. The Commission should maintain the stay

until Respondents complete their appeal of the district court’s judgment. At that

point the administrative action can proceed swiftly and efficiently.

LEGAL STANDARD

In deciding whether to stay an administrative proceeding, the Commission

applies the same standard applied by federal district courts. See, e.g., In re

Dynamic Health of Fla., LLC, 2004 WL 1814180, at *2 (FTC Aug. 2, 2004) (quoting

SEC v. Dresser Indus., Inc., 628 F.2d 1368, 1375 (D.C. Cir. 1980)). The Commission

thus considers whether (1) the stay will prejudice nonmoving party; (2) the stay

will simplify issues and streamline trial; and (3) the stay will reduce the burden of

litigation on parties and court. Sultan v. Dixon, 2022 WL 657396, at *1 (M.D. Fla.

Mar. 4, 2022). Based upon these factors, a stay is appropriate “to await a federal

appellate decision that is likely to have a substantial or controlling effect on the

claims and issues in the stayed case.” Miccosukee Tribe of Indians of Fla. V. S. Fla.

Water Mgmt. Dist., 559 F.3d 1191, 1198 (11th Cir. 2009).

1 The FTC’s original motion, which was returned as incorrectly addressed to the ALJ,

cited to this key section of Wright & Miller. In its submission to the Commission, however,

the FTC removed that citation noting that it made a “minor revision[] to the content of the

motion.” D. Hanks Email, June 23, 2023.

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ARGUMENT

Courts and leading commentators have unanimously recognized that a stay is

warranted, if not essential, “when, as here, a prior case which may have preclusive

effect over the instant proceedings is pending on appeal.” Univ. of Colo. Health at

Mem’l Hosp. v. Burwell, 233 F. Supp. 3d 69, 87 (D.D.C. 2017). That is because

proceeding in a second case based on the claimed preclusive effect of a decision on

appeal creates “[s]ubstantial difficulties” given that “a second judgment based upon

the preclusive effects of [a] first judgment should not stand if the first judgment is

reversed.” Wright & Miller, 18A Fed. Prac. & Proc. Juris. § 4433 (3d ed.). Therefore,

the standard in a case like this is to “stay[] trial and perhaps pretrial proceedings

pending resolution of the appeal in the first action.” Id. In addition, all three factors

favor a stay.

I.

Lifting the Stay While the District Court’s Judgment Is Pending on

Appeal Would Prejudice The Respondents.

Complaint Counsel contends that the stay should be lifted because (1) the

federal court action involved the “same issues” as this Part 3 proceeding and (2) “a

possible or pending appeal does not diminish the preclusive effect of a district

court’s determinations.” Mot. 6–8. But this ignores the central question: whether

lifting the stay and entering judgment based solely on the preclusive effect of the

district court decision, that may be vacated or reversed on appeal, would be

prejudicial to Respondents.

There can be no serious dispute that Respondents may be heavily prejudiced

by lifting the stay. Lifting the stay could eviscerate their rights to an appeal and

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leave them bound by a district court decision that has actually been reversed on

appeal.

It is well established that the serious prejudice and injustice of granting relief

“on the basis of a judgment that is subsequently over-turned,” Martin v. Malhoyt,

830 F.3d 237, 264 (D.C. Cir. 1987), makes it “advisable for [a] court that is being

asked to apply [a] judgment as res judicata to stay its own proceedings to await the

ultimate disposition of the judgment . . . on appeal.” DeBoom v. Raining Rose, Inc.,

456 F. Supp. 2d 1077, 1080 (N.D. Iowa 2006) (quoting Restatement (Second) of

Judgments § 16 cmt. b); N. Nat. Gas Co. v. L.D. Drilling, Inc., 2010 WL 3892227, at

*19 (D. Kan. Sept. 29, 2010) (same); Univ. of Colo. Health, 233 F. Supp. 3d at 88

(“The Court thus stays this action pending the resolution of the pending appeal in

[related case 1] at the D.C. Circuit, and the D.C. Circuit’s opinion in [related case 2]

if an appeal is taken.”).

A stay during the appeal is particularly important for cases, like this one,

where the issues in a prior case subject to appeal are “directly related” or “similar.”

Miccosukee Tribe of Indians v. S. Fla. Water Mgmt. Dist., 559 F.3d 1191, 1198 (11th

Cir. 2009); Bailey v. Six Flags Ent. Corp., 2019 WL 8277272, at *7 (N.D. Ga. Dec.

15, 2019) (issuing stay “despite some differences between the fact pattern presented

here and that of [related appeal]”); Sultan, 2022 WL 657396, at *1 (issuing stay

where the “same and potentially dispositive issue [was] currently before the

Eleventh Circuit”). In fact, so long as the matters share sufficient similarities,

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“[t]he parties need not be the same or the issues identical” for a stay to be

warranted. Jackson v. Dozier, 2018 WL 4376467, at *3 (M.D. Ga. Aug. 14, 2018).

This is not a close call; Complaint Counsel repeatedly stresses in its motion,

the facts and issues in this proceeding are “identical in substance” to what was

resolved in federal court, and Complaint Counsel intends to seek a summary

decision solely “based on the determination made in the district court action.” E.g.,

Mot. 2. Complaint Counsel is not attempting to try any issue in this administrative

proceeding at all. It is trying to rely solely on the federal court action—and that

action should be final before it does so. If the Court of Appeals reverses the federal

district court’s grant of summary judgment, that will end this administrative case

and there should be no cease and desist order. There is no reason to “run the risk of

[entering a final order] on the basis of a judgment that may be subsequently

overturned.” Stevens v. Stover, 702 F. Supp. 302, 307 (D.D.C. 1988). Rather, “the

best interests of justice, and of judicial economy, will be served by staying these

proceedings to await the ultimate disposition of the judgment on appeal.” Local

Contractors, Inc. v. Remtec, Inc., 1992 WL 6302, at *2 (E.D. La. Jan. 3, 1992). The

potential prejudice to the Respondents makes this not only a good case for a

continued stay but “an excellent one.” Miccosukee Tribe of Indians, 559 F.3d at 1198

(affirming stay pending “a federal appellate decision that is likely to have a

substantial or controlling effect on the claims and issues in the stayed case”).

Complaint Counsel would suffer no prejudice by maintaining the stay.

Defendants are currently bound by the injunction, so there is no benefit (or any

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need) for a cease and desist order to prevent ongoing harm. The injunction does

that already. And there is no basis to obtain any monetary relief when the appeal is

still pending.

II.

Maintaining The Stay Would Simplify The Issues And Streamline The

Trial

Nor can there be any doubt that maintaining the stay will simplify the issues

and streamline any follow-on proceedings. Once the appeal is complete,

Respondents’ liability and the scope of the injunction will be conclusively resolved.

At that stage any follow-on proceedings can proceed quickly and efficiently.

The alternative approach will lead to unnecessary jurisdictional and

procedural chaos. Complaint Counsel has stated that it plans to quickly “return to

the district court for monetary relief” once it obtains a cease and desist order.

Mot. 2–3. That monetary relief is consumer redress that would be distributed to

FleetCor customers, which would be impossible to recoup once paid. Three courts

will be burdened by how to handle the procedural mess created by pursuit of the

administrative proceeding on the basis of a judgment that is still on appeal: (1) the

Court of Appeals that will hear the appeal from the cease and desist order, (2) the

Eleventh Circuit that will hear the direct appeal from the district court action, and

(3) the district court that will hear the follow-on 19(b) action.

The far more efficient approach is for the Commission to abide by the wellsettled principle that “care should be taken in dealing with judgments that are final

but still subject to direct review,” Martin, 830 F.2d at 264. After all, a federal

agency’s obligation “to consider a matter expeditiously is not a mandate to be

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arbitrary, capricious, irrational or sloppy,” Puerto Rico Maritime v. Fed. Maritime

Comm’n, 678 F.2d 327, 336 (D.C. Cir. 1982). Where, as here, “deferral [would]

avoid[] the complicated unravelling that might become necessary if a judgment . . .

outside the rendering forum[] is over turned on direct review,” the solution is clear.

In re Pro. Air Traffic Controllers Org., 699 F.2d 539, 544–45 (D.C. Cir. 1983). The

Commission should continue the stay until after the Eleventh Circuit issues its

mandate on FleetCor’s appeal from the district court judgment.

III.

Maintaining The Stay Will Reduce The Burden On The Parties And

The Court

Continuing the stay also will reduce the burden on the parties and the courts

by avoiding potentially unnecessary litigation. If Respondents prevail on their

appeal of the district court’s decision, no administrative proceeding will be

necessary. Any proceedings already conducted would have been entirely wasteful.

The Commission can conserve its resources, as well as the resources of the courts,

by waiting until the appeal is complete.

If the Commission prevails on the appeal, then the administrative proceeding

can proceed quickly and efficiently with key issues already decided.

CONCLUSION

The Commission should maintain the stay for the same reason it granted it

in the first place. Maintaining the stay will avoid prejudice to Respondents and the

possible inappropriate result of having a cease and desist order based solely on a

vacated district court decision. No cease and desist order is required to protect

consumers, as the district court’s injunction is already in place. In order to

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maintain an orderly and efficient process, the stay should remain until the appeal is

complete.

Dated: July 3, 2023

Respectfully submitted,

John Villafranco

Levi Downing

KELLEY DRYE & WARREN LLP

3050 K Street, N.W.

Washington, D.C. 20007

Tel: (202) 342-8400

Fax: (202) 342-8451

Counsel for Ronald Clarke

/s/ Mark D. Hopson

Mark D. Hopson

Benjamin M. Mundel

Daniel J. Hay

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, DC 20005

Tel: (202) 736-8048

Fax: (202) 736-8711

Counsel for FleetCor Technologies, Inc.

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CERTIFICATE OF SERVICE

I hereby certify that on July 5, 2023, I filed the foregoing document

electronically using the FTC’s E-filing system, which will send notification of such

filing to:

April Tabor

Secretary

Federal Trade Commission

600 Pennsylvania Ave., NW, Rm H-113

Washington, DC 20580

The Honorable D. Michael Chappell

Administrative Law Judge

Federal Trade Commission

600 Pennsylvania Ave., NW, Rm H-110

Washington, DC 20580

I further certify that on July 5, 2023, I caused the foregoing document to be

served via electronic mail to:

Daniel O. Hanks

James I. Doty

Bureau of Consumer Protection

600 Pennsylvania Avenue NW

Mailstop CC-10232

Washington, DC 20580

dhanks@ftc.gov

jdoty@ftc.gov

Office of the Administrative Law Judge

Federal Trade Commission

600 Pennsylvania Ave., NW, Rm H-110

Washington, DC 20580

OALJ@ftc.gov

Office of the Secretary

Federal Trade Commission

600 Pennsylvania Ave., NW, Rm H-113

Washington, DC 20580

ElectronicFilings@ftc.gov

A substantively identical copy of the foregoing document was served via

email and hard copy on the above recipients on July 3, 2023.

/s/ Daniel J. Hay

Daniel J. Hay

Counsel for FleetCor Technologies, Inc.

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