The National Federation of Independent Business (NFIB) has achieved a legal victory in the case Custom Communications, Inc. v. Federal Trade Commission (FTC). The United States Court of Appeals for the Eighth Circuit ruled against the FTC's Negative Option Rule, which was seen as targeting small businesses involved in automatic renewals of subscriptions or memberships.
Beth Milito, Vice President and Executive Director of NFIB’s Small Business Legal Center, stated, “The FTC went far beyond their authority in enacting this rule.” She expressed satisfaction with the court's decision to recognize procedural failures in the rulemaking process and prevent further damage to small businesses.
The NFIB argued that the FTC’s final rule attempted to regulate consumer contracts across all sectors, imposed heavy regulatory burdens on small businesses, and violated the Administrative Procedure Act.
The NFIB Small Business Legal Center is dedicated to protecting small business owners' rights through legal actions. Currently, NFIB is engaged in over 40 cases across federal and state courts and at the U.S. Supreme Court level.
