Federal Trade Commission v. MTK Marketing, Inc.

To resolve the instant appeal, we must determine whether the Federal Trade Commission (“FTC”) is a “person” entitled to enforce liability on a surety bond. We conclude that it is.

FACTUAL AND PROCEDURAL BACKGROUND

This case calls upon us to interpret Article 1.4 of California’s Telephone Sellers Act (“Act”), which regulates the practices of telephone solicitors. Cal. Bus. & Prof.Code §§ 17511-17511.12. The Act provides:

§ 17511(b).

The Act requires all telephonic sellers to maintain a surety bond in the amount of $100,000 “for the benefit of any person suffering pecuniary loss in a transaction commenced during the period of bond coverage with a telephonic seller who violated” the Act. § 17511.12(a). The bond is to “include coverage for the payment of the portion of any judgment, including a judgment entered pursuant to Section 17203 or 17535, that provides for restitution to any person suffering pecuniary loss, notwithstanding whether the surety is joined or served in the action or proceeding.” Id.

As telephonic sellers engaged in telemarketing in California MTK Marketing, Inc. (“MTK”) and Copy Resource Center, Inc. (“CRC”) were required to post a bond pursuant to section…