On February 20, 2024, Director Samuel Levine of the Federal Trade Commission’s Bureau of Consumer Protection (Bureau) issued a statement promoting the use and acceptance of tolling agreements. Tolling agreements pause the running of statutes of limitations, permitting enforcement agencies such as the Federal Trade Commission (FTC) to file an enforcement action against a party after the deadline otherwise established by the applicable statute.

Director Levine explains that tolling agreements now are needed more frequently. In the past, the FTC was able to seek monetary penalties under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), which does not have a statute of limitation; however, this approach was barred under the Supreme Court’s ruling in AMG Capital Mgmt., LLC v. FTC, 141 S. Ct. 1341 (2021). Now, the FTC often pursues monetary penalties under 15 U.S.C. § 57b, which has a three-year statute of limitations.

Director Levine posits that tolling agreements improve the FTC’s ability to redress consumer injuries, and provide benefits to parties under investigation. He “strongly encourages” parties to sign tolling agreements when FTC staff requests them:

When parties sign a tolling agreement, they get the time needed to collect and produce information relevant to the investigation, draft written submissions, and engage in dialogue with the Commission. And Commission staff can provide this additional time without impairing the Commission’s potential claims or relief. This increases the likelihood of achieving a pre-litigation settlement or closing the investigation in appropriate cases.

On the other hand, Director Levine cautions about the negative consequences of refusing a tolling agreement:

In situations where parties decline, Bureau management and staff will take this into account when presented with extension requests, including to respond to civil investigative demands, and meeting requests. Furthermore, in cases where the Bureau is recommending that the Commission authorize the filing of a complaint, Commissioners may decline to take meetings with parties if such meetings would impair the agency’s ability to protect the public. In such cases, the Bureau will instead recommend that the Commission authorize the filing of a complaint in order to protect the interests of harmed consumers.

Particularly in light of these not-so-veiled warnings, parties subject to FTC investigation should carefully consider, and obtain the advice of counsel as to, the pros and cons of accepting or rejecting a request to sign a tolling agreement.

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