Last Friday in a 2-1 order, the Eighth Circuit Court of Appeals rejected an initial challenge to the Federal Trade Commission’s (FTC) Negative Option Rule. The challengers had asked the court to stay the Rule from taking effect pending litigation. The panel of judges included Jane L. Kelly, Ralph R. Erickson, and L. Steven Grasz. Judge Grasz noted he would have granted the challengers request for the stay.
The Negative Option Rule’s prohibition on misrepresentations of material facts relating to the promotion or offering for sale of any good or service with a negative option went into effect on January 14, 2025. The Rule’s remaining consent and cancellation requirements are set to take effect May 14, 2025. The court’s action means these implementation dates are unaffected for now. Briefing on the merits of the challenge will be completed in early April, indicating the panel may attempt to rule by the May 14 deadline.
