The Federal Trade Commission ("FTC") appeals, and Western Union cross-appeals, from the judgment of the United States District Court for the Southern District of New York (Hellerstein,
The FTC is authorized by Congress to regulate "unfair or deceptive acts or practices in or affecting commerce." 15 U.S.C. § 45(a)(1). Its mission is protecting and assisting U.S. consumers. In carrying out its mission, the FTC has authority to regulate "acts or practices involving foreign commerce that — (i) cause or are likely to cause conduct reasonably foreseeable injury within the United States; or (ii) involve material conduct occurring within the United States." 15 U.S.C. § 45(a)(4)(A).
The FTC has authority to issue a CID in connection with "any inquiry conducted by a Commission investigator for the purpose of ascertaining whether any person has been engaged in any unfair or deceptive acts or practices in or affecting commerce."
In compliance with the FTC's investigation into fraud-induced money transfers, Western Union has produced to the agency more than two dozen categories of documents. Western Union objected, however, to the production of two document categories, which became the subject of the CID and this appeal and cross-appeal: complaints of consumer fraud made outside the U.S.; and documents related to the work of a monitor appointed in connection with a settlement of an Arizona state investigation of cross-border third-party money laundering. Specifically, the CID called for: (1) "all documents referring or relating to complaints by consumers worldwide relating to fraud-induced money transfers" and (2) "all documents referring or relating to communications with the Monitor, including, but not limited to, all information Western Union provided to the Monitor and, any reports, reviews or other documents prepared by the Monitor."
The FTC sought enforcement of the CID in the district court, which denied enforcement as to the foreign documents and granted enforcement as to the Monitor-related documents.
As to the foreign documents, a request for "documents referring or relating to complaints by consumers worldwide relating to fraud-induced money transfers" falls within the FTC's statutory authority because foreign complaints of fraud-induced money transfers are subject to Western Union's anti-fraud program, which is administered in the United States.
As to the Monitor-related documents, the district court acknowledged that fraud and money laundering "may be different." In particular, the transferor and the transferee in a money-laundering transaction are willing and informed. The district court stated that the Monitor-related documents were relevant to the FTC's investigation nevertheless because both fraud and money laundering "have to do with money transferred from one place to another place due to the agency of a company like Western Union."
The district court's explanation of its decision with respect to the Monitor-related documents is "too spare to serve as a basis for our review."
On remand, the district court should make findings regarding how documents generated in connection with a monitorship imposed in settlement of a cross-border money-laundering investigation relates to Congress' grant of regulatory powers to the FTC.
We remand in accordance with the procedures set forth in
For the foregoing reasons, we hereby