IN THE UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF FLORIDA 

FT. LAUDERDALE DIVISION 

Case No. 0:20-CV-61010-AHS 

NACSO NONPROFIT BUSINESS 

LEAGUE INC., 

 Plaintiff, 

vs. 

CONSUMER FINANCIAL PROTECTION 

BUREAU and FEDERAL TRADE 

 COMMISSION, 

 Defendants. 

____________________________________/ 

DEFENDANTS’ REPLY IN FURTHER SUPPORT OF THEIR MOTION TO DISMISS 

PURSUANT TO FED. R. CIV. P. 12(b)(1) AND 12(b)(6) 

NACSO’s Amended Complaint challenges the promulgation of the Telemarketing Sales 

Rule’s (TSR) advance-fee prohibition, a prohibition that applies to credit repair organizations. As 

Defendants (the Consumer Financial Protection Bureau (CFPB) and the Federal Trade 

Commission (FTC)) explained, this Court lacks subject-matter jurisdiction with respect to all three 

counts of the Amended Complaint. Defendants’ Motion to Dismiss (Doc. 25) at 5-8. The reason 

for this is that the Amended Complaint alleges violations of the Administrative Procedure Act 

(APA), but the only final agency action that NACSO challenges occurred far outside of the APA’s 

six-year jurisdictional statute of limitations. Id. NACSO has just one answer: It contends that all 

three counts assert a “substantive as-applied challenge” to the TSR’s advance-fee prohibition. See 

Response in Opposition to Defendants’ Motion to Dismiss (Doc. 29) at 1, 7, 8, 9, 10. However, 

even when a plaintiff makes a substantive as-applied challenge pursuant to the APA, it must still 

identify final agency action that occurred within the preceding six years. NACSO fails to do that. 

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ARGUMENT 

All three counts of NACSO’s Amended Complaint allege that promulgation of the TSR’s 

advance-fee prohibition violated the APA. As Defendants explained, and Plaintiffs do not contest, 

the APA is the only statute that could provide this Court with a waiver of sovereign immunity and, 

accordingly, subject matter jurisdiction. Doc. 25 at 8 n.3. An action alleging an APA violation 

must challenge “final agency action” that occurred within the preceding six years. 5 U.S.C. § 704; 

28 U.S.C. § 2401(a); see Doc. 25 at 7, 12. But the only final agency action challenged in the 

Amended Complaint is Defendant FTC’s promulgation of the TSR’s advance-fee prohibition. Doc. 

25 at 8. Because the FTC promulgated that provision in 1995, NACSO’s challenge falls far outside 

the APA’s six-year statute of limitations. Id. at 6. Further, that statute of limitations is 

jurisdictional, and as a result, this Court lacks subject matter jurisdiction with respect to all three 

counts of the Amended Complaint. Id. 

NACSO tries to get around this problem by claiming that it is making a “substantive, asapplied challenge.” Doc. 29 at 8. This argument reflects the summary allegation NACSO makes 

in its Amended Complaint: “This action was filed within 6 years of the substantive application of 

the TSR to members of NACSO.” Doc. 14 at ¶ 13. While it is true that a plaintiff who makes a 

substantive as-applied challenge may, in appropriate circumstances, be able to challenge the 

statutory authority or constitutionality of a rule that was issued more than six years earlier, that 

plaintiff must still identify a final agency action that both applied the rule to the plaintiff and 

occurred within the preceding six years. See Doc. 25 at 10.1

1

 All the cases cited by NACSO, see Doc. 29 at 7, actually support Defendants’ argument. See 

Wind River Mining Corp. v. United States, 946 F.2d 710 (9th Cir. 1991) (court permitted the 

plaintiff to challenge the constitutionality of an agency decision that had occurred more than six 

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NACSO fails to do this, because what it refers to as “substantive applications” are not final 

agency actions, and nowhere in its Amended Complaint does it identify any final agency action 

taken by either of the Defendants within the preceding six years. At Paragraph 3 of its Amended 

Complaint, NACSO describes two actions taken by Defendant CFPB against two entities that 

NACSO contends are among its members: the filing of a complaint in a district court seeking to 

enforce the advance-fee prohibition of the TSR (BCFP v. Commonwealth Equity Group, LLC, 

No. 1:20-cv-10991 (D. Mass. Complaint filed May 22, 2020)), and the initiation of an investigation 

by the CFPB against a Doe corporation.2

 NACSO refers to each of these actions as a “substantive 

application” of the TSR.3 But no matter what NACSO chooses to call them, neither constitutes 

years earlier only because there had been final agency action applying that decision to the plaintiff 

within six years of the filing of the complaint); Alabama v. PCI Gaming Auth., 801 F.3d 1278 

(11th Cir. 2015) (the court refused to permit the state to challenge a Department of Interior decision 

taking certain lands into trust because that decision had been reached more than six years prior to 

the filing of the state’s complaint); Legal Env’t Assistance Found. v. EPA, 118 F.3d 1467 (11th 

Cir. 1997) (regulations that are immune from direct review may nonetheless be reviewed as part 

of a challenge to a final agency action based on those regulations); Fla. Keys Citizens Coal. v. 

West, 996 F. Supp. 1254 (S.D. Fla. 1998) (even though a regulation permitting the discharge of 

pollutants had been issued more than six years earlier, the plaintiff could nonetheless challenge 

that regulation if the plaintiff could show that, within the preceding six years, it had been affected 

by a permit granted pursuant to the regulation). 

2

 When either the CFPB or the FTC brings an action to enforce the advance-fee prohibition, the 

defendant is generally free in its defense to challenge the TSR, and indeed, in Commonwealth 

Equity Group, the defendants did so. See BCFP v. Commonwealth Equity Gp., No. 1:20-cv-10991-

RWZ at ECF 30 (Memorandum in Support of Motion to Dismiss, filed Sept. 30, 2020) (alleging 

that the FTC lacked statutory authority to promulgate the TSR’s advance-fee prohibition, and that 

the provision was unconstitutional). NACSO could attempt to intervene in that action but has not 

done so. 

3

 Both of these “substantive applications” were taken by the CFPB. See Doc. 29 at 2 (“The claims 

asserted by NACSO arise out of the application and enforcement of the TSR by the [CFPB]”). 

NACSO’s Amended Complaint does not identify any “substantive application” taken by 

Defendant FTC against any of its members. 

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final agency action.4

 Doc. 25 at 13, citing FTC v. Standard Oil Co. of Cal., 449 U.S. 232, 239 

(1980) (“[t]he Commission’s issuance of its complaint was not ‘final agency action’”), and First 

Nat’l Monetary Corp. v. CFTC, 677 F.2d 522, 525 (6th Cir. 1982) (“the act of filing a complaint 

is interlocutory and not ‘final’”). 

Indeed, NACSO concedes that the only final agency action it challenges is the 

promulgation of the TSR.5 See Doc. 29 at 1 (“[t]he Amended Complaint alleges ... the final agency 

action to be the promulgation of the TSR”). That concession is fatal to NACSO’s case. The 

promulgation of the TSR occurred more than 19 years outside the APA’s statute of limitations. 

Because NACSO does not challenge any final agency action that occurred within the six years 

preceding its Amended Complaint, this Court lacks subject matter jurisdiction and the Amended 

Complaint must be dismissed. 

Finally, NACSO continues to urge this Court to grant a declaratory judgment. Doc. 29 at 

9-10 citing MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007). However, the Declaratory 

4

 NACSO also refers to a statement issued by the CFPB advising credit bureaus, and those who 

furnish information to credit bureaus, that under the Fair Credit Reporting Act and its 

implementing regulations, they need not “investigate disputes submitted by credit repair 

organizations and disputes they reasonably determine to be frivolous or irrelevant.” See Doc. 29 

at 2, citing Doc. 14 at ¶ 4, in turn citing https://files.consumerfinance.gov/f/documents/ 

cfpb_credit-reporting-policy-statement_cares-act_2020-04.pdf. This statement has nothing to do 

with the TSR’s advance-fee prohibition, and, in any event, is not final agency action. See Indep. 

Equip. Dealers Ass’n v. EPA, 372 F.3d 420, 427 (D.C. Cir. 2004) (letter that is informational in 

nature does not constitute final agency action). 

5

 This concession, which applies to all three counts of NACSO’s Amended Complaint, see Doc. 

29 at 10-11, establishes a second flaw with respect to counts II and III (the only counts that name 

the CFPB). In particular, these two counts are not only beyond this Court’s subject matter 

jurisdiction (with respect to both Defendants), but should also be dismissed with respect to the 

CFPB pursuant to Fed. R. Civ. P. 12(b)(6) for failing to state a claim because the CFPB did not 

promulgate, and has no rulemaking authority with respect to, the TSR. See Doc. 25 at 4 & n.2. 

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Judgment Act does not confer jurisdiction upon this Court. See Sellers v. Nationwide Mut. Fire 

Ins. Co., 968 F.3d 1267, 1273 (11th Cir. 2020). Further, MedImmune merely addresses whether, 

in a case where the court otherwise had subject matter jurisdiction, there was a justiciable case or 

controversy. Here, NACSO’s problem is that it has failed to identify an applicable waiver of 

sovereign immunity, a jurisdictional requirement in an action that, unlike MedImmune, is brought 

against the government. FDIC v. Meyer, 510 U.S. 471, 475 (1994). Because NACSO has not 

otherwise established subject matter jurisdiction, this Court has no authority to grant a declaratory 

judgment.6

CONCLUSION 

 For the reasons set forth above, and in Defendants’ Motion to Dismiss, this Court should 

dismiss NACSO’s Amended Complaint. 

 

6

 Moreover, even if this Court had subject matter jurisdiction, it should decline to enter a 

declaratory judgment because, as explained in footnote 2 above, NACSO’s members have a 

procedurally appropriate means to challenge the TSR if either the CFPB or the FTC brings an 

enforcement action against one of them. See also Doc. 25 at 8-11. 

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Dated: February 10, 2021 Respectfully submitted, 

JAMES REILLY DOLAN 

Acting General Counsel 

JOEL MARCUS 

Deputy General Counsel 

/s/ Imad Abyad 

IMAD D. ABYAD 

Attorney 

Phone: 202-326-3579 

Email: iabyad@ftc.gov 

Federal Trade Commission 

600 Pennsylvania Avenue, N.W. 

Washington, DC 20580 

Counsel for Defendant 

FEDERAL TRADE COMMISSION 

MARY McLEOD 

General Counsel 

JOHN R. COLEMAN 

Deputy General Counsel 

LAURA M. HUSSAIN 

Assistant General Counsel 

/s/ Lawrence DeMille-Wagman 

LAWRENCE DEMILLE-WAGMAN 

Senior Litigation Counsel 

Phone: 202-435-7957 

E-mail: Lawrence.DeMille-Wagman@cfpb.gov 

Consumer Financial Protection Bureau 

1700 G Street, N.W. 

Washington, D.C. 20552 

Counsel for Defendant 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

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