On March 20, 2026, the U.S. Court of Appeals for the Fifth Circuit held in Intuit, Inc. v. FTC that the FTC may not use its internal administrative process to adjudicate deceptive advertising claims under Section 5 of the FTC Act. The court vacated a twenty-year cease-and-desist order against Intuit and held that the FTC must pursue such claims in federal court.
The FTC brought an enforcement action against Intuit alleging that its advertising of TurboTax “Free Edition” was deceptive because most taxpayers did not qualify for the free product. After an unsuccessful bid for a preliminary injunction in the Northern District of California, the FTC abandoned the federal court action and pursued the case through its internal administrative process, where an Administrative Law Judge (“ALJ”) found the ads deceptive. The Commission affirmed and imposed a twenty-year cease-and-desist order that extended beyond TurboTax to all Intuit products.
Intuit argued that the FTC’s administrative adjudication violated Article III of the Constitution. Judge Edith Jones writing for the panel applied the framework articulated in the 2024 Supreme Court case, SEC v. Jarkesy, by asking whether the FTC’s statutory cause of action was rooted in traditional common-law or equity claims (implicating “private rights” that require Article III adjudication) or instead involves “public rights” that Congress may assign to an agency. Jarkesy involved a similar, but not identical, question—whether the SEC’s administrative adjudication process violated the Seventh Amendment’s jury trial right, which extends to suits “at common law.” The Supreme Court directed courts analyzing this issue to consider “the cause of action and the remedy it provides,” but that “the remedy was the ‘more important’ consideration.” Here, however, the Fifth Circuit analyzed more broadly whether the FTC’s ALJ procedure violated Article III by adjudicating “private rights,” which includes both suits at common law and equity.
The court concluded that FTC deceptive advertising claims share a common ancestry with traditional common-law actions for fraud, deceit, and unfair competition: they target the same basic conduct (material misrepresentations likely to mislead), operate under similar legal principles, and employ familiar common-law terms of art. The Court also noted that the agency’s available remedy—cease-and-desist orders—are similar to the traditional remedies available in courts of equity.
The FTC argued that its deception standard was sufficiently distinct from common-law fraud—principally, that Section 5 does not require proof of fraudulent intent or consumer harm—but the court observed that the Jarkesy Court had identified similar distinctions between SEC securities fraud and common-law fraud without finding them dispositive.
The court’s holding is narrow in that it addresses only deceptive advertising claims, not the FTC’s authority to adjudicate “unfair methods of competition” or other “unfair acts or practices” under Section 5, and it is binding only within the Fifth Circuit. It is unclear whether this case—which involves ads that Intuit discontinued years ago and an enforcement action brought under the prior administration—will be the vehicle that tests this issue at the Supreme Court.
That said, the court’s reasoning will almost certainly be tested beyond the deception context. Many FTC enforcement actions blend deception and unfairness theories, and future respondents will likely invoke this decision to challenge administrative adjudication across a range of Section 5 claims. Judge Ho’s concurrence—which broadly criticized the FTC's combination of prosecutorial and adjudicative functions—may signal judicial appetite for going further.
The decision’s practical significance will depend in large part on how the FTC responds. The Agency could treat this as a Fifth Circuit-specific constraint and continue using its internal process elsewhere. Alternatively, it may read the decision—together with broader trends, including the current Commission’s stated preference for litigating competition cases directly in federal court—as reason to shift toward court-based enforcement more broadly. The Commission may have anticipated this as it appears to have already been making the strategic decision to steer away from use of its ALJs. Companies facing or anticipating FTC enforcement should consider both possibilities when evaluating their exposure.
Even outside the Fifth Circuit, respondents in FTC administrative proceedings now have a credible basis to challenge the agency’s adjudicative authority, creating litigation risk for the Commission that will factor into its future enforcement decisions. Companies currently subject to pending proceedings involving deception claims should evaluate whether this decision provides grounds to contest those proceedings. Prior final orders and consent decrees are not automatically affected, but may warrant a fresh look depending on the procedural posture of each matter.
We will continue to monitor developments in this area, including whether the FTC seeks cert and the Supreme Court’s pending consideration of FTC commissioner removal protections in Trump v. Slaughter.
If you have questions about how this decision may affect you, please contact any of the attorneys named in this alert.
Back
