FTC Hits Back at Data Broker Kochava’s Bid to Stop Enforcement Action

On Tuesday, the Federal Trade Commission (FTC) argued that Idaho-based Kochava Inc.’s “preemptive suit” intended to stop a separate enforcement action filed against the company in late August is inappropriate and must be tossed for failure to satisfy threshold requirements.

Reportedly, Kochava is a digital marketing and analytics service, which, among other things, aggregates third-party provided mobile device data, including the latitude, longitude, IP address, and mobile advertising identifier associated with users’ smartphones. The company then links this information to emails and IP addresses in its allegedly publicly accessible Data Marketplace and sells it, the FTC says. 

According to the FTC’s motion to dismiss, when Kochava was told that it was the target of a potential civil enforcement action, Kochava responded by “racing to the courthouse and suing the FTC” for declaratory and injunctive relief. Shortly thereafter, the FTC filed its affirmative action also in the District of Idaho.

Briefing concluded on Kochava’s motion to dismiss the FTC’s suit in early December. Now, the FTC says Kochava’s defensive suit must be disposed of for failure to satisfy the standing requirement because it does not allege a concrete, actual injury or the threat of one.

In addition, the filing says Kochava’s complaint invokes no cause of action. Instead, its case which “embodies the disfavored tactic of a declaratory suit that seeks to preempt a forthcoming enforcement action,” is the sort regularly dismissed in favor of hearing the case filed by the government, “the natural plaintiff,” the FTC asserts. 

Lastly, the FTC contends that Kochava’s constitutional arguments have no traction.“[A]ny potential constitutional challenge to the FTC’s structure rests on a faulty premise and lacks any link between the supposed constitutional infirmity and harm to Kochava,” the motion says, asserting that the complaint falls short of the Federal Rules’ plausibility requirement.

Both cases are before Judge B. Lynn Winmill.

The FTC is represented by its own counsel and Kochava by Gordon Rees Scully Mansukhani LLP.