Neora won't get the FTC to foot its legal bill. A federal court rejected the company's request for $5.2 million in attorney's fees and expert expenses on May 29th, despite Neora's decisive victory against the agency last year.

Neora had argued the FTC's case was so weak it should pay the costs. The company pointed to language in the court's findings showing the FTC presented "no evidence" on various key issues. Neora also claimed "clear and unambiguous legal precedent" made the outcome inevitable from the start.

The court wasn't buying it. In its decision, the judge acknowledged the case was close—close enough that it required "careful scrutiny, assessment, and weighing of every piece of evidence in context following a comprehensive trial." The court found the FTC's position had a reasonable basis in both law and fact, which under the Equal Access to Justice Act meant no fee award for Neora.

The court essentially called out Neora for downplaying the legitimate disputes that ran through the entire case. The judge pointed to substantial factual disagreements between the parties, a Supreme Court decision that intervened mid-case and clarified the FTC's recovery options, the agency's wins on several pre-trial motions, the lack of clear binding precedent on certain issues, and the fact that similar evidence had worked for the FTC in other cases.

What makes this decision notable: Neora prevailed on the actual merits by proving it had sufficient retail sales activity. That's the real win here. But the fee denial suggests the court thought the FTC had reasonable grounds to bring the case in the first place.

The backdrop matters. A Supreme Court ruling in AMG Capital Management threw a wrench into how the FTC regulates multilevel marketing schemes. Nobody saw that decision coming, and it created serious complications for enforcement efforts. If the FTC had actually won against Neora, damages would have been slashed anyway because of how AMG reshaped the legal landscape.

The court's reasoning gets a bit murky here. The judge seemed to bend over backward to justify why the FTC didn't focus more heavily on Neora's retail sales revenue. The FTC built its pyramid scheme claim around the second prong of the Koscot test, which examines whether scheme participants receive rewards for recruiting others that are unrelated to actual product sales to outside customers. Since that test evaluates the rights participants get through the scheme, the FTC argued courts should focus on what those particular rights actually were.

Still, the bottom line is straightforward: Neora beat the FTC but gets nothing for the fight. The court found the agency's case was reasonably grounded enough to deny the fee request, even if the company ultimately proved its point on retail activity.

🤖 Quick Answer

What was the outcome of Neora's request for attorney's fees against the FTC?
A federal court rejected Neora's claim for $5.2 million in legal and expert fees on May 29th, despite the company's victory against the FTC in the previous year. The judge determined the case was sufficiently complex and the FTC's legal position reasonably founded, declining to impose fee liability on the agency.

On what grounds did Neora argue the FTC should cover its legal costs?
Neora contended that the FTC's case was fundamentally weak, citing the court's findings that the agency presented no evidence on critical issues. The company also invoked established legal precedents it characterized as clear and unambiguous, arguing the case outcome was predetermined from its inception.

How did the court characterize the complexity of the litigation?
The judge acknowledged the case required substantial judicial effort, including careful

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