“Deceptive” ≠ “Unfair”: The Fifth-Circuit’s Definitive Statement on §45(n) and the Scope of FTC Authority – Commentary on Traffic Jam Events v. FTC, No. 21-60947 (5th Cir. 2025)

1. Introduction

Traffic Jam Events v. FTC presented the U.S. Court of Appeals for the Fifth Circuit with a full slate of constitutional, statutory and remedial objections to an FTC cease-and-desist order issued against an advertising firm that designed eye-catching—and allegedly deceptive—auto-sales mailers. Traffic Jam Events, L.L.C. (“TJE”) and its president David Jeansonne II challenged virtually every aspect of the agency proceeding: the FTC’s constitutionality, its jurisdiction, the substantive deception findings, Truth-in-Lending-Act (“TILA”) liability, the breadth of the ban imposed, and Jeansonne’s personal liability.

The Fifth Circuit rejected each argument and denied the petition for review, but in doing so the panel offered major clarifications that will resonate far beyond the immediate parties:

It definitively held that §45(n)’s “unfairness” limitations do not apply to “deception” cases, thereby preserving a broad, stand-alone FTC deception power.
It embedded into circuit law the three-part “harm” test—drawn from Collins/Community Financial—for litigants seeking relief based on unconstitutional removal protections.
It reinforced Carr/Sims principles on exhaustion of structural constitutional claims, while simultaneously reminding litigants that remedial/record-based objections must be raised before the agency.
It endorsed a generous reading of TILA §144 and Regulation Z, holding that any advertiser, not just “creditors,” is covered when credit terms are promoted.

2. Summary of the Judgment

After an FTC summary decision found TJE’s mailers deceptive and entered a sweeping order banning the company and Jeansonne from all auto-related advertising, TJE petitioned for appellate review. The Fifth Circuit (Judge Priscilla Richman, joined by Judges Stewart and Dennis) held:

Appointments-Clause arguments were not forfeited, but petitioners failed to show “harm” under the Collins/Community Financial standard.
Due-process and Seventh-Amendment claims were forfeited or meritless.
FTC jurisdiction was proper: the mailers “in or affecting commerce” easily satisfied §45(a), and §45(n) is textually confined to “unfair” practices only.
The non-delegation attack on the deception authority failed; “deceptive” itself is an adequate “intelligible principle.”
The mailers were materially deceptive under the FTC’s 1983 Policy Statement on Deception; substantial evidence supported liability.
TJE was an “advertiser” subject to TILA §144 and Regulation Z despite not being a “creditor.”
Challenges to the breadth of the cease-and-desist order were forfeited for failure to raise them below.
Substantial evidence supported individual liability for Jeansonne.

3. Analysis

3.1 Precedents Cited and Their Influence

Carr v. Saul, 593 U.S. 83 (2021) – Guided the court’s decision not to deem Appointments-Clause challenges forfeited, stressing structural constitutional issues and the futility of raising them before ALJs.
Axon Enterprise v. FTC, 598 U.S. 175 (2023) – Confirmed that district-court challenges to FTC structure can bypass administrative exhaustion, bolstering acceptance of late-raised structural claims.
Community Financial Services v. CFPB, 51 F.4th 616 (5th Cir. 2022), rev’d 601 U.S. 416 (2024) & remand decision 104 F.4th 930 (2024) – Supplied the three-prong “harm” test for removal-protection challenges adopted here.
Withrow v. Larkin, 421 U.S. 35 (1975) & Gibson v. FTC, 682 F.2d 554 (5th Cir. 1982) – Reaffirmed that investigative/adjudicative combination within an agency does not violate due process absent concrete bias.
Free Enterprise Fund v. PCAOB, 561 U.S. 477 (2010) & Lucia v. SEC, 585 U.S. 237 (2018) – Informed the merits of the removal-protection argument even though petitioners ultimately lost for lack of showing harm.
Whitman v. American Trucking, 531 U.S. 457 (2001), National Broadcasting Co. & Yakus – Provided the non-delegation background against which the “intelligible principle” test was assessed.
Big Time Vapes v. FDA, 963 F.3d 436 (5th Cir. 2020) – Cited as part of the court’s reluctance to find non-delegation violations.
TILA & Regulation Z interpretive materials – Fed. Reserve’s Official Staff Commentary confirmed that advertising rules bind non-creditors.

3.2 Legal Reasoning Explained

3.2.1 Structural-Constitutional Claims and the “Harm” Prerequisite

Even if the dual-layer removal protections for FTC ALJs mirror those struck down in Free Enterprise, the Fifth Circuit—faithful to Collins—requires specific, demonstrable injury: (i) presidential desire to remove, (ii) inability to remove, and (iii) nexus between that desire and the challenged action. TJE made no showing on any prong, so the constitutional issue remained academic.

3.2.2 Scope of FTC Jurisdiction: “In or Affecting Commerce”

The court located jurisdiction in §45(a)’s “in or affecting commerce” language, noting that Congress deliberately broadened that phrase after Bunte Bros.. TJE’s nationwide printing and mailing easily sufficed.

3.2.3 The §45(n) Debate—Why Deception Stands Alone

Section 45(n) strips the FTC of authority to condemn an act as “unfair” unless the substantial-injury trilogy is met. Significantly, the text omits “deceptive.” Applying the “negative-implication” canon (Russello/ Keene), the court held that Congress intentionally confined §45(n) to “unfairness.” Hence, in a deception case the Commission need not prove substantial, unavoidable injury.

3.2.4 Non-Delegation Challenge

The petitioners argued that without §45(n) as a leash, the FTC possesses an unfettered power to define “deception.” The court countered that the statutory word “deceptive,” reinforced by common-law and dictionary meaning, is itself an “intelligible principle.” Compared with delegations validated in Yakus (“fair and equitable prices”) or NBC (“public interest”), the assignment here easily passes muster.

3.2.5 TILA Liability for Non-Creditors

The plain text of §144 speaks to “any advertisement … to aid, promote or assist … any … extension of credit.” Because Regulation Z defines “advertisement” broadly and the Official Staff Commentary confirms applicability to builders, merchants, etc., TJE’s status as a non-creditor was no shield.

3.2.6 Forfeiture of Remedial Challenges

Carr/Sims excused exhaustion for structural claims, but not for fact-bound complaints over remedy breadth. Those had to be flagged to the FTC so the agency could tailor the order; TJE’s silence doomed that argument.

3.2.7 Individual Liability Standard

Borrowing from the Seventh, Tenth and Eleventh Circuits (Amy Travel, Freecom, IAB Marketing), the court reiterated the twin elements: (i) authority to control or direct participation, and (ii) knowledge (actual or imputed). Jeansonne’s hands-on role, plus prior state settlements, supplied both elements.

3.3 Potential Impact

FTC Enforcement Posture: By confirming that deception claims need not satisfy §45(n), the Fifth Circuit has insulated a large share of the FTC’s consumer-protection docket from substantial-injury debates. Expect more aggressive reliance on deception theories, especially in the advertising realm.
Non-Delegation Litigation: The opinion may discourage future non-delegation challenges to the FTC Act; “deceptive” is now a court-blessed “intelligible principle” within the Fifth Circuit.
Removal-Protection Doctrine: Litigants must marshal evidence of actual presidential frustration to win relief. Merely pointing to dual layers of protection is insufficient.
TILA Advertising Coverage: Marketing agencies, fintech “lead generators,” and social-media influencers should note that promoting loan terms can trigger Regulation Z even if they never extend credit themselves.
Strategic Litigation Considerations: The forfeiture rulings reinforce the need for respondents to articulate remedial objections during the administrative phase; sitting silent risks waiver.

4. Complex Concepts Simplified

15 U.S.C. §45(a) vs. §45(n): §45(a) grants the FTC power over “unfair or deceptive acts or practices in or affecting commerce.” §45(n) limits the FTC only when it labels conduct “unfair”; it requires proof of substantial, non-avoidable consumer injury not outweighed by benefits. The Fifth Circuit says: different words, different tests.
Dual-Layer Removal Protection: Some agency actors can be fired by the President only “for cause,” and additionally can be removed by superiors who themselves are protected. Free Enterprise disapproved that structure for the PCAOB. But under Collins, a plaintiff must still show actual harm to unwind past decisions.
Non-Delegation / “Intelligible Principle”: Congress may give agencies discretion if it supplies a guiding standard (the “intelligible principle”). Very few statutes fail this test. Here, the term “deceptive” is deemed sufficiently concrete.
TILA §144 & Regulation Z “Triggering Terms”: If an ad touts credit “trigger” terms (e.g., low monthly payment, APR, down-payment amount) it must also disclose standardized cost information “clearly and conspicuously.” Violation is strict-liability: advertiser intent is irrelevant.

5. Conclusion

Traffic Jam Events v. FTC is more than a routine affirmance; it crystallizes several doctrinal threads:

The deception prong of §45 stands on its own textual footing—§45(n) does not constrain it.
Structural constitutional claims may reach the courts unexhausted, but tangible “harm” is now the Fifth Circuit’s litmus test for removal-protection relief.
Advertising intermediaries cannot escape TILA when they tout credit terms.
Failing to raise remedial objections before the agency is fatal, underscoring the strategic importance of building a fulsome administrative record.

Collectively, the decision empowers the FTC’s consumer-protection mission, tightens the evidentiary demands on constitutional challengers, and warns marketers that flashy mailers and COVID-era gimmicks will receive strict scrutiny. Future litigants navigating the intersection of advertising, consumer credit, and administrative law must now chart their course with this Fifth-Circuit beacon squarely in view.

“Deceptive” ≠ “Unfair”: The Fifth-Circuit’s Definitive Statement on §45(n) and the Scope of FTC Authority – A Commentary on Traffic Jam Events v. FTC (2025)