n 2012, the FTC filed a complaint against multiple defendants accusing them of violating the Federal Trade Commission Act, the Truth in Lending Act and the Electronic Fund Transfer Act. Specifically, the agency alleged the defendants engaged in unfair and deceptive practices by offering and extending “high-fee, short-term ‘payday’ loans and the collection of those loans.”

The court bifurcated the case and said it would first determine whether—and to what extent—the FTC has authority over the parties asserting Indian tribe sovereignty. The defendants argued that, because they were arms of an Indian tribe, employees of an arm of an Indian tribe or businesses associated with arms of an Indian tribe, the FTC lacked the authority to regulate them.

But U.S. District Judge Gloria M. Navarro, affirming a report and recommendation of a magistrate judge, disagreed.

“[T]he FTC Act is a federal statute of general applicability that under controlling Ninth Circuit precedent grants the FTC authority to regulate arms of Indian tribes, their employees, and their contractors,” she concluded.

Judge Navarro shot down three lines of argument from the defendants. First, the burden of establishing whether the defendants fell within the FTC’s jurisdiction to enforce the FTC Act fell on the charged parties, she wrote, not the agency, because of their attempt to claim an exemption from the act.