SCOTUS: No Equitable Monetary Relief for FTC Under § 13(b)
Well, the buck stops here (for now).
In AMG Capital Management, LLC v. Federal Trade Commission, the Supreme Court unanimously ruled that Section 13(b) of the Federal Trade Commission (FTC) Act does not authorize the FTC to obtain equitable monetary relief such as restitution or disgorgement. This highly anticipated landmark decision reverses decades of precedent and strips the FTC of one of its key enforcement tools for obtaining consumer redress. The decision will likely represent a sea change in FTC enforcement practices. Read more here.
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The US Supreme Court ruled last week that the Federal Trade
Commission doesn t have the authority to seek equitable
monetary relief in federal court under Section 13(b) of the FTC Act
in
The text of Section 13(b) expressly allows the Commission to
seek injunctive relief (temporary restraining orders or preliminary
injunctions in aid of administrative proceedings, as well as
permanent injunctions in proper cases ), but is silent
on whether the agency can also seek equitable monetary relief.
Nonetheless, courts for years have ordered consumer redress,
Overview
In a unanimous decision reversing the Ninth Circuit, the Supreme
Court in
AMG Capital v. FTC ended a
federal circuit split and squarely held that the FTC lacks
authority to pursue equitable monetary relief in federal court
under Section 13(b) of the Federal Trade Commission Act (the Act ). The Ninth Circuit had upheld a permanent
injunction against defendant Scott Tucker s payday loan
business for engaging in unfair and deceptive practices, holding
that Section 13(b) allowed for ancillary relief,
including restitution[,] and affirming a $1.27 billion restitution
and disgorgement award. But the Supreme Court held that Section
13(b), by its language and structure, does not give the FTC the
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On April 22, 2021, the Supreme Court limited the Federal Trade Commission’s ability to seek restitution or disgorgement under Section 13(b) of the FTC Act. Justice Stephen G. Breyer, author of the unanimous 9-0 decision, interpreted the language and history of the statute to find that the FTC’s ability to obtain equitable monetary remedies under the statute would allow “a small statutory tail to wag a very large dog.”
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Background and Procedural History
Section 13(b) of the Federal Trade Commission Act (the “Act”) authorizes the FTC to seek “a permanent injunction” in federal court against “any person, partnership, or corporation” believed to be “violating, or [which] is about to violate, any provision of law” that the FTC enforces “in proper cases.”
Overview
In a unanimous decision reversing the Ninth Circuit, the Supreme Court in
AMG Capital v. FTC ended a federal circuit split and squarely held that the FTC lacks authority to pursue equitable monetary relief in federal court under Section 13(b) of the Federal Trade Commission Act (the “Act”). The Ninth Circuit had upheld a permanent injunction against defendant Scott Tucker’s payday loan business for engaging in unfair and deceptive practices, holding that Section 13(b) allowed for “ancillary relief,” including restitution and affirming a $1.27 billion restitution and disgorgement award. But the Supreme Court held that Section 13(b), by its language and structure, does not give the FTC the power to seek equitable monetary relief such as restitution or disgorgement. The justices stressed that the FTC remains free to seek restitution through the powers originally granted by the Act (pursuant to Sections 5 and 19), but only after conducting a more onerous proceeding