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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, including disgorgement and restitution under Section 13(b) in response to agency requests.
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On 22 April, the Supreme Court dealt a striking blow to the Federal Trade Commission’s (FTC) longstanding reliance on Section 13(b) of the Federal Trade Commission Act (FTC Act) as a basis for obtaining monetary relief for consumers. In a unanimous ruling in AMG Capital Management, LLC v. Federal Trade Commission, the Court held that Section 13(b) does not authorize the FTC to recover monetary remedies such as restitution and disgorgement of profits. Acting FTC Chairwoman Rebecca Kelly Slaughter criticized the decision, noting that Section 13(b) cases have resulted in “$11.2 billion in refunds to consumers during just the past five years.” The FTC has asked Congress to amend Section 13(b) authority in light of the Court’s opinion. In the absence of Congressional intervention, the FTC is likely to increase reliance on a little-used and more burdensome mechanism under Section 19 of the FTC Act to obtain monetary reli
Last week, the U.S. Supreme Court decided unanimously in
AMG Capital Management, LLC v. FTC that Section 13(b) of the Federal Trade Commission Act of 1914 (FTC Act) does not authorize the Federal Trade Commission (FTC) to seek monetary relief from defendants in federal court. We had anticipated this outcome in our December 2020 client alert “Supreme Court Review of FTC Monetary Relief Authority Threatens Long-Standing Agency Practice.”
As we noted then, for decades the FTC used Section 13(b) to seek billions of dollars in restitution and disgorgement in a wide range of cases, including those involving telemarketing and online frauds, deceptive business practices, data security and privacy breaches, as well as in antitrust conduct cases. In its opinion, the Court seemingly slammed the door on the FTC’s long-standing practice. The curb on the FTC, however, may well be short-lived as Congress is expected to enact legislation that will authorize the FTC to seek monetary relief d
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On April 22, 2021, the Supreme Court resolved a circuit split as to the Federal Trade Commission’s authority to seek restitution in a federal court action under the Federal Trade Commission Act (“Act”) without first obtaining a final cease and desist order in an administrative proceeding under the Act. In a unanimous opinion authored by Justice Breyer, the Court held in
AMG Capital Mgmnt., LLC v. FTC, No. 19-508, that § 13(b) does not authorize the FTC to seek equitable monetary awards in addition to injunctive relief in stand-alone federal court litigation. Such restitution is only available to the FTC in federal court after an administrative law judge has found in favor of the agency in an administrative proceeding.
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On April 20, 2021, in anticipation of an adverse Supreme Court ruling, the Senate Committee on Commerce, Science, and Transportation held a hearing titled, “Strengthening the Federal Trade Commission’s Authority to Protect Consumers.” Two days after the hearing, on April 22, 2021,
the U.S. Supreme Court ruled that Section 13(b) of the Federal Trade Commission Act (the “Act”) does not authorize the FTC to seek, or a court to award, equitable monetary relief such as restitution or disgorgement. At the hearing, the four currently serving FTC Commissioners presented testimony urging Congress to amend the Act to expressly provide the authority that the Supreme Court found not to presently exist.