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
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
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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
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Welcome to Wiley’s update on recent developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory announcements, recap key enforcement actions, and preview upcoming deadlines and events. We also include links to our articles, blogs, and webinars with more analysis in these areas. We understand that keeping on top of the rapidly evolving regulatory landscape is more important than ever for businesses seeking to offer new and ground-breaking technologies.
Regulatory Announcements
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In a unanimous decision on April 22, 2021, the U.S. Supreme Court significantly limited the ability of the Federal Trade Commission (FTC) to obtain monetary relief in federal court cases. In
AMG Capital Management, LLC v. FTC, the Court held that the FTC does not have the authority to seek equitable monetary relief when it files cases in federal court under Section 13(b) of the FTC Act.
The FTC relies on Section 13(b) to recover money in a wide range of cases – including marketing and advertising cases – and the Court’s decision will restrict the FTC’s ability to obtain money in pending investigations and litigation. While the FTC has called on Congress to pass a statutory fix, the agency also has signaled it is more likely to consider rulemaking as well as new enforcement approaches.