On Thursday, in a unanimous decision written by Justice Stephen Breyer, the Supreme Court ruled that the Federal Trade Commission (FTC) does not have 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
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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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.
In
AMG Capital Management, LLC, et al. v. Federal
Trade Commission, the Supreme Court of the United States
held that the FTC does not have the authority under Section 13(b) ( Temporary restraining
orders; preliminary injunctions ) of the Federal Trade
Commission Act (the Act ) to seek equitable monetary
relief.
Justice Breyer delivered the Opinion for a unanimous Court, in
which the Court stated that the FTC - in seeking restitution and
disgorgement pursuant to Section 13(b) - acted in accordance with its increasing tendency to use Section 13(b) to seek
monetary awards without prior use of the Commission s
traditional administrative process.