Term: 2020
Docket: 19-508
Amg Capital Management, Llc v. Federal Trade Commission
- Pro
19-508 AMG CAPITAL MANAGEMENT, LLC V. FTC DECISION BELOW: 910 F.3d 417 CONSOLIDATED WITH 19-825 FOR ONE HOUR ORAL ARGUMENT. ORDER OF NOVEMBER 9, 2020: THIS CASE IS NO LONGER CONSOLIDATED WITH NO. 19-825. CERT. GRANTED 7/9/2020 QUESTION PRESENTED: The Federal Trade Commission Act, Pub. L. No. 63- 203, 38 Stat. 717 (1914) (codified as amended at 15 U.S.C.§§ 41 et seq.), generally "empower[s] and direct[s]" the Federal Trade Commission "to prevent" persons from using "unfair or deceptive acts or practices in or affecting commerce." 15 U.S.C. §45(a)(2). By its terms, § 13 (b) of the Act authorizes the Commission to seek "preliminary injunction[s]" and, "in proper cases," "permanent injunction[s]." 15 U.S.C. §53(b). The question presented is: Whether §13(b) of the Act, by authorizing "injunction[s]," also authorizes the Commission to demand monetary relief such as restitution - and if so, the scope of the limits or requirements for such relief. LOWER COURT CASE NUMBER: 16-17197
The U.S. Supreme Court case AMG Capital Management, LLC v. Federal Trade Commission (2020) revolved around the extent of the Federal Trade Commission's (FTC) authority to seek monetary relief under Section 13(b) of the FTC Act. The defendant, Scott Tucker and his payday loan companies were ordered by a lower court to pay $1.27 billion in restitution and disgorgement for deceptive practices after an FTC lawsuit in 2012. However, Tucker argued that this exceeded the FTC's statutory authority as section 13(b) only allows injunctions not financial penalties or compensation for victims. In April 2021, the Supreme Court ruled unanimously in favor of AMG Capital Management stating that Section 13(b), which authorizes 'injunctions,' does not grant authority to secure monetary relief such as restitution or disgorgement directly from courts without first administratively determining rule violation and pursuing traditional cease-and-desist procedures outlined elsewhere within its enabling statute. This ruling significantly limits one avenue through which the FTC has traditionally sought consumer redress against unfair or deceptive acts or practices but leaves open other avenues provided they follow due process steps laid out by Congress when it created and empowered this agency.
In the dissenting opinion for AMG Capital Management, LLC v. Federal Trade Commission (FTC), Justice Breyer argued that the majority's interpretation of Section 13(b) of the FTC Act was too narrow and inconsistent with Congress' intent when it enacted this provision. He contended that by limiting the FTC's authority to seek equitable monetary relief such as restitution or disgorgement under Section 13(b), the Court effectively undermined a critical tool used by the agency to protect consumers from unfair or deceptive practices. According to Justice Breyer, historical practice and precedent supported a broader reading of Section 13(b) which allowed for such remedies in addition to injunctions. Furthermore, he warned that without access to these forms of relief, many victims would be left uncompensated while wrongdoers kept their ill-gotten gains.
