Supreme Court Holds Federal Trade Commission Cannot Seek Monetary Relief, Such As Restitution Or Disgorgement, To Redress Unfair Or Deceptive Conduct

AMG Capital Management, LLC v. Federal Trade Commission, No. 19-508

Introduction: In a unanimous opinion, the Supreme Court held that the Federal Trade Commission Act does not allow the Federal Trade Commission (FTC) to seek, or a court to award, equitable monetary relief to redress unfair or deceptive conduct.

Background: The Federal Trade Commission Act prohibits “unfair or deceptive” commercial practices. Section 13(b) of the Act, 15 U.S.C. § 53(b), grants the FTC authority to enforce that prohibition by seeking a “permanent injunction” against violators. Since the late 1970s, the FTC has increasingly invoked that authority to seek court orders of equitable monetary relief, such as restitution or disgorgement. That is what happened in this case. The FTC sought and obtained over $1 billion in restitution and disgorgement from a payday lender that allegedly engaged in deceptive loan renewal practices. The Ninth Circuit rejected the lender’s challenge to the FTC’s authority to obtain equitable monetary relief under Section 13(b).

Issue: Whether Section 13(b) of the Federal Trade Commission Act authorizes the FTC to seek, and a court to award, equitable monetary relief as part of a “permanent injunction.”

Court’s Holding: In an opinion authored by Justice Breyer, the Supreme Court held 9-0 that Section 13(b) does not allow the FTC to seek or to obtain equitable monetary relief. Three points were dispositive. First, the statutory language references only injunctions, which are “not the same as an award of equitable monetary relief.” Second, Section 13(b), read as a whole, focuses on prospective relief as opposed to retrospective monetary relief. And third, the statute contains two other provisions that permit monetary penalties and relief subject to certain limitations. As the Court observed, it “is highly unlikely that Congress would have enacted provisions expressly authorizing conditioned and limited monetary relief if” Section 13(b) “had already implicitly allowed” the FTC “to obtain that same monetary relief and more without satisfying those conditions and limitations.”

The Court distinguished prior cases that had read other statutes more broadly, and it rejected the FTC’s alternative account of congressional intent. The Court also was unpersuaded by the argument that Congress had acquiesced in the FTC’s interpretation when revising the Federal Trade Commission Act.

Read the opinion here.