Justices Considered Whether Certain Court-Imposed Monetary Remedies Are Legal
On Wednesday, January 13, 2021, the U.S. Supreme Court heard arguments in the much-anticipated case of AMG v. FTC, which challenges the Federal Trade Commission's (FTC's) authority to obtain monetary relief in court under Section 13(b) of the FTC Act. The Court's decision is likely to have a significant impact on the relief the FTC is able to obtain in federal court proceedings.
Petitioners AMG seek to overturn the Ninth Circuit's award of monetary relief under Section 13(b). Judge O'Scannlain argued that although the panel was compelled to follow longstanding circuit precedent and award money, the statute's reference to "injunction" should not in fact be read to authorize monetary judgments.1 The challenge reached the high court just as the Seventh Circuit reversed itself, broke with other circuits, and held that the FTC had no such authority.2 Then, after briefing in AMG was underway, the Third Circuit commended the Seventh Circuit's decision as "thorough and well-reasoned."3 At oral argument on Wednesday, most justices appeared likely to agree.
It should be noted that the case does not challenge the FTC's authority to obtain monetary relief through its own administrative processes. Under Section 5 of the FTC Act, the FTC may ultimately obtain monetary relief, but usually not on the first offense. Instead, Section 19 gives the FTC the ability to obtain monetary relief, but only after obtaining a final cease-and-desist order after the administrative litigation process is completed and only after demonstrating that "a reasonable man would have known under the circumstances [that the conduct] was dishonest or fraudulent." Thus, the FTC has strongly favored Section 13(b) actions. At oral argument, the FTC conceded that going directly to court is "more attractive in certain instances," and that the commission brings "far more [consumer protection] cases" in court than through its own administrative proceedings.
By its text, Section 13(b) allows the FTC to seek a "permanent injunction" but does not mention other equitable or monetary relief. Nevertheless, the commission has long brought successful actions for monetary relief under the theory that restitution is an ancillary equitable remedy. AMG thus presents a question of statutory interpretation that turns on text and history. Justice Roberts set the scene, noting that the Court has transitioned to a more "disciplined" textual...
