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 before an agency in-house administrative law judge.
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