Well, the buck stops here (for now). Last week, in AMG Capital Management, LLC v. Federal Trade Commission, the Supreme Court unanimously ruled that Section 13(b) of the Federal Trade Commission (FTC) Act does not authorize the FTC to obtain equitable monetary relief such as restitution or disgorgement. This highly anticipated landmark decision reverses decades of precedent and strips the FTC of one of its key enforcement tools for obtaining consumer redress. The decision will likely represent a sea change in FTC enforcement practices.

How did we get here? In 2012, the FTC sued race car driver Scott Tucker and a payday lending company he ran, AMG Capital Management (collectively, Tucker). The FTC alleged that Tucker engaged in unfair or deceptive acts or practices in violation of Section 5 of the FTC Act by failing to clearly and conspicuously disclose that the loans issued would automatically renew, even after the customer paid off the loan, unless the customer affirmatively opted out. The FTC sued in federal district court under Section 13(b) and asked the court for restitution and disgorgement of Tucker’s ill-gotten gains in addition to injunctive relief. The court granted the FTC’s motion for summary judgment and its request for a permanent injunction and ordered the equitable monetary relief sought. Tucker appealed, arguing that Section 13(b) does not authorize the FTC to obtain the monetary relief granted because Section 13(b) only expressly authorizes the FTC to obtain injunctive relief against those who are violating or are about to violate the law. The Ninth Circuit upheld the district court’s decision, pointing to long-standing precedent giving district courts broad power “to grant any ancillary relief necessary to accomplish complete justice, including restitution.” Continue Reading