FTC UPDATE: SCOTUS TO DECIDE AGENCY’S MONETARY RESTITUTION ENFORCEMENT AUTHORITY

[RichardNewman]

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The Supreme Court has started its new term. FTC defense practitioners are watching closely as the Court is considering issues that may dramatically impact FTC CID investigations and enforcement actions, particularly whether Section 13(b) of the FTC Act impliedly authorizes courts to award the FTC equitable monetary relief.

The Supreme Court Has Already Limited Disgorgement Authority ​

As blogged about here, here, here and here, the Supreme Court (Liu v. SEC) recently upheld the Securities and Exchange Commission’s disgorgement authority but imposed certain limits, including the deduction of legitimate business expenses in the monetary award calculation process and a requirement that disgorged funds be returned to directly investors. The Liu court also questioned the imposition of “joint-and-several liability.” Each alone is significant. Together, potentially devastating to the FTC’s mission.

Deepening Circuit Splits With Respect to the FTC and the Breadth of Section 13(b) ​

In the context of the Federal Trade Commission, the Ninth Circuit (AMG Capital Management v. FTC) has held that courts’ equitable powers include awarding equitable monetary relief, including disgorgement. In stark contrast, the Third Circuit (FTC v. AbbVie Inc. et al.) and Seventh Circuit (FTC v. Credit Bureau Center)