Antitrust Law Daily Supreme Court to consider FTC’s ability to collect monetary judgments under 13(b)
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Thursday, July 9, 2020

Supreme Court to consider FTC’s ability to collect monetary judgments under 13(b)

By Jeffrey May, J.D.

Two petitions granted review ask Court to consider circuit split over whether FTC Act, Section 13(b) includes the authority to require wrongdoers to return money that they illegally obtained.

Before heading out for its recess until the first Monday in October, the U.S. Supreme Court added two FTC cases to its docket for the October 2020 Term. The Court granted the FTC’s petition for review of a decision of the U.S. Court of Appeals in Chicago that Section 13(b) of the FTC Act authorizes only restraining orders and injunctions and not, as the FTC has long viewed it, restitution. The Court also agreed to consider the FTC’s ability to collect monetary relief under Section 13(b) in connection with a decision of the U.S. Court of Appeals in San Francisco, upholding an award of equitable monetary relief. The cases were consolidated for briefing and oral argument (FTC v. Credit Bureau Center, LLC, Dkt. No. 19-825; AMG Capital Management, LLC v. FTC, Dkt. 19-508).

In its petition for review of the Seventh Circuit decision, the FTC contended that the decision "threatens the FTC’s ability to carry out its mission by eliminating one of its most important and effective enforcement tools." According to the FTC, the Seventh Circuit decision conflicts with the holdings of seven courts of appeals that district may enter an injunction that requires defendants in FTC actions to return to the victims of their wrongdoing funds obtained through their illegal activity. The agency noted that until this recent Seventh Circuit decision, the courts of appeals (including the Seventh Circuit) had uniformly held for more than 35 years that a district court’s authority to grant a permanent injunction under Section 13(b) included the authority to require wrongdoers to return money that they illegally obtained. The Court rejected a conditional cross petition for writ of certiorari from the defendants in the case.

The Ninth Circuit decision to be considered by the Court came into question following the creation of the circuit split. The petitioners in that case pointed out that two of the three panel members joined a special concurrence to urge that the Ninth Circuit’s "interpretation" of Section 13(b) as authorizing monetary relief is "no longer tenable" and "wrongly authorizes" the Commission to wield "a power that the statute does not permit."

Not included in the Order List was the fate of a petition for review of another Ninth Circuit decision that questions Section 13(b) authority. In that petition, Publishers Business Services pointed to the plain text of the FTC Act’s injunction statute which excludes implied remedies for monetary relief. The government reiterated in its response brief that the Ninth Circuit’s history of acknowledging that FTC Act Section 13(b) includes the authority to award restitution and monetary relief. At issue is a decision of the U.S. Court of Appeals in San Francisco, affirming a judgment against the defendants (Publishers Business Services, Inc. v. FTC, Dkt. 19-507).

FTC reaction. In response to the Court’s decision to take up the issue, FTC General Counsel Alden F. Abbott said: "We look forward to proving to the Supreme Court that the FTC Act empowers us to fully protect consumers by ensuring that money unlawfully taken from them is rightfully returned."

Attorneys: Neal Kumar Katyal (Hogan Lovells US LLP) and Stephen R. Cochell (Cochell Law Firm, P.C.) for Credit Bureau Center, LLC. Paul C. Ray (Paul C. Ray, Chtd.) and Jeffrey A. Lamken (MoloLamken LLP) for AMG Capital Management, LLC. Peter Winslow Homer (Homer Bonner Jacobs PA) for Publishers Business Services, Inc. Alden Francis Abbott for FTC.

Companies: AMG Capital Management, LLC; Credit Bureau Center, LLC; Publishers Business Services, Inc.

MainStory: TopStory ConsumerProtection FederalTradeCommissionNews

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