For years, pursuant to Section 13(b) of the FTC Act, the FTC has been able to pursue violators in court for permanent injunctive relief as well as restitution or disgorgement. However, a question arose as to whether Section 13(b) actually allows a federal Court to award equitable monetary relief of this nature.
Yesterday, the Supreme Court answered the question in the case of AMG Capital Management, LLC v. FTC. The FTC may not seek restitution or disgorgement under Section 13(b) of the FTC Act.
While the FTC may still seek monetary relief after it has engaged in administrative proceedings and issued cease and desist orders, this ruling is a significant blow to its enforcement powers. Administrative proceedings typically take longer and are more cumbersome. Restitution and disgorgement under Section 13(b) were effective tools that I used at the FTC to address consumer fraud.
It will be interesting to see how this ruling affects the FTC’s approach as to future consumer protection matters.
