In AMG v. FTC, the Supreme Court undercut FTC’s privacy enforcement capability with its holding that “Section 13(b) [of the Federal Trade Commission Act] does not authorize the Commission to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.”
The Court cited the differing appellate court interpretations of relief available under Section 13(b) in granting cert to the question presented.
Background of FTC Monetary Relief
The key administrative enforcement history is summarized by the Court as follows (emphasis added):
In the 1970s Congress authorized the Commission to seek additional remedies in court. In 1973 Congress added §13(b), the provision at issue here. That provision permits the Commission to proceed directly to court (prior to issuing a cease and desist order) to obtain a “temporary restraining order or a preliminary injunction,” and also allows the Commission, “in proper cases,” to obtain a court-ordered “permanent injunction.” 15 U. S. C. §53(b). In the same legislation, Congress also amended §5(l) of the Act to authorize district courts to award civil penalties against respondents who violate final cease and desist orders, and to “grant mandatory injunctions and such other and further equitable relief as they deem appropriate in the enforcement of such final orders of the Commission.” §45(l). Two years later, Congress enacted §19 of the Act, which authorizes district courts to grant “such relief as the court finds necessary to redress injury to consumers,” including through the “refund of money or return of property.” §57b(b). However, Congress specified that the consumer redress available under §19 could be sought only (as relevant here, and subject to various conditions and limitations) against those who have “engage[d] in any unfair or deceptive act or practice . . . with respect to which the Commission has issued a final cease and desist order which is applicable to such person.” §57b(a)(2).
Unfortunately, the Commission’s use of the “permanent injunction” language of 13(b) led to a procedural end-run around the administrative proceeding requirements in the statute. Many lower courts adopted this presumed authority and the practice became a relatively common one in recent decades.
The Court recognized the procedural pain that it is forcing on the FTC by sticking to the letter of the law. However, the 9-0 vote makes it clear that this is the only way forward.
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Our task here is not to decide whether this substitution of §13(b) for the administrative procedure contained in §5 and the consumer redress available under §19 is desirable. Rather, it is to answer a more purely legal question: Did Congress, by enacting §13(b)’s words, “permanent injunction,” grant the Commission authority to obtain monetary relief directly from courts, thereby effectively bypassing the process set forth in §5 and §19?
13(b)’s Neutered Aftermath
After the ruling, the FTC’s Acting Chairwoman, Rebecca Kelly Slaughter, pleaded with Congress to give the Commission more authority in consumer protection enforcement actions, “With this ruling, the Court has deprived the FTC of the strongest tool we had to help consumers when they need it most. We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”
As with other consumer protection actions, Section 13(b) has been a critical statute under which the FTC policed privacy and data security practices. With the sustained absence of any comprehensive federal legislation in the United States, monetary relief under Section 13(b) is a tool that the FTC desperately needs access to.
House Bill 2668 FTW?
On April 20, 2021, Representative Tony Cárdenas introduced HR 2668 “To amend the Federal Trade Commission Act to affirmatively confirm the authority of the Federal Trade Commission to seek permanent injunctions and other equitable relief for violations of any provision of law enforced by the Commission.” It is currently under consideration by the House Consumer Protection and Commerce Committed. The full text of HR 2668 is not yet available at the time of this posting.
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