Last Thursday, in addition to agreeing to decide an issue of major significance under the Telephone Consumer Protection Act, the U.S. Supreme Court agreed to decide whether Section 13(b) of the Federal Trade Commission Act, which expressly gives the FTC authority to seek injunctive relief, also authorizes the FTC to seek monetary relief, such as restitution.

The issue is currently the subject of a circuit split and the Supreme Court granted petitions for certiorari in two cases that reached opposite conclusions.  One case is AMG Capital Management, LLC v. FTC, in which the Ninth Circuit, agreeing with six other circuits, held that by authorizing injunctive relief, Section 13(b) also allows a district court to grant ancillary relief, including monetary relief such as restitution.

The other case is FTC v. Credit Bureau Center, LLC, in which the Seventh Circuit reversed its own precedent and created the circuit split by holding that the FTC does not have authority to seek restitution under Section 13(b) because its plain terms provide solely for injunctive relief.

Following the Supreme Court’s issuance of its orders granting certiorari in the two cases, the FTC’s General Counsel issued the following statement:

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.

This case is of enormous importance to the FTC since a Supreme Court ruling that it lacks the authority to obtain any form of monetary relief would severely handicap its enforcement authority.  It already lacks the authority to obtain civil money penalties unless a party to a consent decree violates that decree.  The CFPB, on the other hand, has clear authority under the Consumer Financial Protection Act to obtain all forms of monetary relief and civil money penalties.  If the Supreme Court rejects the FTC’s position, we would expect to see more instances where the FTC collaborates with the CFPB in bringing enforcement actions against non-banks as to whom both agencies have enforcement jurisdiction.

In May 2020, we held a webinar, “Consumer Protection: What’s Happening at the FTC,” in which leaders of Ballard Spahr’s Consumer Financial Services Group were joined by special guest speakers Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, and Malini Mithal, Associate Director of the FTC’s Division of Financial Practices.  We have released a two-part podcast based on the webinar.  Click on the following links to listen to Part I and Part II.