Post-AMG Scorecard (Updated): FTC Claims for Monetary Relief in 13(b) Actions Dwindle

The pending Ninth Circuit appeal was held in abeyance pending AMG’s outcome. Following the AMG decision, the parties filed supplemental briefs regarding how the appeal should proceed. Both the FTC and defendants conceded that the monetary judgment under 13(b) should be vacated. The FTC argued AMG has no other effect; defendants disagree. The appeal remains pending and oral arguments scheduled for June 9, 2021 were cancelled. The Ninth Cir. noted that the issue was adequately presented in the briefs and oral argument would not significantly aid the decisional process.

On June 11, 2021, the Ninth Circuit vacated the district court’s judgment granting monetary relief in light of AMG.

On April 30, defendants filed a notice of supplemental authority notifying the court of the AMG decision, and arguing that significant portions of the FTC’s complaint should be stricken. On May 17, 2021, defendants filed their answers to the (pre-AMG) complaint, making the same requests.

On June 24, 2021, American Future filed a motion for judgment on the pleadings, to which the FTC filed a response in opposition on July 7, 2021. American Future raised the issue that the Supreme Court’s ruling in AMG bars the FTC from monetary damages in this case, and that the FTC improperly invoked Section 13(b) of the FTC Act to evade the administrative procedures established by Section 19 of the FTC Act. In its opposition, the FTC notes that “the FTC has already ceased its pursuit of monetary relief in this matter.”

American Future filed its response in support of its motion on July 8, 2021. On July 26, 2021, the Court issued an Order denying Defendants’ motion for judgment on the pleadings, noting that AMG Capital does not “Preclude FTC’s Section 13(b) Claims for Permanent Injunctive Relief.”

On June 8, 2021, the 9th Circuit vacated its December 3, 2018 order and reversed the district court’s order awarding equitable monetary relief to the FTC. The 9th Circuit then remanded the case to the district court for further proceedings consistent with the Supreme Court’s opinion.

On July 13, 2021, a status conference was held in the District Court. The Court indicated that it intends to issue an order terminating the asset freeze.

On April 28, in a brief, three-paragraph order, a per curiam panel vacated the district court’s preliminary injunction order that had been entered into “to preserve assets pending a final judgment that could include equitable monetary relief in this action under § 13(b) of the FTC.” Given AMG, the panel explained that the injunction was no longer necessary, and remanded the case to the district court.

Before the district court, the parties filed expedited briefing regarding the import of AMG on the FTC’s complaint, with the FTC arguing it can obtain monetary redress by way of ROSCA. Defendants argued that the FTC had always been seeking monetary relief under 13(b), and cannot change its position now.

On May 24, 2021, the District Court ordered the FTC to pay the Receiver’s fees, from the date of the AMG ruling going forward. The Court explained that it would be inequitable to force defendants to pay these fees now that the Supreme Court has established that 13(b) does not allow for monetary relief.

On May 26, 2021, the District Court noted that it had to rule on the effect of AMG on the 2018 preliminary injunction and what remedies remain. This issue is fully briefed, but no order has yet issued.

On June 29, 2021, the District Court issued an Order, granting summary judgment, barring the FTC from recalculating and modifying how it would seek damages, if initially, it had sought monetary relief under Section 13(b). The FTC attempted to recover monetary penalties under a separate statutory provision. While the court agreed with the FTC that it could have pursued monetary relief under an alternative statute, the FTC had waived the right to request such relief in this case, largely because in the FTC’s Rule 26 disclosures, the FTC had only calculated damages under 13(b).

On May 6, 2021, the FTC filed a Motion to Amend Judgment. The FTC claims it now seeks monetary relief under ROSCA and Section 19 of the FTC Act, as opposed to Section 13(b). The defendant filed their response on May 28, 2021 calling the FTC’s motion a “desperate attempt to overturn AMG.”

On June 11, 2021, the FTC filed their reply, stating that ROSCA and Section 19 provide an independent statutory basis apart from 13(b) to obtain a monetary judgment.

On June 23, 2021, the court set an oral argument for July 14, 2021 on the FTC’s motion to alter judgment. No order has yet been issued.

Following AMG the parties stipulated, and on May 18, 2021 the Court issued an order, “dissolving the asset freeze entered in the Court’s October 6, 2020 Ex Parte Temporary Restraining Order.”

On June 24, 2021, the FTC moved for summary judgment and a permanent injunction against Marc Grisham, but did not seek damages for violations of 13(b). On the same day, the FTC also moved for default judgment and a permanent injunction against the “defaulting defendants.” The defendants opposed the motions. No order has yet been issued.

On April 26, 2021, defendants asked the Court in a Motion for Reconsideration “to reconsider its denial of [the] motion to dismiss the FTC’s monetary claim [] for consumer redress, disgorgement and restitution as set forth in the FTC’s first amended complaint.”

On May 3, 2021, the FTC filed a Motion to Withdraw the pending Summary Judgment Motion, requesting the Court provide monetary relief through 13(b), due to AMG.

On May 10, 2021, defendants filed a Motion for Reconsideration of the denial for a Judgment of the Pleadings based on the new authority provided by AMG. At a status conference on June 14, 2021, the judge ordered the FTC to file a response to this motion.

On July 2, 2021, the FTC filed a response in opposition to the motion for reconsideration. In its response, the FTC notes that “[a]lthough the FTC concedes that AMG precludes its recovery of equitable monetary relief in this action, the language of AMG itself, as well as subsequent authority, make clear that the FTC is still entitled to injunctive relief …”

On July 21, 2021, the Court issued an Order noting that the motion for summary judgment “will be dealt with in due course.”

While Ninth Circuit briefs had already been filed prior to AMG, the Ninth Circuit is requiring new briefing following AMG. Appellants filed their revised brief on June 1, 2021 in which they argue that the FTC does not have the authority to impose some of the remedies that the FTC has imposed.

On July 30, 2021, the FTC filed its Answering Brief. For AMG related issues, the FTC argued that for a permanent injunction, it did not need to file an administrative complaint seeking the same relief, and that the court did not abuse its discretion in issuing an injunction. The FTC conceded that “the Supreme Court’s recent decision in AMG, holding that Section 13(b) does not authorize monetary relief, does not undermine this longstanding precedent regarding the availability of injunctive relief.”

In a May 11, 2021 status report, the defendants stated their intent to file a dispositive motion striking the FTC’s claim for monetary relief following AMG.

On May 20, 2021, the District Court stayed dispositive motions pending a settlement conference. On July 1, 2021, the stay was lifted.

On April 27, 2021, Facebook filed a notice of supplemental authority regarding AMG, arguing that, following the Supreme Court’s decision “the FTC lacks statutory authority to maintain its lawsuit in federal district court.”

On May 3, 2021, the FTC filed a Response. The FTC’s response argues that the action is still appropriate because, the FTC asserts, Section 13(b) still empowers the FTC to seek a permanent injunction.” Of course, the statutory text only speaks of preliminary injunctive relief.

On June 28, 2021 the court granted Facebook’s motion to dismiss and dismissed the complaint without prejudice. Section 13(b) was not a basis of the motion to dismiss, but the court did note that “an injunction under Section 13(b) is a theoretically available remedy in a Section 2 challenge to long-ago mergers…”

On July 23, 2021, the Court granted the FTC’s motion for an extension of time to file an Amended Complaint, which is due to be filed before August 19, 2021.

On May 17, 2021, defendants filed a partial motion for summary judgment, asserting that, following AMG, “the FTC is not entitled to relief on its claim for equitable monetary relief, and [] the FTC is not entitled to relief on its claim for prospective injunctive relief.”

On June 18, 2021, the FTC filed its reply in support of its motion for summary judgment and opposition to defendant’s cross-motion for summary judgment. In the reply, the FTC does not seek monetary relief, only injunctive relief.

On July 12, 2021, Defendants filed their reply brief, arguing that the FTC is not entitled to injunctive relief that that the FTC lacks authority to enjoin past conduct. No order has been issued.

FTC v. Golden Sunrise Nutraceutical, Inc., No. 20-cv-01060 (E.D. Cal.)

On April 22, 2021, the FTC filed a Notice with the Court of the AMG decision.

On June 21, 2021, the court terminated without prejudice the motions for summary judgment.

On July 2, 2021, the FTC filed a notice of supplemental authority re AMG, noting that “the FTC hereby provides notice to the Court and Defendants that it is not currently seeking equitable monetary relief under Section 13(b) of the FTC Act as to any defendant in this matter. However, the FTC continues to seek injunctive conduct relief under Section 13(b), as well as equitable monetary relief under Section 19…”

Motions for summary judgment are to be filed before August 10, 2021.

There is a motion to lift the asset freeze pending due to AMG. On May 21, 2021, defendants filed a motion entitled “The Effect of AMG Capital on This Case.” In the filing, defendants stated, “The FTC’s wanton approach and this court’s complaisance approach has resulted in an illegal prejudgment attachment and dissipation of assets under the guise of equity. But it is a farce. This court was duped. The FTC’s unclean hands entitles it to nothing. Its complaint should be dismissed.”

On May 28, 2021, the FTC filed a response to defendant’s memo calling it a “fanciful reading of AMG . . . untethered from its holding.”

On June 1, 2021, proposed intervenors, who had previously been denied intervention, filed a motion to intervene saying they have been harmed by the FTCs unlawful reading of 13(b) as held by AMG and should thus be allowed to intervene. The FTC responded on June 4, 2021 calling the motion untimely and calls AMG “irrelevant” to the court’s prior ruling. On June 14, 2021, the proposed intervenors filed a reply reiterating that their motion is timely and that they are affected by the holding in AMG.

On June 11, 2021, Defendants filed a Reply in Response to the Motion for Preliminary Injunction, noting that “Section 13 has always been the FTC’s focus in this case, even though this court recognized the FTC sought relief not found in the text of the FTCA.”

On June 15, 2021, the Court issued an Order: “in the wake of the Supreme Court’s decision in AMG […], the Court issued an order requiring the parties to file a joint memorandum setting forth their views on ‘whether the asset freeze and receivership in this action should be modified or vacated in light of AMG Capital.’ After the parties filed their joint memorandum …, the Court held a hearing. IT IS SO ORDERED that the Court will take no action in response to the individual Defendants’ memorandum.”

On June 23, 2021, the FTC filed a motion for summary judgment as to monetary remedies. The FTC did not base this motion on 13(b). A telephonic status conference was held on July 7, 2021.

On June 30, 2021, defendants filed a Motion to Dismiss Case, Motion to Dissolve the Preliminary Injunction Order and Motion to Stay or Dismiss Section 13(b) Proceedings. Defendants argue that the FTC must first file an administrative complaint before seeking a TRO or preliminary injunction.

Following AMG the parties stipulated, and on May 14, 2021 the Magistrate Judge ordered, “that the demand for equitable

monetary relief in the FTC’s First Amended Complaint should be stricken.”

On June 10, 2021, the parties filed a case management statement in which they agreed that settlement discussions would now be more “fruitful” based on AMG’s holding. On July 7, 2021, the Court was notified that the parties “settled the case subject to the contingency of approval of the Commission.”

On April 30, 2021, the FTC filed a Notice of Supplemental Authority informing the Court that, per AMG, 13(b) does not allow for monetary relief.

On May 10, 2021, the FTC and defendants filed dueling statements contesting the breadth of AMG’s repercussions.

On May 17, 2021, the defendants filed a Motion for Judgment on the Pleadings, arguing that the FTC cannot prevail now that it cannot obtain 13(b) monetary relief. That Motion is pending.

On June 7, 2021, the FTC filed their response to the May 17th Motion, arguing that AMG only applies to a very narrow issue, and that Neora is trying to use the ruling to dismiss the entire case, when 13(b) still allows the FTC to bring cases in federal court to obtain injunctive relief. The FTC accused Neora of “doing violence to the language of the Supreme Court’s decision.” The FTC did agree to dismiss the claims for monetary restitution and disgorgement, directly acknowledging that AMG “currently prevents the FTC from recovering equitable monetary relief under Section 13(b) in this case.”

On June 14, 2021, defendants filed a Motion for a Protective Order and a Motion to Quash a Subpoena, arguing that per the holding in AMG, the FTC cannot look at past conduct and prescribe retrospective relief, they can only provide relief for future actions.

On June 29, 2021, the Court set the motion hearing for judgment on the pleadings for July 16, 2021.

On July 1, 2021, defendants filed a notice of supplemental authority, noting that the United States District Court for the District of Columbia in FTC v. Facebook, Inc., held that the FTC may not seek injunctive relief in federal courts under Section 13(b) of the FTC Act for long-past conduct without some evidence that the defendant is committing or is about to commit another violation.

On August 2, 2021, the Court issued an Order on the Motion for Judgment on the Pleadings. The motion was granted in part and denied in part. The Court noted, “in light of the unambiguous pronouncement from the Supreme Court in AMG Capital regarding the unavailability of monetary relief under § 13(b), Defendants’ Motion as to FTC’s claim for monetary relief is granted. The remainder of Defendants’ Motion is denied.” The Court was not persuaded that the FTC needed to file an administrative proceeding before obtaining a preliminary injunction.

On May 5, 2021, the defendants filed a partial Summary Judgment Motion in light of AMG. The defendants asked the court to rule that the FTC “is not entitled to equitable monetary relief under Section 13(b) of the FTC Act.” The motion remains pending.

On June 2, 2021, the FTC filed a non-opposition response to Nudge’s May 5th Motion for partial summary judgment, noting that it does not oppose Nudge’s Motion “to the extent it requests ‘an order stating that the FTC is not entitled to any equitable monetary relief under Section 13(b)’ of the FTC Act.” The hearing on the motions was held on July 9, 2021. FTC’s motion for partial summary judgment and the cross motion for partial summary judgment by defendants were both denied.

On July 26, 2021, the Court issued an Order denying the Motion to Dismiss for failure to state a claim, nothing that the complaint adequately alleges a Telemarketing and Consumer Fraud and Abuse Prevention Act claim. The Order makes no mention of Section 13(b).

The case was remanded from the Supreme Court to the Ninth Circuit in light of AMG. The case is currently pending before the Ninth Circuit.

On June 4, 2021, the FTC sent a letter to the 9th Circuit explaining that it sought money under Section 19 as well as Section 13(b), so AMG does not affect them and that Publishers Business Services already waived their 13(b) challenge. On June 9, 2021, defendants responded saying they did not waive this claim and argued that the FTC actually waived any §19 claim because they stopped arguing that.

On June 10, 2021, the 9th Circuit affirmed the District Court’s order that granted the permanent injunction, and vacated the District Court’s order that awarded equitable monetary relief under Section 13(b).

On April 27, 2021, defendants filed a letter requesting “a pre-motion conference concerning Defendants’ anticipated motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) dismissing with prejudice plaintiff the [FTC’s] request for monetary relief.”

On May 10, 2021, the FTC filed a response, claiming that judgment on the pleadings would be premature, because “Congress is considering changes to the Federal Trade Commission Act in response to AMG Capital.”

On May 11, 2021, defendants filed a reply, explaining that the FTC’s “speculative hope that the House and Senate may agree upon and pass legislation, at some unspecified future time” is an insufficient basis to delay ruling.

The parties stipulated to allow the FTC to amend its complaint shortly following AMG, presumably so the FTC could include an alternative basis for monetary relief. The district court granted the FTC’s request on May 18.

On May 19, the FTC filed an Amended Complaint, striking all requests for 13(b) monetary relief, and instead requesting monetary relief pursuant to the FTC’s Trade Regulation Rule Concerning the Sale of Mail, Internet, or Telephone Order Merchandise (“MITOR”).

On June 23, 2021, Defendants filed a motion to dismiss each of the FTC’s claims, stating: “On April 22, 2021, the Supreme Court published AMG …, which significantly limits the FTC’s ability to obtain damages. Defendants move to dismiss all the FTC’s claims on the grounds that (1) the FTC is not entitled to monetary relief…”

FTC v. Ragingbull.com, LLC, No. 20-cv-3538 (D. Md.)

The FTC filed a motion to stay the case in order to obtain approval to file an Amended Complaint, in order to file new claims to stand in for the current 13(b) claims. That motion was granted on April 30.

On May 18, in a related filing, the FTC conceded that it chose to voluntary dismiss a number of defendants because the “FTC no longer has the ability to recover those assets as equitable monetary relief under Section 13(b) of the FTC Act, due to the Supreme Court’s decision in AMG.”

On June 11, 2021, the FTC filed a motion for leave to file an amended complaint. This amended complaint could “remove the FTC’s request for equitable monetary relief under Section 13(b) of the FTC Act, in light of the Supreme Court’s recent decision in AMG Capital…” Responses in opposition and replies by the FTC have been filed. That motion is still pending and an amended complaint has not yet been filed.

On May 10, 2021, the defendants wrote to the Court requesting the Court set a settlement conference in light of AMG. Defendants averred that as part of a settlement, they “will agree to the issuance of a permanent injunction preventing any future violations of the FTC Act as well as paying the amount of all costs accrued in favor of the Plaintiff to date.”

On May 11, 2021, the FTC filed a responsive letter, stating its intention to file an Amended Complaint replacing the prior requested 13(b) monetary relief with a new “claim and seek civil penalties for Defendants’ violations of Section 521 of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6821.”

On May 14, 2021, the FTC filed a Motion for Leave to file the aforementioned Amended Complaint.

On June 10, 2021, the FTC filed an Amended Complaint where it seeks to bring monetary penalties and a permanent injunction under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a), and 57b, and Section 522(a) of the Gramm-Leach-Bliley Act, 15 U.S.C. §6822(a).

On June 18, 2021, defendant Ram Capital Funding, LLC, filed its Answer to the Amended Complaint. On June 23, 2021, RCG Advances, LLC and other defendants filed their Answer to the Amended Complaint.

On July 8, 2021, the FTC filed a motion to strike defendants’ affirmative defenses.

On April 22, 2021, one of the individual defendants filed an Emergency Motion to Dissolve the Preliminary Injunction, due to the Supreme Court’s ruling in AMG. The defendant followed up with two notices of supplemental authority, on April 28 and 30, referencing other lower court cases dissolving preliminary injunctions following AMG.

The FTC filed a response to the Motion on April 30, 2021, arguing that the Motion was not ripe and that the FTC still had Section 19 authority.

A hearing on the Motion took place on May 14, 2021. The Motion remains pending.

On June 10, 2021, defendants filed a response to an order of supplemental briefing regarding AMG and their April 22 Motion to Dissolve. They argued that the situation in AMG is analogous to their situation. The FTC also filed its response, in which it argued that the Agency retains the power to issue preliminary injunctive relief under Section 19 of the Act.

On May 14, 2021, the defendants filed a Motion to Dismiss the FTC’s claims for equitable monetary relief, due to AMG. The Motion remains pending.

On May 24, 2021, the FTC filed a response to the Motion to Dismiss, in which the FTC states: “In AMG, the U.S. Supreme Court addressed the narrow question of whether Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), authorized retrospective monetary relief. The Court held that Section 13(b) did not authorize such relief. Slip op. at 1, 14. At this time, in light of the AMG decision, the FTC does not seek such relief.”

On May 26, 2021 the court granted SPM’s Motion to Dismiss on all parts relating to AMG.

On June 2, 2021, the FTC filed its First Amended Complaint for permanent injunction and other equitable relief., but kept their claim under Section 13(b).

On June 2, 2021, the FTC filed an Amended Complaint. In the Amended Complaint, the FTC asks only for injunctive relief under Section 13(b).

On June 16, 2021, defendant filed its Answer and affirmative defenses to the Amended Complaint. The FTC notes that it brought claims under other statutes, which entitle it to relief.

FTC v. Supergooddeals.com, Inc., No. 20-cv-3027 (E.D.N.Y.)

FTC v. Superior Products International II, Inc., No. 20-cv-2366 (D. Kans.)

On May 6, 2021, defendants filed a motion to dismiss FTC’s request for equitable monetary relief in light of AMG.

On May 10, 2021, the FTC withdrew its request for equitable monetary relief, and informed the Court of its intent to seek leave to file an Amended Complaint seeking monetary relief on other grounds.

On June 9, 2021, the Court found the defendants’ motion to dismiss moot due to the FTC’s withdrawal of claims regarding monetary relief under 13(b).

On June 22, the FTC filed a motion and memorandum in support of its motion for leave to Amend Complaint. Oral argument on the motion for leave to Amend Complaint is set for August 23, 2021. The proposed Amended Complaint includes allegations under multiple federal statutes (not only 13(b)), and the FTC still seeks monetary relief.