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The Supreme Court in AMG foreclosed the FTC’s ability to pursue monetary remedies under Section 13(b) of the FTC Act. That, however, AMG has not stopped the FTC from pursuing monetary relief directly in court, while attempting to bypass the statutory prerequisite of an administrative proceeding. The FTC is continuing to use Section 13(b) of the Act to attempt to obtain preliminary and permanent injunctive relief. At the same time, the Commission is coupling its 13(b) requests for injunctive relief with other (sometimes creative) statutory requests for money.

Given the Commission’s newfound interest in exploring non-13(b) statutory avenues to obtain monetary remedies, we have expanded our Post-AMG chart to include a wider swath of ongoing cases in which the FTC is attempting to collect money absent the use of 13(b). The latest version of our expanded chart follows.

Continue Reading Post-AMG Scorecard: The FTC Pivots to Other Statutory Bases for Monetary Relief

FTC Blankets Companies With Warning Letters Over Endorsements and ReviewsAs we have noted in earlier posts, in the wake of the Supreme Court’s holding that Section 13(b) of the FTC Act does not allow for monetary restitution, the Federal Trade Commission has been attempting to creatively utilize other provisions of the Act in order to obtain money from the companies and individuals it

It was an extraordinary week as the FTC continued to press the frontier of the post-AMG Capital Management landscape.

On Friday, the Commission, making good on promises to creatively explore all of its options for enforcement, announced by a 3-2 vote that it had reached a settlement pursuant to Section 19 of the FTC Act with Resident Home LLC and its owner Ran Reske.  At issue were allegedly false claims that the company’s imported mattresses are made from materials fully manufactured in the United States. As part of the settlement, Resident Home and Reske agreed to pay $753,000.

This action follows the FTC’s announcement earlier in the week that it had notified 70 for-profit higher educational institutions that it intends to make use of its long dormant Penalty Offense Authority.  As contemplated by the FTC, the Penalty Offense Authority would allow the Agency to obtain civil penalties when institutions make misrepresentations about their programs, and job and earnings prospects.
Continue Reading Pushing the Boundaries of Existing Authority: Section 19 Post-AMG Capital Management

As AMG recedes further into the past, lower courts are becoming more comfortable disposing of 13(b) actions where the proceedings are attempting to obtain monetary restitution as a matter of course. In many instances below, the FTC has conceded its inability to obtain monetary relief and has focused on the injunctive relief it seeks. However, there are still outstanding cases wherein, despite AMG, the FTC refuses to concede defeat on the issue of monetary relief under Section 13(b).

Latest update follows.
Continue Reading Post-AMG Scorecard (Updated): FTC Claims for Monetary Relief in 13(b) Actions Dwindle

Section 13(b)logThe ripple effects continue from the Supreme Court’s holding in AMG Capital Management, LLC v. FTC, explaining that Section 13(b) of the FTC Act does not allow (and never did allow) monetary remedies.

In some cases, the FTC has stricken equitable monetary remedies entirely by removing those requests for relief in amended complaints. In others, the FTC is attempting to retain its request for monetary relief by newly tying it to another statutory provision. In still others, the Agency has requested that courts ignore AMG, because Congress may, at some unspecified future date, amend the statute.

Latest update follows.

Continue Reading Post-AMG Scorecard (Updated): Different Roads Forward for the FTC in Pending Cases

Last Month, in AMG Capital Management, LLC v. FTC, the Supreme Court ruled that Section 13(b) of the FTC Act does not allow for monetary remedies. While the importance of this ruling is plain, its implications are only now becoming more clear.   Just yesterday, for example, in FTC v. Cardiff, a California federal court found the FTC liable to pay all of the Receiver’s fees from the date of the AMG ruling going forward. The Court explained that it would be inequitable for the defendants to pay these fees, now that the Supreme Court has clarified that the 13(b) relief provided only allowed for an injunction.

This is the first instance we know of where the FTC has been required to pay a Receiver’s fees during the pendency of a 13(b) injunction.

As we’ve discussed in earlier posts, the FTC has asked Congress to rewrite the statute in a way that would allow it to unambiguously go straight to Federal Court to obtain money judgments. For now, however, the FTC can no longer rely on Section 13(b) to provide anything other than injunctive relief.  As Cardiff illustrates, this will mean different things in the dozens of enforcement actions that are presently pending.

The following table summarizes relevant post-AMG action in these cases.  Our team will provide periodic updates.
Continue Reading Post-AMG Scorecard: The FTC is Required to Pay Receiver’s fees in Cardiff

13(b)Recently, the U.S. Chamber of Commerce published a letter to the Committee on Commerce, Science, and Transportation, the Congressional Committee currently working on draft language for a new Section 13(b) of the FTC Act. The Chamber’s letter cautions Congress to ensure that any new statutory language not give the FTC too much authority. In advocating caution, the Chamber makes an important, if subtle, point. The FTC is now arguing that the Supreme Court “took away” 13(b) powers it had before. In reality, though, the Supreme Court in AMG explained that FTC never had the power it arrogated in the first place.

The Chamber’s letter noted that the legislative history of the FTC Act requires the Commission to use Section 19’s administrative processes to obtain monetary relief for past violations. There is no reason that Congress should provide the FTC with additional powers, according to the Chamber, when the FTC already has an avenue to seek monetary relief.

The Chamber’s argument here largely mimics the position of Justice Breyer, who authored the AMG decision from a unanimous Court, concluding that the current version of 13(b) does not allow monetary relief. In AMG, Justice Breyer explained that “[t]he Commission may obtain monetary relief by first invoking its administrative procedures and then § 19’s redress provisions (which include limitations) . . . By contrast, the Commission’s broad reading would allow it to use §13(b) as a substitute for §5 and §19.”

The Chamber’s letter urged Congress not to upset the fine balance the FTC Act originally envisioned. While the Chamber agreed that the FTC should be able to go immediately to Court “to seek appropriate equitable monetary relief for clearly fraudulent cases that are found to be in violation of the law,” it explained that “[m]onetary relief should not be available for every consumer protection violation but should be reserved for the most egregious types of cases.”
Continue Reading Acting Chair Rebecca Slaughter and Chamber of Commerce Spar Over a New 13(b)

Now that the Supreme Court has decided AMG Capital Management, LLC v. Federal Trade Commission (regardless of your rooting interests, quite a day, eh?) all eyes turn toward Congress, as it considers whether to amend Section 13(b) of the FTC Act.  As we explained yesterday, in AMG, the Supreme Court definitively (9-0) held that