A key source of the Federal Trade Commission’s ability to obtain monetary relief in district court is in jeopardy. The Supreme Court recently heard arguments in AMG Capital Management, LLC v. FTC, a challenge to the FTC’s authority to obtain equitable monetary relief under Section 13(b) of the FTC Act. The decision could have broad implications for the FTC’s enforcement program because 13(b) is by far the commission’s most frequently used mechanism for seeking monetary relief in consumer protection cases—especially in those alleging fraud. At oral argument, the Supreme Court seemed inclined to limit the relief available under 13(b) to non-monetary injunctions.

At the same time, a complementary challenge to FTC authority is brewing in lower courts. One circuit has adopted a limited construction of the commission’s ability to obtain even injunctive relief, finding an injunction appropriate under 13(b) only if the alleged violation is ongoing or “impending.” If adopted more widely, this view could impact many FTC enforcement actions outside of the hard-core fraud area, given that non-fraud targets of FTC investigations often tend to cure their alleged violations while the investigation is pending.

Click here to read the full article, which was published in the April 2021 edition of The Antitrust Source.