On April 22, 2021, the U.S. Supreme Court ruled that the Federal Trade Commission (FTC) lacks authority to seek restitution or disgorgement under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), a statute that authorizes the FTC to seek injunctions in federal courts when the FTC has reason to believe the defendant is violating, or is about to violate, Section 5 of the Federal Trade Commission (FTC) Act, 15 U.S.C. § 45(a)(1).1 This decision ends — at least for now — the FTC’s decades long use of Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), as a tool for equitable monetary relief. As drafted, Section 13(b) authorizes the FTC to bring suits in federal district court to enjoin, preliminarily or permanently, activities it has reason to believe violate Section 5 of the FTC Act. Although other statutes grant the FTC authority to seek restitution, the FTC has used 13(b) as a quicker and easier tool to obtain restitution. This loss at the Supreme Court will impair the FTC’s strategy in a number of pending consumer protection and antitrust cases and will impede the FTC’s enforcement strategy going forward.
The FTC is seeking a legislative amendment to overturn the Supreme Court’s decision in AMG. But it is unclear if or when that will happen.
Sidley Austin LLP provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from professional advisers.
Attorney Advertising—Sidley Austin LLP, One South Dearborn, Chicago, IL 60603. +1 312 853 7000. Sidley and Sidley Austin refer to Sidley Austin LLP and affiliated partnerships, as explained at www.sidley.com/disclaimer.
© Sidley Austin LLP