In recent days, the ghost of cases past returns to haunt the FTC’s ability to obtain equitable monetary relief under Section 13(b) of the FTC Act. Three cases now pending Supreme Court review have the potential to significantly threaten the FTC’s enforcement authority: Liu v. SEC; FTC v. AMG Capital Management, LLC; and FTC v. Credit Bureau Center, LLC. Given the unique posture of each case, in perspective with one another, the Court has the opportunity to, at the least, provide guidance, and at most, directly decide, whether Section 13(b) allows for such relief.

The Supreme Court is set to hear oral argument on March 3, 2020 in Liu v. SEC, which will resolve whether the Securities and Exchange Commission (“SEC”) can obtain disgorgement under federal securities statutes or whether that remedy is a penalty and not an equitable remedy. Though Liu does not directly implicate Section 13(b) of the FTC Act, the securities statutes at issue are similar to Section 13(b) of the FTC Act, according to, at least, the Solicitor General of the United States.

This time last year, members of the Ninth Circuit, in a concurrence to the opinion in FTC v. AMG Capital Management, LLC, expressed concern over whether Section 13(b) of the FTC Act has been misinterpreted to allow the FTC to obtain monetary judgments. Now that the Defendants in AMG Capital Managaement, LLC filed a petition for a writ of certiorari, asking the Supreme Court to decide the question of whether Section 13(b) precludes the FTC from obtaining equitable monetary relief, the Solicitor General, acting on behalf of the FTC, took the position that this question “and the question presented in Liu overlap.” Brief for the Respondent, AMG Capital Management, LLC v. Federal Trade Commission, No. 19-508 (Dec. 13, 2019), at 7. Because of that overlap, the Solicitor General, on behalf of the FTC, sought a stay of consideration of the AMG Capital Management petition. Id. However, the next chapter in the Section 13(b) saga comes from a petition directly filed by the FTC.

Further complicating the intertwining issues presented before the Supreme Court, the FTC proceeded directly in the Supreme Court, and not through the Solicitor General, and filed a petition for a writ of certiorari in Federal Trade Commission v. Credit Bureau Center, LLC, 937 F.3d 764 (7th Cir. 2019), cert pending, No. 19-____ (filed Dec. 19, 2019). The decision below in Credit Bureau Center held that the text of Section 13(b) does not provide the FTC with equitable monetary relief, departing from precedent in other circuits and setting up a circuit split. Despite presenting the same legal question as AMG Capital Management, the FTC asked the Supreme Court for immediate review of the petition in Credit Bureau Center. Given the different positions taken by the Solicitor General and the FTC, there is at least the possibility that the Solicitor General and the FTC might take different positions on the ultimate issue. This is only the fourth time that the FTC has represented itself in the Supreme Court.

Based on these end-of-the-year updates, the Supreme Court has the opportunity to decide one and possibly three cases that could significantly limit the FTC’s enforcement authority under Section 13(b) of the FTC Act. Next year should be an interesting one. Stay tuned.

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