Two weeks ago, the Supreme Court handed down its opinion in Liu v. SEC where it limited the SEC’s disgorgement authority to net profits returned to investors. Today, the Supreme Court granted certiorari in two FTC cases to decide whether Section 13(b) of the FTC Act providing for “injunctive relief” includes the authority to obtain “equitable monetary relief” in the form of disgorgement.
In the first of the two cases, AMG Capital Management v. FTC, the Ninth Circuit’s decision determined below that injunctive relief includes all of the ancillary equitable powers vested in the courts to order equitable monetary relief, including disgorgement. Most notably, Judge O’Scannlain and Judge Bea concurred with the Ninth Circuit’s decision to call into question the prior decisions the majority relied on in so ruling. In stark contrast, the Seventh Circuit in FTC v. Credit Bureau Center overturned its past precedent and determined that, by the express terms of Section 13(b), Congress only authorized restraining orders and injunctions, and thus it did not authorize the FTC to seek equitable monetary relief such as disgorgement. Another wrinkle to the contrast between these two cases is the dynamic between the FTC and the Solicitor General. As we’ve blogged about before, the Solicitor General is representing the FTC in AMG, but declined to take the case in Credit Bureau Center where the FTC appeared on its own behalf. Such a dynamic may lead to a divergence in the positions taken by the FTC and the Solicitor General office.
Though we’ve hinted before these cases could have a significant impact on the amount of monetary relief the FTC is entitled to seek (if at all), these cases will definitively decide whether the FTC is entitled to seek such relief. Because the Court has consolidated these cases, the Court has extended the time for oral argument to one hour. As the briefings in these cases are submitted and an oral argument date is set, we will continue to monitor and blog on future developments.