The Seventh Circuit has once again weighed in on the scope of the Federal Trade Commission’s (FTC’s) remedial authority. The case, FTC v. Credit Bureau Center, LLC, has had, in the words of the court, “a long and winding journey through the federal courts, including a trip to the Supreme Court and back.” Last week’s decision focused on monetary relief under Section 19 of the FTC Act—specifically, on how to calculate redress under Section 19 and whether monetary relief imposed under Section 19 can be deposited into the U.S. Treasury as disgorgement.

The lower court entered a judgment of $5,260,671.36, which equaled Credit Bureau Center’s total revenues minus refunds already paid and chargebacks. On appeal, Credit Bureau Center argued that a monetary award under Section 19 must be limited to net profits that can be traced to the underlying fraud (as opposed to net revenues). Credit Bureau Center relied on Liu v. SEC, 140 S. Ct. 1936 (2020), in which the Supreme Court found that a disgorgement award could not exceed a firm’s net profits from wrongdoing. The Seventh Circuit rejected this because Section 19—unlike the statute at issue in Liu—explicitly permits the refund of money to make consumers whole, and, therefore, relief under Section 19 is not limited to the traditional scope of remedies available in equity. 

Accordingly, the Seventh Circuit upheld the judgment amount imposed by the district court. It did, however, strike language in the judgment that directed the FTC to deposit any excess money not used for consumer redress with the U.S. Treasury as disgorgement because, as the FTC conceded, such disgorgement exceeds the statute’s authority.

As the FTC’s post-AMG lawsuits wind their way through litigation, courts continue to provide additional clarity and nuanced interpretations of the FTC’s ability to seek monetary relief from parties.   

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Alexandra Megaris

Alex Megaris focuses on complex regulatory investigations and government enforcement matters involving state attorneys general, the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), state regulatory agencies, and the U.S. Congress. Alex also works closely with Venable’s government affairs team in…

Alex Megaris focuses on complex regulatory investigations and government enforcement matters involving state attorneys general, the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), state regulatory agencies, and the U.S. Congress. Alex also works closely with Venable’s government affairs team in advocating for clients before these agencies. She has extensive experience with consumer protection laws, such as state unfair, deceptive and abusive practices (UDAAP) laws, the FTC Act, the Consumer Financial Protection Act, the FTC’s Telemarketing Sales Rule, and product-specific regulations, including those regulating credit reporting, loan servicing, and debt collection.

Photo of Leonard L. Gordon Leonard L. Gordon

Len Gordon, chair of Venable’s Advertising and Marketing Group, is a skilled litigator who leverages his significant experience working for the Federal Trade Commission (FTC) to help protect his clients’ interests and guide their business activity. Len regularly represents companies and individuals in…

Len Gordon, chair of Venable’s Advertising and Marketing Group, is a skilled litigator who leverages his significant experience working for the Federal Trade Commission (FTC) to help protect his clients’ interests and guide their business activity. Len regularly represents companies and individuals in investigations and litigation with the FTC, state attorneys general, the Department of Justice (DOJ), and the Consumer Financial Protection Bureau (CFPB). Len also represents clients in business-to-business and class action litigation involving both consumer protection and antitrust issues. He also counsels clients on antitrust, advertising, and marketing compliance issues.