Last week two different bills were noticed by the House of Representatives that would provide additional remedial tools to the FTC to restore or replace some of what the agency lost when the Supreme Court struck down the agency’s ability to obtain equitable monetary relief under Section 13(b) of the FTC. Whether any of these
Last week, the Supreme Court heard oral argument in AMG Capital Management v. FTC. As we’ve previously discussed, the Supreme Court is set to decide whether Section 13(b) of the FTC Act, which expressly grants the FTC the right to obtain “a permanent injunction,” also grants the FTC the authority to obtain “equitable monetary relief.” During oral argument, certain Justices expressed doubt that the plain language of Section 13(b), when viewed in the context of the entirety of the FTC Act, authorized the FTC to obtain “equitable monetary relief” when proceeding under Section 13(b). While none of us can predict the future, after last Wednesday’s oral argument, we can’t help but wonder: What will happen if the FTC loses? Below, we have outlined the potential avenues for the FTC if the decision doesn’t go its way.
First, Congress could revise the language of Section 13(b) to allow the FTC to seek equitable monetary relief, a request the FTC made in October 2020. There’s precedent for such a move. After the Supreme Court significantly curtailed the SEC’s calculation of equitable monetary relief in Liu, Congress codified the SEC’s authority to seek disgorgement in federal district court as part of the 60th annual National Defense Authorization Act in January 2021, by amending the Securities Exchange Act of 1934. Congress could pass a similar amendment to the FTC Act to unambiguously allow the FTC to obtain equitable monetary relief under Section 13(b) or otherwise. Whether that potential authority would come with a statute of limitations, allow for joint and several liability, or be subject to other restrictions will be important in assessing any potential legislation.
Yesterday, the Third Circuit issued an opinion in Federal Trade Commission v. AbbVie, Inc., joining the Seventh Circuit in holding that the FTC is not entitled to seek disgorgement under Section 13(b) of the FTC Act. The decision reflects a potential turning of the tides on how courts view FTC’s statutory authority to seek monetary relief.
By way of background, the district court ordered the AbbVie defendants to disgorge $448 million in alleged ill-gotten profits from anticompetitive conduct regarding the patented drug AndroGel. Though the Third Circuit held that the district court properly concluded that AbbVie had monopoly power in the relevant market, it struck down the $448 million award.
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…
On September 20, 2018, the FTC and Utah Department of Commerce held a symposium in Salt Lake City, Utah, discussing, among other things, how the two work together to combat consumer fraud in various areas. The panels provided a unique insight into how law enforcement agencies coordinate and their respective priorities. Below are two key takeaways from the various panels.
- State and Federal Agencies Are Working Together
Although it may seem like no one is getting along these days, there continues to be a significant degree of coordination and cooperation between the federal government and state counterparts to achieve the common goal of battling consumer fraud. Agencies are forming partnerships to better understand vulnerable areas for consumers and better situate themselves to obtain the most consumer redress. Some groups, such as the Investment Fraud Working Group, which comprises both federal and state agencies, meet formally every quarter to discuss strategic plans. For example, as a panelist noted, depending on the size of a given case and whether it involves activities crossing state lines, the Utah Department of Commerce may refer a case to the FTC because it can cross state borders and can obtain asset freezes and temporary restraining orders.
In part II of our series on our wish list for the new FTC, we look at the issue of the pace of FTC investigations. And just like Tom Cruise, we feel the need, the need for speed.
Now it’s no secret that, for the most part, FTC investigations proceed slowly. Some of that is no doubt due to resource limitations and a wish for more FTC resources is just not likely one that Santa can make come true. Putting aside more resources, are there other creative alternatives that could be considered?
There’s been a lot of talk about the one eensy weensy Supreme Court vacancy, but nary a word about the not one but TWO FTC vacancies. Indeed, if any of you were out and about recently, say at the theater perhaps, you might have been sitting near a future FTC Commissioner. So, let’s imagine for a second that we were talented enough to appear in the theater (ok, truth be told, Amy is, but that’s a blog for another day) and that all of you are wealthy enough to be able to afford Hamilton tickets and sit among possible future FTC appointees. What would we say to all of you about the possible future direction of the FTC? What might be on a new administration’s wish list? We’ll explore these questions in a few upcoming blogs. We’d love to hear your thoughts as well.…
Continue Reading All We Want for the New FTC is . . .
The FTC’s Bureau of Consumer Protection routinely goes into federal district court seeking redress or disgorgement in cases of alleged fraud and deception. The folks in the FTC’s Bureau of Competition recently indicated that they may want to start more regularly seeking such relief. One interesting question raised by all of this is: Can the…