AMG Capital Management, LLC v. Federal Trade Commission

Scott Tucker operated a network of payday lending companies, including AMG Capital Management, that made over five million loans between 2008 and 2012. The FTC sued Tucker under Section 5(a) of the FTC Act, alleging deceptive practices in the disclosure of loan terms and fees. The District Court granted a permanent injunction and ordered Tucker to pay $1.27 billion in restitution and disgorgement, relying on Section 13(b) of the FTC Act, which authorizes the FTC to seek a "permanent injunction." The Ninth Circuit affirmed. The Supreme Court granted certiorari to resolve a circuit split on whether Section 13(b) permits equitable monetary relief.

The Supreme Court unanimously reversed the Ninth Circuit, holding that Section 13(b) does not authorize the FTC to seek, or a court to award, equitable monetary relief such as restitution or disgorgement. Justice Breyer authored the opinion. The Court reasoned that the plain meaning of "permanent injunction" refers to prospective relief, not retrospective monetary relief, and that Section 19 of the Act provides the mechanism for obtaining consumer redress only after administrative cease-and-desist proceedings.

Whether Section 13(b) of the Federal Trade Commission Act, which authorizes the FTC to seek a "permanent injunction," also authorizes the FTC to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.

The decision significantly curtailed the FTC's ability to obtain monetary relief for consumers in federal court under Section 13(b), a tool the agency had used for decades to secure billions of dollars in refunds. Acting FTC Chairwoman Rebecca Kelly Slaughter criticized the ruling, stating that the Supreme Court "ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior." Consumer advocacy groups urged Congress to pass legislation restoring and strengthening the FTC's authority. The ruling also raised questions about similar enforcement mechanisms in other agencies, including the FDA.