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AMG Capital Management, LLC v. FTC

The Federal Trade Commission Act prohibits unfair methods of competition and unfair or deceptive acts or practices in commerce. To enforce that prohibition, the Federal Trade Commission (FTC) has long been authorized to conduct administrative proceedings and issue cease-and-desist orders prohibiting unlawful conduct. In 1973, Congress also authorized the FTC to file a court action and to obtain a “permanent injunction” enjoining violations of the statute. For decades, lower federal courts have held that the FTC may seek, and district court may award, relief that requires a defendant to restore the ill-gotten gains from the illegal activity to the victims of the violation.

In 2020, the U.S. Supreme Court granted a petition for certiorari to consider whether a district court may not award restorative relief in connection with a permanent injunction but, instead, may only enjoin unlawful activity going forward. Public Citizen filed an amicus brief in support of the FTC’s argument that the Supreme Court should reject AMG’s reading and hold that courts may award restorative relief. Our brief argued that Supreme Court precedent when Congress amended the Federal Trade Commission Act in 1973 contemplated that courts could award restorative relief when Congress has authorized an agency to obtain injunctive relief in a regulatory enforcement action. The brief also explained that Congress could not have intended to limit the FTC to purely prospective relief because the FTC could obtain such relief through its cease-and-desist authority, and that a 1975 amendment to the FTC Act did not cut back on the district courts’ existing authority to order restorative relief in FTC enforcement actions. Nonetheless, in April 2021, the Court held that the FTC Act does not authorize the Commission to seek, or a court to award, equitable monetary relief such as restitution or disgorgement.