State AGs Join the Push to Restore FTC Powers to Obtain Monetary Relief

On June 28, 2021, the Attorneys General from New York and Colorado co-authored a letter to congressional leaders supporting the restoration of the Federal Trade Commission’s right to seek equitable relief, an affirmation urgently sought by the pending Consumer Protection and Recovery Act (H.R. 2668).  Twenty-eight attorneys general joined en masse to support the passage of H.R. 2668, which was introduced in April 2021 by Representative Tony Cárdenas (D-CA) to “to affirmatively confirm the authority of the Federal Trade Commission to seek permanent injunctions and other equitable relief for violations of any provision of law enforced by the Commission.”

Focusing on the consumer harm that will allegedly remain un-remedied absent these relief granting powers and the frustration of the federal-state collaboration to police anti-competitive, unfair and deceptive trade practices, the letter reviewed the monumental April 2021 U.S. Supreme Court decision in AMG Capital Management, LLC v. Federal Trade Commission, 141 S. Ct. 1341 (2021). The AMG decision shook the market by dismantling a longstanding FTC enforcement stick. In a unanimous decision, the court held that the FTC Act does not permit the FTC to wield its authority to seek injunctive relief under Section 13(b) of the FTC Act to pursue monetary remedies against wrongdoers. Section 13(b) was enacted in 1974, authorizing the Commission to seek preliminary and permanent injunctions to remedy any provision of law enforced by the FTC. While Section 13(b) does not itself mention monetary relief, it has been applied under the expanded premise that authority to grant an equitable remedy of an injunction automatically conferred all of the court’s equitable powers. This expended reading, widely adopted since the 1980s, enabled the FTC to seek monetary remedies without having to rely on completing the painstaking administrative process permitting otherwise monetary relief under Section 19.

Left with the arguably cumbersome administrative process as its remaining mechanism to provide monetary relief to aggrieved consumers, the dominos have begun to fall with pending FTC cases. The House Committee on Energy & Commerce held virtual open markup sessions on April 27 and June 10, 2021 prompting discussions around the urgent need for the Consumer Protection and Recovery Act and a Republican member supported counter-proposal for a shortened statute of limitations, ultimately voting 30-22 to advance the legislation to the House with amendment, including its application to pending FTC actions.

By Katherine L. Staba

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