S&C Litigators Preview Upcoming Supreme Court Fight Over FTC’s Enforcement Authority

July 10, 2020

In an article for Bloomberg Law, S&C litigation partners Alex Willscher and Judd Littleton, and litigation associate Karl Bock, examine the impact that a recent Supreme Court decision may have on the enforcement authority of the Federal Trade Commission.  This question took on increased significance when, just yesterday, the Supreme Court agreed to hear a case next Term that puts the validity of this FTC enforcement tool squarely at issue.

The article analyzes the impact that the Supreme Court’s decision last month in Liu v. SEC may have on what the FTC has described as “one of its most important and effective enforcement tools” in federal court—its authority to seek restitution on behalf of consumers for alleged unfair or deceptive practices.  In Liu, the Court held that the statute allowing the SEC to seek “equitable relief” included the authority to seek disgorgement of defendants’ profits in certain cases, but imposed limits on the scope of that remedy.  The article addresses how future courts may apply the reasoning of Liu in deciding whether the FTC’s statutory authority to seek “injunctive” relief includes the authority to require a defendant to provide restitution to consumers.

Yesterday, the Supreme Court granted certiorari in FTC v. Credit Bureau Center to consider precisely that question, in a case that could have a tremendous impact on the FTC’s enforcement authority.  Courts have generally permitted the FTC to seek equitable monetary relief, and the agency has in recent years obtained billions of dollars pursuant to that authority.  But in August 2019, the Seventh Circuit broke with those other courts and its own long-standing precedent to conclude that the FTC lacks statutory authority to seek restitutionary relief.   The Court will consider the Seventh Circuit’s reasoning during its 2020 Term and is expected to issue its decision sometime before June of 2021.

To read the full article, click here.