Case No. 19-508 | 9th Cir.
January 13, 2021
Preview by Jacob Reiskin, Online Editor
In AMG Capital Management, LLC v. Federal Trade Commission (FTC) the Court will decide the meaning of the word “injunction” in § 13(b) of the Federal Trade Commission Act (“FTC Act”). Pub L. No. 63-203, 38 Stat. 717 (1914). The Government argues that it has the authority to impose restorative monetary sanctions on offenders. The two offenders in the consolidated case here argue that the statute does not give the FTC the authority to impose monetary awards because injunctions are not retrospective.
The case follows from a circuit split. AMG Capital Management, run by convicted criminal Scott Tucker, was ordered by a district court to pay $1.3 billion in restitution for a multi-billion-dollar payday lending scheme. The Ninth Circuit affirmed, and AMG Capital Management now appears as a petitioner. See FTC v. AMG Capital Management, LLC, 910 F.3d 417 (9th Cir. 2018). Credit Bureau Center, LLC and its owner, Michael Brown, faced a similar district court holding, however the Seventh Circuit reversed the monetary judgement while affirming the business operations injunction. See FTC v. Credit Bureau Ctr., LLC, 937 F.3d 764 (7th Cir. 2019). Credit Bureau Center now appears as a respondent.
Both companies argue for a narrow reading of the FTC Act and argue that injunctive relief is prospective and not retrospective. The companies claim that other parts of the statute would be rendered redundant if § 13(b) is read to include monetary relief. On the contrary, the FTC finds that the word “injunction” allows “restorative remedies” under a traditional definition of injunction and equity. Brief for the Federal Trade Commission, at 3, AMG Cap. Mgmt., LLC v. FTC, No. 19-508 (U.S. filed Nov. 30, 2020). The FTC concedes that injunctions are mostly forward looking, but it insists that legal theory and precedent has always recognized that injunctions can be used to restore unfair conditions through monetary relief. See id. After giving a long tour through legal history and theory, the FTC emphasizes that § 13(b) relief money is returned to victims who suffered losses from defendants’ illegal behavior. The FTC also explains that since the FTC Act passed in 1914, Congress has only expanded the power of the Commission over the course of the last 100 years, in part by creating parallel administrative and judicial enforcement paths. Id. at 41.
The companies combine their textual arguments about the limited nature of injunctions and the absence of any mention of monetary relief with concerns about fairness. Credit Bureau Center argues that § 13(b) lacks fair procedure, like what is required by § 19 of the statute. See Opening Brief for Respondents Credit Bureau Center, LLC and Michael Brown at 33–39, AMG Cap. Mgmt., LLC v. FTC, No. 19-508 (U.S. filed Sept. 25, 2020). Credit Bureau Center finds that this reinforces the view that Congress intended the FTC to proceed with rulemaking and not ad hoc § 13(b) enforcement for any possibility of monetary relief. See id. at 38.
This case implicates a core enforcement power of the FTC and will determine whether the Commission has the tools to recover stolen money from fraudsters or whether victims will be required to file separate suits under consumer protection statutes. See Reply Brief for Petitioners at 25, AMG Cap. Mgmt., LLC v. FTC, No. 19-508 (U.S. filed Dec. 30, 2020).