AMG Capital Management v FTC: Supreme Court Decision

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AMG Capital Management v FTC Supreme Court Decision and what it means for other cases

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Anthony P. Badaracco is a partner at the international law firm Dorsey & Whitney whose practice focuses on antitrust law and business litigation and counseling. He has helped numerous clients obtain clearance from the Department of Justice and the Federal Trade Commission for mergers, acquisitions, and joint ventures and provides comprehensive pre-integration counsel in connection with transactions. He has been following this case and of the decision this morning says,

Supreme Court Decision's On AMG v FTC

"Today’s decision does not mean the FTC no longer can obtain equitable monetary relief. But it does mean that, under current law, the FTC must first obtain a cease-and-desist order through its own administrative process—and then file a separate claim for monetary relief in court. That is a lengthier, more expensive process," Badaracco says.

"The FTC, along with a number of organizations that filed friend-of-the-court briefs, argued that the FTC should be able to go directly to court to seek equitable monetary relief, because it would be “undesirable” for someone found to have violated the FTC Act to be able to keep profits earned at consumers’ expense. The Court declined to rule based on what is “desirable,” focusing instead on its textual analysis of the FTC Act," Badaracco says.

"This may not be the end of the story. The Court noted that the FTC recently asked Congress to revise the FTC Act to expressly authorize restitution and disgorgement in cases filed directly in federal district courts, and that just last year Congress considered a bill that would do so," Badaracco says.

More Details

Other observations/details he includes concerning the case/decision:

"The Supreme Court has unanimously concluded, based on the text and structure of the Federal Trade Commission Act, that the FTC cannot go directly to court to seek disgorgement or restitution remedies without having first completed its own internal administrative proceeding," Badaracco says.

"The FTC can prosecute claims for unfair competition, or for unfair or deceptive acts or practices, in two ways. First, it can file an administrative complaint, to be heard by an FTC Administrative Law Judge empowered to issue injunctions, subject to review by the full Commission and then by a federal appeals court. Second, it can file a claim in federal district court for an injunction. At issue in this case is Section 19 of the FTC Act (signed into law in 1975), which authorizes district courts to order a “refund of money or return of property”—but only where “the Commission has issued a final cease and desist order.” Here, the FTC went directly to federal court and obtained an injunction and a $1.27 billion restitution award. The Ninth Circuit affirmed," Badaracco says.

"A lot of money was at stake here. The FTC obtained a $1.27 billion award in this case alone, and the FTC made clear in its merits brief that it now brings “dozens” of disgorgement cases directly in federal district court every year and has obtained “billions” of dollars in disgorgement remedies," Badaracco says.