On Wednesday, we described draft legislation circulating in the Senate Commerce Committee that would have given the Federal Trade Commission almost unfettered authority to enjoin permanently any act, practice or method of competition that did not meet its approval. https://www.adlawaccess.com/2022/05/articles/senate-commerce-committee-chair-pushes-one-sided-13b-fix/ All the Commission would need to do is show that a reasonable person had fair notice that the conduct “could” violate the FTC Act.

Senator Cantwell has now introduced the bill and it’s more one-sided today than it was in draft form. The need to show fair notice of even a possible violation is gone.

S. 4145, the “Consumer Protection Remedies Act,” was introduced by Chair Cantwell last night, with co-sponsors Senators Klobuchar (D-MN), Warnock (D-GA), and Lujan (D-NM). If this bill becomes law, to stop a practice, the Commission would merely need to persuade a judge that “the public interest” is on its FTC’s side . That is effectively no standard at all.

At least defendants will have an opportunity to argue that the Commission cannot obtain money until it proves a violation of some law the FTC enforces. The bill says that restitution, disgorgement, and rescission or reformation of contracts are available only in suits with respect to a violation of a provision of law enforced by the Commission.”

The Cantwell bill no longer confines relief under Section 13(b) to violations that are occurring or about to occur. Any violation within the past ten years remains exposed to monetary recovery. This doubles or triples the period for which the Commission can seek money.

In short, S. 4145 gives the Commission virtually unlimited authority to enjoin methods of competition, marketing practices, privacy protections, and information-security practices. And it would expose a decade of revenues to the agency’s monetary demands. The “Consumer Protection Remedies Act” would not simply streamline the procedures in the FTC Act; it would expand the Commission’s powers, handcuff the courts, and leave American businesses wondering when their conduct might run afoul of three Commissioners’ interpretation of the public interest.

Expect some movement next week in advance of the Commerce Committee markup, with Senator Lee likely to offer an amendment in the nature of a substitute. With 14 Democrats and 14 Republicans on the Committee, however, a party line vote would allow the Cantwell bill to advance. But once it does, it likely loses traction. Without 60 votes as a stand-alone on the Senate floor, Chair Cantwell would need to slip this into must-pass legislation for it to become law.

Given the Commission’s newfound interest in exploring non-13(b) statutory avenues to obtain monetary remedies, we have expanded our Post-AMG chart to include a wider swath of ongoing cases in which the FTC is attempting to collect money absent the use of 13(b). The latest version of our expanded chart follows.

CASE	RELEVANT POST-AMG ACTION
FTC v. 8 Figure Dream Lifestyle LLC, No. 19-01165 (C.D. Cal.)	There has been no 13(b)-related post-AMG action on this docket. However, in its Complaint, the FTC brought its action under Section 13(b) and 19 of the FTC Act as well as the Telemarketing Act. The FTC seeks injunctive relief pursuant to the FTC Act, and still seeks monetary relief pursuant to the Telemarketing Act.
FTC v. AbbVie Inc., et al., No. 14-5151 (E.D. Pa.)	On July 30, 2021, the FTC requested that the Court grant its Unopposed Motion to Voluntarily Dismiss the Reverse Payment Claims with Prejudice, as the Supreme Court held “that the FTC does not have authority to seek monetary relief in federal court under Section 13(b) of the Federal Trade Commission Act.” On August 2, 2021, the Court granted that motion.
FTC v. Adept Management, Inc., Nos. 19-35668, 19-35669 (9th Cir.)	Following AMG, the parties filed supplemental briefs detailing their respective positions how the appeal should proceed. Both the FTC and defendants conceded that monetary judgment under 13(b) should be vacated. On June 11, 2021, the Ninth Circuit vacated the district court’s judgment granting monetary relief in light of AMG.
FTC v. Age of Learning, Inc. (ABCmouse), No. 20-07996 (C.D. Cal.)	There has been no 13(b)-related post-AMG action on this docket. However, on September 1, 2020, the FTC filed its Complaint under Section 13(b) and 19 of the FTC Act and ROSCA. The FTC seeks injunctive relief pursuant to the FTC Act, and still seeks monetary relief pursuant to ROSCA. After a stipulated order for permanent injunction, on September 8, 2020, the court entered a stipulated order for permanent injunction and monetary judgment in the amount of $10M.
FTC v. American Future Systems, Inc., No. 20-cv-02266 (E.D. Pa.)	On April 30, 2021, defendants filed a notice of supplemental authority notifying the court of the AMG decision, and arguing that significant portions of the FTC’s complaint should be stricken. On May 17, 2021, defendants filed their answers to the (pre-AMG) complaint, making the same requests. On June 24, 2021, American Future filed a motion for judgment on the pleadings, to which the FTC filed a response in opposition on July 7, 2021. American Future raised the issue that the Supreme Court’s ruling in AMG bars the FTC from monetary damages in this case, and that the FTC improperly invoked Section 13(b) of the FTC Act to evade the administrative procedures established by Section 19 of the FTC Act. In its opposition, the FTC noted that “the FTC has already ceased its pursuit of monetary relief in this matter.” Further, the FTC only sought a permanent injunction under Section 13(b). On July 26, 2021, the Court issued an Order denying Defendants’ motion for judgment on the pleadings, noting that AMG does not “Preclude FTC’s Section 13(b) Claims for Permanent Injunctive Relief.” Discovery in this case is ongoing.
FTC v. American Screening, LLC, No. 20-cv-1021 (E.D. Mo.)	There has been no 13(b)-related post-AMG action on this docket. However, on August 4, 2020, the FTC filed its Complaint under Section 13(b) and 19 of the FTC Act and MITOR. The FTC seeks injunctive relief pursuant to the FTC Act, and still seeks monetary relief pursuant to MITOR. On October 1, 2021, the FTC filed a motion for summary judgment against all defendants, asserting that it is entitled to summary judgment on all counts. That motion is still pending.
AMG Capital Management, INC. v. FTC, No. 19-508 (U.S. S. Ct.), No. 16-17197 (9th Cir.), No. 12-cv-00536 (D. Nev.)	On June 8, 2021, the 9th Circuit vacated its December 3, 2018 order and reversed the district court’s order awarding equitable monetary relief to the FTC. The 9th Circuit then remanded the case to the district court for further proceedings consistent with the Supreme Court’s opinion. On July 13, 2021, a status conference was held in the District Court. The Court indicated it would issue an order terminating the asset freeze. On September 3, 2021, the Court entered a Second Amended Order granting the Defendants’ Motion for Summary Judgment to the extent that it opposes an award of equitable monetary relief to the FTC, and denied the FTC’s Motion for Summary Judgment to the extent that it requests equitable monetary relief.
FTC v. Cardiff, Nos. 20-55858, 20-55397, 20-55066, 19-56397 (9th Cir.); No. 18-2104 (C.D. Cal)	On April 28, in a brief, three-paragraph order, a per curiam panel vacated the district court’s preliminary injunction order that had been entered into “to preserve assets pending a final judgment that could include equitable monetary relief in this action under § 13(b) of the FTC.” Given AMG, the panel explained that the injunction was no longer necessary, and remanded the case to the district court. Before the district court, the parties filed expedited briefing regarding the import of AMG on the FTC’s complaint, with the FTC arguing it can obtain monetary redress by way of ROSCA. Defendants argued that the FTC had always been seeking monetary relief under 13(b), and cannot change its position after the fact. On May 26, 2021, the District Court noted that it had to rule on the effect of AMG on the 2018 preliminary injunction and what remedies remain. On June 29, 2021, the District Court issued an Order, granting summary judgment, barring the FTC from recalculating and modifying how it would seek damages, if initially, it had sought monetary relief under Section 13(b). While the court agreed with the FTC that it could have pursued monetary relief under an alternative statute, it found that the FTC had waived the right to request such relief in this case, largely because in the FTC’s Rule 26 disclosures, the FTC had only calculated damages under 13(b). The Court noted that the FTC only pivoted to attempt to obtain statutory fees under ROSCA at the eleventh hour, following AMG. On August 26, 2021, the Court concluded that as Section 13(b) of the FTC Act does not permit monetary restitution, “there will be no monetary judgment” in favor of the FTC. Because no monetary relief can be had, the Cardiff Order requires the FTC to provide the Court with a date certain by which the receivership should be terminated.
FTC v. Credit Bureau Center LLC, No. 17-cv-194 (N.D. Ill.)	On May 6, 2021, the FTC filed a Motion to Amend Judgment. The FTC claims it now seeks monetary relief under ROSCA and Section 19 of the FTC Act, as opposed to Section 13(b). The defendant filed its response on May 28, 2021 calling the FTC’s motion a “desperate attempt to overturn AMG.” On June 11, 2021, the FTC filed its reply, stating that ROSCA and Section 19 provide an independent statutory basis apart from 13(b) to obtain a monetary judgment. On September 13, 2021, the Court issued a memorandum opinion and order granting the FTC’s motion to alter or amend its judgment, reimposing the prior judgment of a permanent injunction and over $5M in monetary relief under Section 19 of the Act, 15 U.S.C. Section 8404, and Section 5 of ROSCA. On October 22, 2021, Defendants filed a notice of appeal of the district court’s ruling to the Seventh Circuit.
FTC v. Disruption Theory LLC, No. 20-cv-06919 (N.D. Cal.)	Following AMG the parties stipulated, and on May 18, 2021 the Court issued an order, “dissolving the asset freeze entered in the Court’s October 6, 2020 Ex Parte Temporary Restraining Order.” On June 24, 2021, the FTC moved for summary judgment and a permanent injunction against Marc Grisham, but did not seek damages for violations of 13(b). That same day, the FTC also moved for default judgment and a permanent injunction against the “defaulting defendants.” The defendants opposed the motions. On September 1, 2021, the Court granted the motion for default judgment. On October 6, 2021, the FTC filed a Stipulated Settlement Agreement and Proposed Order for a Permanent Injunction.
FTC v. Electronic Payment Solutions of America, Inc., No. 17-02535 (D. Ariz.)	On May 3, 2021, the FTC filed a Motion to Withdraw the pending summary judgment motion requesting the Court provide monetary relief through 13(b), due to AMG. On May 10, 2021, defendants filed a motion for reconsideration of the denial for a Judgment of the Pleadings based on the new authority provided by AMG. At a status conference on June 14, 2021, the Court ordered the FTC to file a response to this motion. On July 2, 2021, in its response, the FTC noted that “[a]lthough the FTC concedes that AMG precludes its recovery of equitable monetary relief in this action, the language of AMG itself, as well as subsequent authority, make clear that the FTC is still entitled to injunctive relief …” On August 11, 2021, the Court issued an Order on summary judgment. In it, the Court noted that the FTC seeks both equitable monetary relief and a permanent injunction. “The parties agree that the FTC can no longer obtain equitable monetary relief under AMG Capital.” The Court dismissed the FTC’s claim for equitable monetary relief without prejudice.
FTC v. Elegant Solutions, Inc., No. 20-55766 (9th Cir.); No. 19-cv-01333 (C.D. Cal.)	Although Ninth Circuit briefs had already been filed, the Ninth Circuit required new briefing following AMG. Appellants filed their revised brief on June 1, 2021, in which they argued that the FTC does not have the authority to impose some of the remedies. On July 30, 2021, the FTC filed its Answering Brief. For AMG-related issues, the FTC argued that for a permanent injunction, it did not need to file an administrative complaint seeking the same relief, and that the court did not abuse its discretion in issuing an injunction. The FTC conceded that “the Supreme Court’s recent decision in AMG, holding that Section 13(b) does not authorize monetary relief, does not undermine this longstanding precedent regarding the availability of injunctive relief.”
FTC v. F&G International Group Holdings, LLC, No. 20-cv-73 (S.D. Ga.)	On August 5, 2021, the FTC filed a supplemental notice in anticipation of summary judgment filings, noting that, post-AMG, the FTC would only seek injunctive conduct relief under Section 13(b) and does not seeking equitable monetary relief. On October 5, 2021, the FTC filed its motion for summary judgment, seeking a permanent injunction under Section 5(a) of the FTC Act and not seeking monetary restitution. On October 26, 2021, defendants filed their opposition to the FTC’s motion for summary judgment, arguing that the defendants have not violated the FTC Act, but consenting to minimal future marketing changes. The outstanding issues are solely about injunctive relief that the FTC seeks.
FTC v. Facebook, Inc., No. 20-cv-03590 (D.D.C.)	On April 27, 2021, Facebook filed a notice of supplemental authority regarding AMG, arguing that, following the Supreme Court’s decision “the FTC lacks statutory authority to maintain its lawsuit in federal district court.” On May 3, 2021, the FTC filed a Response, arguing that the action is still appropriate because Section 13(b) still empowers the FTC to seek a permanent injunction.” Of course, the statutory text only speaks of preliminary injunctive relief. On June 28, 2021 the court granted Facebook’s motion to dismiss and dismissed the complaint without prejudice. Section 13(b) was not a basis of the motion to dismiss, but the court did note that “an injunction under Section 13(b) is a theoretically available remedy in a Section 2 challenge to long-ago mergers…” The FTC publicly filed an Amended Complaint on September 8, 2021. The Commission only sought a permanent injunction and other equitable relief under Sections 13(b) and 15 U.S.C. section 53(b). The FTC noted that Section 13(b) of the FTC Act “empowers this Court . . . in the exercise of its equitable jurisdiction, to order equitable relief to remedy the injury caused by Facebook’s violations.” On October 4, 2021, Facebook filed a motion to dismiss the Amended Complaint.
FTC v. FleetCor Technologies, Inc., No. 19-cv-05727 (N.D. Ga.)	On May 17, 2021, defendants filed a motion for partial summary judgment, asserting that, following AMG, “the FTC is not entitled to relief on its claim for equitable monetary relief, and [] the FTC is not entitled to relief on its claim for prospective injunctive relief.” In reply, the FTC noted that it only seeks injunctive relief: “In its opening brief, the FTC did argue that FleetCor’s challenged statements were ‘widely disseminated’ as a proxy for reliance . . . but that showing is necessary only to obtain monetary relief, which the FTC concedes it cannot obtain at this time”. On July 12, 2021, Defendants filed their reply brief, arguing that the FTC is not entitled to injunctive relief that that the FTC lacks authority to enjoin past conduct. On August 13, 2021, the FTC filed a motion to stay pending the resolution of administrative litigation, or in the alternative, to dismiss without prejudice. The FTC indicated its intention to file a Section 19 administrative claim in order to obtain monetary relief. On August 27, 2021, the defendants filed a response, arguing that the FTC is using Section 19 to forum shop so that the Commission itself can decide the motions pending before the Court. There will be oral arguments on FTC’s motion to stay or voluntarily dismiss on December 10, 2021.
FTC v. Frontier Communications Corp., No. 21-04155 (C.D. Cal.)	On May 19, 2021, the FTC, along with the attorneys general of Arizona, Indiana, Michigan, North Carolina, and Wisconsin, and the People of the State of California, filed a Complaint against Frontier Communications Corporation. The Complaint seeks a temporary and permanent injunction by the FTC under Section 13(b). The attorneys general of Arizona, Indiana, Michigan, North Carolina, and Wisconsin also seek monetary remedies pursuant to consumer protection and business regulation authority. On July 20, 2021, Defendant filed a motion to dismiss the Complaint, noting that the Court lacks jurisdiction and that plaintiffs fail to state a deceptive advertising claim. The motion to dismiss also argues that the FTC had been pressuring Frontier to pay a monetary penalty under the FTC Act, but since AMG and the filing of this Complaint, the FTC seeks only injunctive relief for itself and has recruited 6 states to join its lawsuit so that the complaint can include demands for money. On October 3, 2021, the Court granted in part and denied in part Frontier’s motion to dismiss. The Court granted the motion and dismissed the claims alleged by Arizona, Indiana, Michigan, North Carolina and Wisconsin, but denied the motion as to the FTC and the State of California.
FTC v. Hornbeam Special Situations, LLC, No. 17-cv-03094 (N.D. Ga.)	On July 2, 2021, the FTC filed a notice of supplemental authority re AMG, noting that “the FTC hereby provides notice to the Court and Defendants that it is not currently seeking equitable monetary relief under Section 13(b) of the FTC Act as to any defendant in this matter. However, the FTC continues to seek injunctive conduct relief under Section 13(b), as well as equitable monetary relief under Section 19.” On August 10, 2021, the FTC filed motions for summary judgment. The FTC only sought permanent injunction under Section 13(b), but also sought summary judgment on the fact that the defendants violated Section 5(a) of the FTC Act, ROSCA, and the Telemarking Sales Rule. The FTC sought equitable monetary relief against the estate of one defendant. Defendants filed motions for summary judgment on that same day, the estate argued that AMG barred monetary relief. All motions remain pending. A video hearing is set for December 21, 2021.
FTC v. Lending Club Corp., No. 18-cv-02454 (N.D. Cal.)	Following AMG the parties stipulated, and on May 14, 2021 the Magistrate Judge ordered, “that the demand for equitable monetary relief in the FTC’s First Amended Complaint should be stricken.” On June 10, 2021, the parties filed a case management statement in which they agreed that settlement discussions would be more “fruitful” based on AMG’s holding. On July 7, 2021, the Court was notified that the parties “settled the case subject to the contingency of approval of the Commission.”
FTC v. Mail Tree Inc., No. 15-cv-61034 (S.D. Fla.)	On April 30, 2021, the FTC filed a Notice of Supplemental Authority informing the Court that, per AMG, 13(b) does not allow for monetary relief.
FTC v. Neora, LLC, No. 20-cv-01979 (N.D. Tex.)	On April 30, 2021, the FTC filed a Notice of Supplemental Authority informing the Court that, per AMG, 13(b) does not allow for monetary relief. On May 10, 2021, the FTC and defendants filed dueling statements contesting the breadth of AMG’s repercussions. On May 17, 2021, the defendants filed a Motion for Judgment on the Pleadings, arguing that the FTC cannot prevail now that it cannot obtain 13(b) monetary relief. On June 7, 2021, the FTC filed its response to the Motion, arguing that AMG only applies to a very narrow issue, and that Neora is trying to use the ruling to dismiss the entire case, when 13(b) still allows the FTC to bring cases in federal court to obtain injunctive relief. The FTC did agree to dismiss the claims for monetary restitution and disgorgement, directly acknowledging that AMG “currently prevents the FTC from recovering equitable monetary relief under Section 13(b) in this case.” On June 14, 2021, defendants filed a Motion for a Protective Order and a Motion to Quash a Subpoena, arguing that per the holding in AMG, the FTC cannot look at past conduct and prescribe retrospective relief, they can only provide relief for future actions. On July 1, 2021, defendants filed a notice of supplemental authority, noting that the United States District Court for the District of Columbia in FTC v. Facebook, Inc., held that the FTC may not seek injunctive relief in federal courts under Section 13(b) of the FTC Act for long-past conduct without some evidence that the defendant is committing or is about to commit another violation. On August 2, 2021, the Court issued an Order on the Motion for Judgment on the Pleadings. The Court noted, “in light of the unambiguous pronouncement from the Supreme Court in AMG Capital regarding the unavailability of monetary relief under § 13(b), Defendants’ Motion as to FTC’s claim for monetary relief is granted. The remainder of Defendants’ Motion is denied.” The Court was not persuaded that the FTC needed to file an administrative proceeding before obtaining a preliminary injunction.
FTC v. Netforce Seminars, No. 00-cv-02260 (D. Ariz.)	On May 4, 2021, the FTC filed an unopposed Motion to extend the summary judgment briefing schedule in light of AMG, explaining “that the priority for all parties is to address the continuing application of the Preliminary Injunction in light of AMG.” That Motion was granted. On June 23, 2021, the FTC filed a motion for sanctions for contempt, alleging that the defendants violated the Final Order (by not tracking consumer complaints, discouraging consumer complaints, not responding to consumer complaints, and not investigating consumer complaints), and are in contempt of the Final Order by running prohibited marketing schemes, and misrepresenting potential income to consumers.
FTC v. Noland, No. 20-cv-00047 (D. Ariz.)	Due to AMG, a motion to lift the asset freeze remains pending. On May 21, 2021, defendants filed a motion entitled “The Effect of AMG Capital on This Case.” In the filing, defendants stated, “The FTC’s wanton approach and this court’s complaisance approach has resulted in an illegal prejudgment attachment and dissipation of assets under the guise of equity. But it is a farce. This court was duped. The FTC’s unclean hands entitles it to nothing. Its complaint should be dismissed.” On June 1, 2021, proposed intervenors, who had previously been denied intervention, filed a motion to intervene saying they have been harmed by the FTCs unlawful reading of 13(b) as held by AMG and should thus be allowed to intervene. The FTC responded on June 4, 2021 calling the motion untimely and calls AMG “irrelevant” to the court’s prior ruling. On June 14, 2021, the proposed intervenors filed a reply reiterating that their motion is timely and that they are affected by the holding in AMG. This motion was denied. On June 15, 2021, the Court issued an Order: “in the wake of the Supreme Court’s decision in AMG […], the Court issued an order requiring the parties to file a joint memorandum setting forth their views on ‘whether the asset freeze and receivership in this action should be modified or vacated in light of AMG Capital.’ After the parties filed their joint memorandum …, the Court held a hearing. IT IS SO ORDERED that the Court will take no action in response to the individual Defendants’ memorandum.” On June 23, 2021, the FTC filed a motion for summary judgment as to monetary remedies. The FTC did not base this motion on 13(b), instead citing to Section 19 of the FTC Act and 15 U.S.C. Section 57b. On July 30, 2021, defendants filed a Motion to Dismiss Case, Motion to Dissolve the Preliminary Injunction Order and Motion to Stay or Dismiss Section 13(b) Proceedings. Defendants argued that the FTC must first file an administrative complaint before seeking a TRO or preliminary injunction. On August 6, 2021, the FTC filed its response noting that AMG permits it to get permanent injunctive relief. On September 9, 2021, the Court granted the FTC’s motion for summary judgment on liability, noting that AMG does not “disturb the FTC’s ability to seek a permanent injunction pursuant to § 13(b) in this case”. On September 23, 2021, the Court granted the FTC’s motion to preliminary injunction with asset freeze and receivership based on the FTC’s Section 19 claims. On October 8, 2021, the defendants filed a notice of interlocutory appeal to the 9th Circuit Court of Appeals.
FTC v. Nudge LLC, No. 19-cv-00867 (D. Utah)	On May 5, 2021, the defendants filed a motion for partial summary judgment in light of AMG. The defendants asked the court to rule that the FTC “is not entitled to equitable monetary relief under Section 13(b) of the FTC Act.” On June 2, 2021, the FTC filed a non-opposition response to defendants’ Motion for partial summary judgment, noting that it does not oppose Nudge’s Motion “to the extent it requests ‘an order stating that the FTC is not entitled to any equitable monetary relief under Section 13(b)’ of the FTC Act.” The hearing on the motions was held on July 9, 2021. FTC’s motion for partial summary judgment and the cross motion for partial summary judgment by defendants were both denied. On July 26, 2021, the Court issued an Order denying the Motion to Dismiss for failure to state a claim, noting that the complaint adequately alleges a Telemarketing and Consumer Fraud and Abuse Prevention Act claim. On September 15, 2021, the Court granted the defendants motion for partial summary judgment on the issue that the FTC may not seek equitable monetary relief under Section 13(b) or fines or penalties under BODA. The Court noted that the Utah Consumer Protection Division could seek fines or penalties under BODA where it can prove the violation of a cease and desist order, but it did not pursue that route in this matter. On October 18, 2021, Plaintiffs filed a motion for summary judgment against all defendants, seeking an injunction under the FTC Act, and seeking consumer redress in the amount of over $102M against the Nudge defendants for violating the FTC Act, the Telemarking Sales Rule, the Consumer Sales Practices Act, the Business Opportunity Disclosure Act, and the Telephone Fraud Prevention Act.
FTC v. Publishers Business Services, Inc., No. 19-507 (S. Ct.); Nos. 17-15600; 11-17270 (9th Cir.); No. 08-cv-00620 (D. Nev.)	The case was remanded from the Supreme Court to the Ninth Circuit in light of AMG. The case is currently pending before the Ninth Circuit. On June 4, 2021, the FTC sent a letter to the 9th Circuit explaining that it sought money under Section 19 as well as Section 13(b), so AMG does not affect them and that Publishers Business Services already waived their 13(b) challenge. On June 9, 2021, defendants responded saying they did not waive this claim and argued that the FTC actually waived any §19 claim because they stopped arguing that. On June 10, 2021, the 9th Circuit affirmed the District Court’s order that granted the permanent injunction, and vacated the District Court’s order that awarded equitable monetary relief under Section 13(b).
FTC v. Quincy Bioscience Holding Co., No. 17-cv-00124 (S.D.N.Y.)	On April 27, 2021, defendants filed a letter requesting “a pre-motion conference concerning Defendants’ anticipated motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) dismissing with prejudice plaintiff the [FTC’s] request for monetary relief.” On May 10, 2021, the FTC filed a response, claiming that judgment on the pleadings would be premature, because “Congress is considering changes to the Federal Trade Commission Act in response to AMG Capital.” On May 11, 2021, defendants filed a reply, explaining that the FTC’s “speculative hope that the House and Senate may agree upon and pass legislation, at some unspecified future time” is an insufficient basis to delay ruling. On September 17, 2021, the Court issued an Order, dismissing the FTC’s claim for monetary relief under Section 13(b).
FTC v. QYK Brands, LLC, No. 20-cv-1431 (C.D. Cal.)	The parties stipulated to allow the FTC to amend its complaint shortly following AMG. On May 19, 2021, the FTC filed an Amended Complaint, striking all requests for 13(b) monetary relief, and instead requesting monetary relief pursuant to the FTC’s Trade Regulation Rule Concerning the Sale of Mail, Internet, or Telephone Order Merchandise (“MITOR”). On June 23, 2021, Defendants filed a motion to dismiss each of the FTC’s claims, stating: “On April 22, 2021, the Supreme Court published AMG …, which significantly limits the FTC’s ability to obtain damages. Defendants move to dismiss all the FTC’s claims on the grounds that (1) the FTC is not entitled to monetary relief…” The motion to dismiss also argued that MITOR does not authorize the FTC to obtain monetary relief because MITOR is a regulation, not a statute, and thus provides no authority for the FTC to obtain damages.
FTC v. Ragingbull.com, LLC, No. 20-cv-3538 (D. Md.)	The FTC filed a motion to stay the case in order to obtain approval to file an Amended Complaint, in order to file new claims to stand in for the current 13(b) claims. On May 18, 2021 in a related filing, the FTC conceded that it chose to voluntary dismiss a number of defendants because the “FTC no longer has the ability to recover those assets as equitable monetary relief under Section 13(b) of the FTC Act, due to the Supreme Court’s decision in AMG.” On June 11, 2021, the FTC filed a motion for leave to file an amended complaint. This amended complaint could “remove the FTC’s request for equitable monetary relief under Section 13(b) of the FTC Act, in light of the Supreme Court’s recent decision in AMG Capital…” Responses in opposition and replies by the FTC have been filed. There has not been an order on this motion yet.
FTC v. RCG Advances LLC, No. 20-cv-04432 (S.D.N.Y.)	On May 10, 2021, the defendants wrote to the Court requesting the Court set a settlement conference in light of AMG. Defendants averred that as part of a settlement, they “will agree to the issuance of a permanent injunction preventing any future violations of the FTC Act as well as paying the amount of all costs accrued in favor of the Plaintiff to date.” On May 11, 2021, the FTC filed a responsive letter, stating its intention to file an Amended Complaint replacing the prior requested 13(b) monetary relief with a new “claim and seek civil penalties for Defendants’ violations of Section 521 of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6821.” On May 14, 2021, the FTC filed a Motion for Leave to file the Amended Complaint. On June 10, 2021, the FTC filed an Amended Complaint where it sought to bring monetary penalties and a permanent injunction under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a), and 57b, and Section 522(a) of the Gramm-Leach-Bliley Act, 15 U.S.C. §6822(a).
FTC v. Simple Health Plans LLC, No. 18-cv-62593 (S.D. Fla.)	On April 22, 2021, one of the individual defendants filed an Emergency Motion to Dissolve the Preliminary Injunction, due to the Supreme Court’s ruling in AMG. That defendant submitted two notices of supplemental authority referencing other lower court cases dissolving preliminary injunctions following AMG. The FTC filed a response to the Motion on April 30, 2021, arguing that the Motion was not ripe and that the FTC still had Section 19 authority. On June 10, 2021, defendants filed a response to an order of supplemental briefing regarding AMG and their April 22 Motion to Dissolve. They argued that the situation in AMG is analogous to their situation. The FTC also filed its response, in which it argued that the Agency retains the power to issue preliminary injunctive relief and monetary relief under Section 19 of the Act. On September 5, 2021, the Court denied the defendant’s motion to dissolve preliminary injunction, finding that under Section 19 of the Act, it had authority to issue the preliminary injunction, order the asset freeze, and appoint the Receiver.
FTC v. SPM Thermo-Shield, Inc., No. 20-cv-542 (M.D. Fla.)	On May 14, 2021, the defendants filed a Motion to Dismiss the FTC’s claims for equitable monetary relief, due to AMG. On May 24, 2021, the FTC filed a response to the Motion to Dismiss, in which the FTC stated: “In AMG, the U.S. Supreme Court addressed the narrow question of whether Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), authorized retrospective monetary relief. The Court held that Section 13(b) did not authorize such relief. Slip op. at 1, 14. At this time, in light of the AMG decision, the FTC does not seek such relief.” On May 26, 2021 the court granted SPM’s Motion to Dismiss on all parts relating to AMG. On June 2, 2021, the FTC filed its First Amended Complaint for permanent injunction and other equitable relief, but kept their claim under Section 13(b). In the Amended Complaint, the FTC asks only for injunctive relief under Section 13(b).
FTC v. Stem Cell Institute of America, LLC, No. 21-03329 (N.D. Ga.)	On August 16, 2021, the FTC and the State of Georgia filed a Complaint against the Stem Cell Institute of America and other Defendants. The FTC seeks a permanent injunction under Section 13(b). The State of Georgia seems monetary relief under the Georgia Fair Business Practices Act.
FTC v. Supergooddeals.com, Inc., No. 20-cv-3027 (E.D.N.Y.)	In a July 8, 2020 Complaint, the FTC brings its action under Sections 13(b) and 19 of the FTC Act and MITOR to obtain permanent injunctive relief, restitution, rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and other equitable relief.
FTC v. Superior Products International II, Inc., No. 20-cv-2366 (D. Kans.)	On May 6, 2021, defendants filed a motion to dismiss the FTC’s request for equitable monetary relief in light of AMG. On May 10, 2021, the FTC withdrew its request for equitable monetary relief, and informed the Court of its intent to seek leave to file an Amended Complaint seeking monetary relief on other grounds. On June 9, 2021, the Court found the defendants’ motion to dismiss moot due to the FTC’s withdrawal of claims regarding monetary relief under 13(b). On June 22, 2021, the FTC filed a motion and memorandum in support of its motion for leave to Amend Complaint. On August 30, 2021, the FTC filed its Amended Complaint. In the Amended Complaint, the FTC brought claims under Section 5(a), 13(b) and 19 of the FTC Act, as well as 15 U.S.C. Section 53(b) and 57(b), and the R-value Rule.The FTC seeks a permanent injunction, monetary relief, and costs.
FTC v. Surescripts, LLC, No. 19-cv-01080 (D.D.C.)	On May 14, 2021, the parties filed a joint stipulation, stating that, due to AMG, the FTC withdraws its request for equitable monetary relief under 13(b). The Court adopted the stipulation on May 17, 2021. A status conference is scheduled for December 1, 2021.
FTC v. Trend Deploy, No. 21-00343 (M.D. Fla.)	In a post-AMG Complaint, the FTC brings claims under Sections 5(a), 5(m)(1)(A), 12, 13(b), 16(a)(1), and 19 of the FTC Act, 15 U.S.C. Sections 45(a), 45(m)(1)(A), 52, 53(b), 56(a)(1), 57b, MITOR, and CCPA, seeking permanent injunctive relief, rescission or reformation of contracts, the refund of monies paid, civil penalties, and other relief. On August 30, 2021, Defendants filed their motion to dismiss, noting that under Section 13(b) the Commission may only seek a temporary restraining order or a preliminary injunction. Defendants noted that Sections 5 and 19 would permit the FTC to seek monetary relief.
FTC v. Zurixx, LLC, No. 19-00713 (D. Utah)	On May 6, 2021, the court requested that the parties submit briefing to discuss how the AMG ruling impacts and applies to their case. On May 12, 2021, Defendants filed a motion for partial summary judgment and memorandum in support as to relief under Section 13(b), arguing that the FTC is not entitled to equitable monetary relief under Section 13(b) (citing AMG) and that the Utah Division of Consumer Protection is not entitled to any monetary relief under BODA. On May 28, 2021, the Utah Division of Consumer Protection filed its brief on how AMG impacts this litigation, noting that it did not assert a claim under Section 13(b) and that the Utah Code Section 13-11-17(1)(c) is not affected by AMG. On June 9, 2021, the Utah Division of Consumer Protection filed its memorandum in opposition to Defendants’ motion for partial summary judgment, making the same arguments that AMG does not impact BODA. All motions for summary judgment and partial summary judgment remain pending.

* * *

Follow us on LinkedIn and Twitter for the latest updates.

Latest update follows.

CASE	RELEVANT POST-AMG ACTION
FTC v. Adept Management, Inc., Nos. 19-35668, 19-35669 (9th Cir.)	The pending Ninth Circuit appeal was held in abeyance pending AMG’s outcome. Following the AMG decision, the parties filed supplemental briefs regarding how the appeal should proceed. Both the FTC and defendants conceded that the monetary judgment under 13(b) should be vacated. The FTC argued AMG has no other effect; defendants disagree. The appeal remains pending and oral arguments scheduled for June 9, 2021 were cancelled. The Ninth Cir. noted that the issue was adequately presented in the briefs and oral argument would not significantly aid the decisional process. On June 11, 2021, the Ninth Circuit vacated the district court’s judgment granting monetary relief in light of AMG.
FTC v. American Future Systems, Inc., No. 20-cv-02266 (E.D. Pa.)	On April 30, defendants filed a notice of supplemental authority notifying the court of the AMG decision, and arguing that significant portions of the FTC’s complaint should be stricken. On May 17, 2021, defendants filed their answers to the (pre-AMG) complaint, making the same requests. On June 24, 2021, American Future filed a motion for judgment on the pleadings, to which the FTC filed a response in opposition on July 7, 2021. American Future raised the issue that the Supreme Court’s ruling in AMG bars the FTC from monetary damages in this case, and that the FTC improperly invoked Section 13(b) of the FTC Act to evade the administrative procedures established by Section 19 of the FTC Act. In its opposition, the FTC notes that “the FTC has already ceased its pursuit of monetary relief in this matter.” American Future filed its response in support of its motion on July 8, 2021. On July 26, 2021, the Court issued an Order denying Defendants’ motion for judgment on the pleadings, noting that AMG Capital does not “Preclude FTC’s Section 13(b) Claims for Permanent Injunctive Relief.”
FTC v. American Screening, LLC, No. 20-cv-1021 (E.D. Mo.)	There have been no AMG-related filings on this docket.
AMG Capital Management, INC. v. FTC, No. 19-508 (U.S. S. Ct.), No. 16-17197 (9th Cir.), No. 12-cv-00536 (D. Nev.)	On June 8, 2021, the 9th Circuit vacated its December 3, 2018 order and reversed the district court’s order awarding equitable monetary relief to the FTC. The 9th Circuit then remanded the case to the district court for further proceedings consistent with the Supreme Court’s opinion. On July 13, 2021, a status conference was held in the District Court. The Court indicated that it intends to issue an order terminating the asset freeze.
FTC v. Cardiff, Nos. 20-55858, 20-55397, 20-55066, 19-56397 (9th Cir.); No. 18-2104 (C.D. Cal)	On April 28, in a brief, three-paragraph order, a per curiam panel vacated the district court’s preliminary injunction order that had been entered into “to preserve assets pending a final judgment that could include equitable monetary relief in this action under § 13(b) of the FTC.” Given AMG, the panel explained that the injunction was no longer necessary, and remanded the case to the district court. Before the district court, the parties filed expedited briefing regarding the import of AMG on the FTC’s complaint, with the FTC arguing it can obtain monetary redress by way of ROSCA. Defendants argued that the FTC had always been seeking monetary relief under 13(b), and cannot change its position now. On May 24, 2021, the District Court ordered the FTC to pay the Receiver’s fees, from the date of the AMG ruling going forward. The Court explained that it would be inequitable to force defendants to pay these fees now that the Supreme Court has established that 13(b) does not allow for monetary relief. On May 26, 2021, the District Court noted that it had to rule on the effect of AMG on the 2018 preliminary injunction and what remedies remain. This issue is fully briefed, but no order has yet issued. On June 29, 2021, the District Court issued an Order, granting summary judgment, barring the FTC from recalculating and modifying how it would seek damages, if initially, it had sought monetary relief under Section 13(b). The FTC attempted to recover monetary penalties under a separate statutory provision. While the court agreed with the FTC that it could have pursued monetary relief under an alternative statute, the FTC had waived the right to request such relief in this case, largely because in the FTC’s Rule 26 disclosures, the FTC had only calculated damages under 13(b).
FTC v. Credit Bureau Center LLC, No. 17-cv-194 (N.D. Ill.)	On May 6, 2021, the FTC filed a Motion to Amend Judgment. The FTC claims it now seeks monetary relief under ROSCA and Section 19 of the FTC Act, as opposed to Section 13(b). The defendant filed their response on May 28, 2021 calling the FTC’s motion a “desperate attempt to overturn AMG.” On June 11, 2021, the FTC filed their reply, stating that ROSCA and Section 19 provide an independent statutory basis apart from 13(b) to obtain a monetary judgment. On June 23, 2021, the court set an oral argument for July 14, 2021 on the FTC’s motion to alter judgment. No order has yet been issued.
FTC v. Disruption Theory LLC, No. 20-cv-06919 (N.D. Cal.)	Following AMG the parties stipulated, and on May 18, 2021 the Court issued an order, “dissolving the asset freeze entered in the Court’s October 6, 2020 Ex Parte Temporary Restraining Order.” On June 24, 2021, the FTC moved for summary judgment and a permanent injunction against Marc Grisham, but did not seek damages for violations of 13(b). On the same day, the FTC also moved for default judgment and a permanent injunction against the “defaulting defendants.” The defendants opposed the motions. No order has yet been issued.
FTC v. Electronic Payment Solutions of America, Inc., No. 17-02535 (D. Ariz.)	On April 26, 2021, defendants asked the Court in a Motion for Reconsideration “to reconsider its denial of [the] motion to dismiss the FTC’s monetary claim [] for consumer redress, disgorgement and restitution as set forth in the FTC’s first amended complaint.” On May 3, 2021, the FTC filed a Motion to Withdraw the pending Summary Judgment Motion, requesting the Court provide monetary relief through 13(b), due to AMG. On May 10, 2021, defendants filed a Motion for Reconsideration of the denial for a Judgment of the Pleadings based on the new authority provided by AMG. At a status conference on June 14, 2021, the judge ordered the FTC to file a response to this motion. On July 2, 2021, the FTC filed a response in opposition to the motion for reconsideration. In its response, the FTC notes that “[a]lthough the FTC concedes that AMG precludes its recovery of equitable monetary relief in this action, the language of AMG itself, as well as subsequent authority, make clear that the FTC is still entitled to injunctive relief …” On July 21, 2021, the Court issued an Order noting that the motion for summary judgment “will be dealt with in due course.”
FTC v. Elegant Solutions, Inc., No. 20-55766 (9th Cir.); No. 19-cv-01333 (C.D. Cal.)	While Ninth Circuit briefs had already been filed prior to AMG, the Ninth Circuit is requiring new briefing following AMG. Appellants filed their revised brief on June 1, 2021 in which they argue that the FTC does not have the authority to impose some of the remedies that the FTC has imposed. On July 30, 2021, the FTC filed its Answering Brief. For AMG related issues, the FTC argued that for a permanent injunction, it did not need to file an administrative complaint seeking the same relief, and that the court did not abuse its discretion in issuing an injunction. The FTC conceded that “the Supreme Court’s recent decision in AMG, holding that Section 13(b) does not authorize monetary relief, does not undermine this longstanding precedent regarding the availability of injunctive relief.”
FTC v. F&G International Group Holdings, LLC, No. 20-cv-73 (S.D. Ga.)	In a May 11, 2021 status report, the defendants stated their intent to file a dispositive motion striking the FTC’s claim for monetary relief following AMG. On May 20, 2021, the District Court stayed dispositive motions pending a settlement conference. On July 1, 2021, the stay was lifted.
FTC v. Facebook, Inc., No. 20-cv-03590 (D.D.C.)	On April 27, 2021, Facebook filed a notice of supplemental authority regarding AMG, arguing that, following the Supreme Court’s decision “the FTC lacks statutory authority to maintain its lawsuit in federal district court.” On May 3, 2021, the FTC filed a Response. The FTC’s response argues that the action is still appropriate because, the FTC asserts, Section 13(b) still empowers the FTC to seek a permanent injunction.” Of course, the statutory text only speaks of preliminary injunctive relief. On June 28, 2021 the court granted Facebook’s motion to dismiss and dismissed the complaint without prejudice. Section 13(b) was not a basis of the motion to dismiss, but the court did note that “an injunction under Section 13(b) is a theoretically available remedy in a Section 2 challenge to long-ago mergers…” On July 23, 2021, the Court granted the FTC’s motion for an extension of time to file an Amended Complaint, which is due to be filed before August 19, 2021.
FTC v. FleetCor Technologies, Inc., No. 19-cv-05727 (N.D. Ga.)	On May 17, 2021, defendants filed a partial motion for summary judgment, asserting that, following AMG, “the FTC is not entitled to relief on its claim for equitable monetary relief, and [] the FTC is not entitled to relief on its claim for prospective injunctive relief.” On June 18, 2021, the FTC filed its reply in support of its motion for summary judgment and opposition to defendant’s cross-motion for summary judgment. In the reply, the FTC does not seek monetary relief, only injunctive relief. On July 12, 2021, Defendants filed their reply brief, arguing that the FTC is not entitled to injunctive relief that that the FTC lacks authority to enjoin past conduct. No order has been issued.
FTC v. Golden Sunrise Nutraceutical, Inc., No. 20-cv-01060 (E.D. Cal.)	Despite AMG, on June 6, 2021 the parties entered a stipulation and proposed order, granting the FTC a permanent injunction and monetary remedies, pursuant to Sections 13(b) of the FTC Act and 15 U.S.C. § 53(b). On June 11, 2021, the district court entered the stipulated order.
FTC v. Hornbeam Special Situations, LLC, No. 17-cv-03094 (N.D. Ga.)	On April 22, 2021, the FTC filed a Notice with the Court of the AMG decision. On June 21, 2021, the court terminated without prejudice the motions for summary judgment. On July 2, 2021, the FTC filed a notice of supplemental authority re AMG, noting that “the FTC hereby provides notice to the Court and Defendants that it is not currently seeking equitable monetary relief under Section 13(b) of the FTC Act as to any defendant in this matter. However, the FTC continues to seek injunctive conduct relief under Section 13(b), as well as equitable monetary relief under Section 19…” Motions for summary judgment are to be filed before August 10, 2021.
FTC v. Innovative Designs, Inc., Nos. 20-3379 (3d Cir.); 16-cv-01669 (W.D. Pa.)	There have been no AMG-related filings on this docket.
FTC v. Noland, No. 20-cv-00047 (D. Ariz.)	There is a motion to lift the asset freeze pending due to AMG. On May 21, 2021, defendants filed a motion entitled “The Effect of AMG Capital on This Case.” In the filing, defendants stated, “The FTC’s wanton approach and this court’s complaisance approach has resulted in an illegal prejudgment attachment and dissipation of assets under the guise of equity. But it is a farce. This court was duped. The FTC’s unclean hands entitles it to nothing. Its complaint should be dismissed.” On May 28, 2021, the FTC filed a response to defendant’s memo calling it a “fanciful reading of AMG . . . untethered from its holding.” On June 1, 2021, proposed intervenors, who had previously been denied intervention, filed a motion to intervene saying they have been harmed by the FTCs unlawful reading of 13(b) as held by AMG and should thus be allowed to intervene. The FTC responded on June 4, 2021 calling the motion untimely and calls AMG “irrelevant” to the court’s prior ruling. On June 14, 2021, the proposed intervenors filed a reply reiterating that their motion is timely and that they are affected by the holding in AMG. On June 11, 2021, Defendants filed a Reply in Response to the Motion for Preliminary Injunction, noting that “Section 13 has always been the FTC’s focus in this case, even though this court recognized the FTC sought relief not found in the text of the FTCA.” On June 15, 2021, the Court issued an Order: “in the wake of the Supreme Court’s decision in AMG […], the Court issued an order requiring the parties to file a joint memorandum setting forth their views on ‘whether the asset freeze and receivership in this action should be modified or vacated in light of AMG Capital.’ After the parties filed their joint memorandum …, the Court held a hearing. IT IS SO ORDERED that the Court will take no action in response to the individual Defendants’ memorandum.” On June 23, 2021, the FTC filed a motion for summary judgment as to monetary remedies. The FTC did not base this motion on 13(b). A telephonic status conference was held on July 7, 2021. On June 30, 2021, defendants filed a Motion to Dismiss Case, Motion to Dissolve the Preliminary Injunction Order and Motion to Stay or Dismiss Section 13(b) Proceedings. Defendants argue that the FTC must first file an administrative complaint before seeking a TRO or preliminary injunction.
FTC v. Lending Club Corp., No. 18-cv-02454 (N.D. Cal.)	Following AMG the parties stipulated, and on May 14, 2021 the Magistrate Judge ordered, “that the demand for equitable monetary relief in the FTC’s First Amended Complaint should be stricken.” On June 10, 2021, the parties filed a case management statement in which they agreed that settlement discussions would now be more “fruitful” based on AMG’s holding. On July 7, 2021, the Court was notified that the parties “settled the case subject to the contingency of approval of the Commission.”
FTC v. Mail Tree Inc., No. 15-cv-61034 (S.D. Fla.)	On April 30, 2021, the FTC filed a Notice of Supplemental Authority informing the Court that, per AMG, 13(b) does not allow for monetary relief.
FTC v. Neora, LLC, No. 20-cv-01979 (N.D. Tex.)	On April 30, 2021, the FTC filed a Notice of Supplemental Authority informing the Court that, per AMG, 13(b) does not allow for monetary relief. On May 10, 2021, the FTC and defendants filed dueling statements contesting the breadth of AMG’s repercussions. On May 17, 2021, the defendants filed a Motion for Judgment on the Pleadings, arguing that the FTC cannot prevail now that it cannot obtain 13(b) monetary relief. That Motion is pending. On June 7, 2021, the FTC filed their response to the May 17th Motion, arguing that AMG only applies to a very narrow issue, and that Neora is trying to use the ruling to dismiss the entire case, when 13(b) still allows the FTC to bring cases in federal court to obtain injunctive relief. The FTC accused Neora of “doing violence to the language of the Supreme Court’s decision.” The FTC did agree to dismiss the claims for monetary restitution and disgorgement, directly acknowledging that AMG “currently prevents the FTC from recovering equitable monetary relief under Section 13(b) in this case.” On June 14, 2021, defendants filed a Motion for a Protective Order and a Motion to Quash a Subpoena, arguing that per the holding in AMG, the FTC cannot look at past conduct and prescribe retrospective relief, they can only provide relief for future actions. On June 29, 2021, the Court set the motion hearing for judgment on the pleadings for July 16, 2021. On July 1, 2021, defendants filed a notice of supplemental authority, noting that the United States District Court for the District of Columbia in FTC v. Facebook, Inc., held that the FTC may not seek injunctive relief in federal courts under Section 13(b) of the FTC Act for long-past conduct without some evidence that the defendant is committing or is about to commit another violation. On August 2, 2021, the Court issued an Order on the Motion for Judgment on the Pleadings. The motion was granted in part and denied in part. The Court noted, “in light of the unambiguous pronouncement from the Supreme Court in AMG Capital regarding the unavailability of monetary relief under § 13(b), Defendants’ Motion as to FTC’s claim for monetary relief is granted. The remainder of Defendants’ Motion is denied.” The Court was not persuaded that the FTC needed to file an administrative proceeding before obtaining a preliminary injunction.
FTC v. Netforce Seminars, No. 00-cv-02260 (D. Ariz.)	On May 4, 2021 FTC filed an unopposed Motion to extend the summary judgment briefing schedule in light of AMG, explaining “that the priority for all parties is to address the continuing application of the Preliminary Injunction in light of AMG.” That Motion was granted. The FTC’s Summary Judgment Motion is due on June 23, 2021. On June 23, 2021, the FTC filed a motion for sanctions for contempt, alleging that the defendants violated the Final Order (by not tracking consumer complaints, discouraging consumer complaints, not responding to consumer complaints, and not investigating consumer complaints), and are in contempt of the Final Order by running prohibited marketing schemes, and misrepresenting potential income to consumers.
FTC v. Nudge LLC, No. 19-cv-00867 (D. Utah)	On May 5, 2021, the defendants filed a partial Summary Judgment Motion in light of AMG. The defendants asked the court to rule that the FTC “is not entitled to equitable monetary relief under Section 13(b) of the FTC Act.” The motion remains pending. On June 2, 2021, the FTC filed a non-opposition response to Nudge’s May 5th Motion for partial summary judgment, noting that it does not oppose Nudge’s Motion “to the extent it requests ‘an order stating that the FTC is not entitled to any equitable monetary relief under Section 13(b)’ of the FTC Act.” The hearing on the motions was held on July 9, 2021. FTC’s motion for partial summary judgment and the cross motion for partial summary judgment by defendants were both denied. On July 26, 2021, the Court issued an Order denying the Motion to Dismiss for failure to state a claim, nothing that the complaint adequately alleges a Telemarketing and Consumer Fraud and Abuse Prevention Act claim. The Order makes no mention of Section 13(b).
FTC v. Publishers Business Services, Inc., No. 19-507 (S. Ct.); Nos. 17-15600; 11-17270 (9th Cir.); No. 08-cv-00620 (D. Nev.)	The case was remanded from the Supreme Court to the Ninth Circuit in light of AMG. The case is currently pending before the Ninth Circuit. On June 4, 2021, the FTC sent a letter to the 9th Circuit explaining that it sought money under Section 19 as well as Section 13(b), so AMG does not affect them and that Publishers Business Services already waived their 13(b) challenge. On June 9, 2021, defendants responded saying they did not waive this claim and argued that the FTC actually waived any §19 claim because they stopped arguing that. On June 10, 2021, the 9th Circuit affirmed the District Court’s order that granted the permanent injunction, and vacated the District Court’s order that awarded equitable monetary relief under Section 13(b).
FTC v. Quincy Bioscience Holding Co., No. 17-cv-00124 (S.D.N.Y.)	On April 27, 2021, defendants filed a letter requesting “a pre-motion conference concerning Defendants’ anticipated motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) dismissing with prejudice plaintiff the [FTC’s] request for monetary relief.” On May 10, 2021, the FTC filed a response, claiming that judgment on the pleadings would be premature, because “Congress is considering changes to the Federal Trade Commission Act in response to AMG Capital.” On May 11, 2021, defendants filed a reply, explaining that the FTC’s “speculative hope that the House and Senate may agree upon and pass legislation, at some unspecified future time” is an insufficient basis to delay ruling.
FTC v. QYK Brands, LLC, No. 20-cv-1431 (C.D. Cal.)	The parties stipulated to allow the FTC to amend its complaint shortly following AMG, presumably so the FTC could include an alternative basis for monetary relief. The district court granted the FTC’s request on May 18. On May 19, the FTC filed an Amended Complaint, striking all requests for 13(b) monetary relief, and instead requesting monetary relief pursuant to the FTC’s Trade Regulation Rule Concerning the Sale of Mail, Internet, or Telephone Order Merchandise (“MITOR”). On June 23, 2021, Defendants filed a motion to dismiss each of the FTC’s claims, stating: “On April 22, 2021, the Supreme Court published AMG …, which significantly limits the FTC’s ability to obtain damages. Defendants move to dismiss all the FTC’s claims on the grounds that (1) the FTC is not entitled to monetary relief…”
FTC v. Ragingbull.com, LLC, No. 20-cv-3538 (D. Md.)	The FTC filed a motion to stay the case in order to obtain approval to file an Amended Complaint, in order to file new claims to stand in for the current 13(b) claims. That motion was granted on April 30. On May 18, in a related filing, the FTC conceded that it chose to voluntary dismiss a number of defendants because the “FTC no longer has the ability to recover those assets as equitable monetary relief under Section 13(b) of the FTC Act, due to the Supreme Court’s decision in AMG.” On June 11, 2021, the FTC filed a motion for leave to file an amended complaint. This amended complaint could “remove the FTC’s request for equitable monetary relief under Section 13(b) of the FTC Act, in light of the Supreme Court’s recent decision in AMG Capital…” Responses in opposition and replies by the FTC have been filed. That motion is still pending and an amended complaint has not yet been filed.
FTC v. RCG Advances LLC, No. 20-cv-04432 (S.D.N.Y.)	On May 10, 2021, the defendants wrote to the Court requesting the Court set a settlement conference in light of AMG. Defendants averred that as part of a settlement, they “will agree to the issuance of a permanent injunction preventing any future violations of the FTC Act as well as paying the amount of all costs accrued in favor of the Plaintiff to date.” On May 11, 2021, the FTC filed a responsive letter, stating its intention to file an Amended Complaint replacing the prior requested 13(b) monetary relief with a new “claim and seek civil penalties for Defendants’ violations of Section 521 of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6821.” On May 14, 2021, the FTC filed a Motion for Leave to file the aforementioned Amended Complaint. On June 10, 2021, the FTC filed an Amended Complaint where it seeks to bring monetary penalties and a permanent injunction under Sections 5(a), 5(m)(1)(A), 13(b), 16(a), and 19 of the FTC Act, 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 56(a), and 57b, and Section 522(a) of the Gramm-Leach-Bliley Act, 15 U.S.C. §6822(a). On June 18, 2021, defendant Ram Capital Funding, LLC, filed its Answer to the Amended Complaint. On June 23, 2021, RCG Advances, LLC and other defendants filed their Answer to the Amended Complaint. On July 8, 2021, the FTC filed a motion to strike defendants’ affirmative defenses.
FTC v. Simple Health Plans LLC, No. 18-cv-62593 (S.D. Fla.)	On April 22, 2021, one of the individual defendants filed an Emergency Motion to Dissolve the Preliminary Injunction, due to the Supreme Court’s ruling in AMG. The defendant followed up with two notices of supplemental authority, on April 28 and 30, referencing other lower court cases dissolving preliminary injunctions following AMG. The FTC filed a response to the Motion on April 30, 2021, arguing that the Motion was not ripe and that the FTC still had Section 19 authority. A hearing on the Motion took place on May 14, 2021. The Motion remains pending. On June 10, 2021, defendants filed a response to an order of supplemental briefing regarding AMG and their April 22 Motion to Dissolve. They argued that the situation in AMG is analogous to their situation. The FTC also filed its response, in which it argued that the Agency retains the power to issue preliminary injunctive relief under Section 19 of the Act.
FTC v. SPM Thermo-Shield, Inc., No. 20-cv-542 (M.D. Fla.)	On May 14, 2021, the defendants filed a Motion to Dismiss the FTC’s claims for equitable monetary relief, due to AMG. The Motion remains pending. On May 24, 2021, the FTC filed a response to the Motion to Dismiss, in which the FTC states: “In AMG, the U.S. Supreme Court addressed the narrow question of whether Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), authorized retrospective monetary relief. The Court held that Section 13(b) did not authorize such relief. Slip op. at 1, 14. At this time, in light of the AMG decision, the FTC does not seek such relief.” On May 26, 2021 the court granted SPM’s Motion to Dismiss on all parts relating to AMG. On June 2, 2021, the FTC filed its First Amended Complaint for permanent injunction and other equitable relief., but kept their claim under Section 13(b). On June 2, 2021, the FTC filed an Amended Complaint. In the Amended Complaint, the FTC asks only for injunctive relief under Section 13(b). On June 16, 2021, defendant filed its Answer and affirmative defenses to the Amended Complaint. The FTC notes that it brought claims under other statutes, which entitle it to relief.
FTC v. Supergooddeals.com, Inc., No. 20-cv-3027 (E.D.N.Y.)	There have been no AMG-related filings on this docket.
FTC v. Superior Products International II, Inc., No. 20-cv-2366 (D. Kans.)	On May 6, 2021, defendants filed a motion to dismiss FTC’s request for equitable monetary relief in light of AMG. On May 10, 2021, the FTC withdrew its request for equitable monetary relief, and informed the Court of its intent to seek leave to file an Amended Complaint seeking monetary relief on other grounds. On June 9, 2021, the Court found the defendants’ motion to dismiss moot due to the FTC’s withdrawal of claims regarding monetary relief under 13(b). On June 22, the FTC filed a motion and memorandum in support of its motion for leave to Amend Complaint. Oral argument on the motion for leave to Amend Complaint is set for August 23, 2021. The proposed Amended Complaint includes allegations under multiple federal statutes (not only 13(b)), and the FTC still seeks monetary relief.
FTC v. Surescripts, LLC, 19-cv-01080 (D.D.C.)	On May 14, 2021, the parties filed a joint stipulation, stating that, due to AMG, the FTC withdraws its request for equitable monetary relief under 13(b). The Court adopted the stipulation on May 17, 2021.
FTC v. Unknown Parties Deceiving Consumers, No. 20-cv-2494 (N.D. Ohio)	There have been no AMG-related filings on this docket.
FTC v. ZAAPPAAZ, LLC, No. 20-cv-2717 (S.D. Tex.)	There have been no AMG-related filings on this docket.

The ripple effects continue from the Supreme Court’s holding in AMG Capital Management, LLC v. FTC, explaining that Section 13(b) of the FTC Act does not allow (and never did allow) monetary remedies.

In some cases, the FTC has stricken equitable monetary remedies entirely by removing those requests for relief in amended complaints. In others, the FTC is attempting to retain its request for monetary relief by newly tying it to another statutory provision. In still others, the Agency has requested that courts ignore AMG, because Congress may, at some unspecified future date, amend the statute.

Latest update follows.

Summer associate Darby Hobbs contributed to this article. Ms. Hobbs is not a practicing attorney and worked under the supervision of principals of the firm who are members of the D.C. Bar.

* * *

Subscribe here to Kelley Drye’s Ad Law Access blog and here for our Ad Law News and Views newsletter. Visit the Advertising and Privacy Law Resource Center for update information on key legal topics relevant to advertising and marketing, privacy, data security, and consumer product safety and labeling.

Follow us on LinkedIn and Twitter for the latest updates.

As we’ve described previously, H.R. 2668, the Consumer Protection and Recovery Act, authored by Representative Tony Cárdenas (D-CA), would explicitly authorize the FTC to seek permanent injunctions and other equitable relief, including restitution and disgorgement, to redress perceived consumer injury. The subcommittee reported H.R. 2668 largely unchanged, save for a substitute amendment from Representative Cárdenas making minor changes to the bill. At the outset, subcommittee Democrats defeated two Republican motions to postpone consideration of the bill. Democrats subsequently voted down two Republican amendments: one delaying enactment of the bill until the FTC certifies that a 2003 policy statement on disgorgement in competition cases is more broadly applicable; and one prohibiting the Commission from seeking disgorgement unless it has conducted an economic analysis. Republicans also “offered and withdrew” an amendment to reduce the legislation’s proposed statute of limitations from 10 to five years.

Beyond 13(b)-specific guardrails, Republicans – including Subcommittee Ranking Member Gus Bilirakis (R-FL) – voiced their intent to address the agency’s 13(b) authority as part of a more holistic FTC policy revamp, including the establishment of a national privacy framework. To that end, another handful of Republican amendments – many dealing with FTC authorities beyond 13(b) – were offered and withdrawn.

Whether Rep. Cárdenas and his Democratic colleagues can assuage Republican concerns and arrive at a bipartisan solution remains to be seen. Notably, the bill must still be approved by the full Energy and Commerce Committee before receiving a vote in the House. And, as we’ve reported, the Senate is working on a legislative framework of its own, meaning the two versions may need to be reconciled prior to enactment. While Energy and Commerce Democrats and FTC Acting Chair Rebecca Slaughter continue to stress the urgency of the situation, a new law clarifying 13(b) is – at best – likely months away. Today, it’s still just a bill sitting here on Capitol Hill.

* * *

Subscribe here to Kelley Drye’s Ad Law Access blog and here for our Ad Law News and Views newsletter. Visit the Advertising and Privacy Law Resource Center for update information on key legal topics relevant to advertising and marketing, privacy, data security, and consumer product safety and labeling.

Kelley Drye attorneys and industry experts provide timely insights on legal and regulatory issues that impact your business. Our thought leaders keep you updated through advisories and articles, blogs, newsletters, podcasts and resource centers. Sign up here to receive our email communications tailored to your interests.

Follow us on LinkedIn and Twitter for the latest updates.

Last Month, in AMG Capital Management, LLC v. FTC, the Supreme Court ruled that Section 13(b) of the FTC Act does not allow for monetary remedies. While the importance of this ruling is plain, its implications are only now becoming more clear. Just yesterday, for example, in FTC v. Cardiff, a California federal court found the FTC liable to pay all of the Receiver’s fees from the date of the AMG ruling going forward. The Court explained that it would be inequitable for the defendants to pay these fees, now that the Supreme Court has clarified that the 13(b) relief provided only allowed for an injunction.

This is the first instance we know of where the FTC has been required to pay a Receiver’s fees during the pendency of a 13(b) injunction.

As we’ve discussed in earlier posts, the FTC has asked Congress to rewrite the statute in a way that would allow it to unambiguously go straight to Federal Court to obtain money judgments. For now, however, the FTC can no longer rely on Section 13(b) to provide anything other than injunctive relief. As Cardiff illustrates, this will mean different things in the dozens of enforcement actions that are presently pending.

The following table summarizes relevant post-AMG action in these cases. Our team will provide periodic updates.

* * *

Subscribe here to Kelley Drye’s Ad Law Access blog and here for our Ad Law News and Views newsletter. Visit the Advertising and Privacy Law Resource Center for update information on key legal topics relevant to advertising and marketing, privacy, data security, and consumer product safety and labeling.

Kelley Drye attorneys and industry experts provide timely insights on legal and regulatory issues that impact your business. Our thought leaders keep you updated through advisories and articles, blogs, newsletters, podcasts and resource centers. Sign up here to receive our email communications tailored to your interests.

Follow us on LinkedIn and Twitter for the latest updates.

The Chamber’s letter noted that the legislative history of the FTC Act requires the Commission to use Section 19’s administrative processes to obtain monetary relief for past violations. There is no reason that Congress should provide the FTC with additional powers, according to the Chamber, when the FTC already has an avenue to seek monetary relief.

The Chamber’s argument here largely mimics the position of Justice Breyer, who authored the AMG decision from a unanimous Court, concluding that the current version of 13(b) does not allow monetary relief. In AMG, Justice Breyer explained that “[t]he Commission may obtain monetary relief by first invoking its administrative procedures and then § 19’s redress provisions (which include limitations) . . . By contrast, the Commission’s broad reading would allow it to use §13(b) as a substitute for §5 and §19.”

The Chamber’s letter urged Congress not to upset the fine balance the FTC Act originally envisioned. While the Chamber agreed that the FTC should be able to go immediately to Court “to seek appropriate equitable monetary relief for clearly fraudulent cases that are found to be in violation of the law,” it explained that “[m]onetary relief should not be available for every consumer protection violation but should be reserved for the most egregious types of cases.”

Last week, FTC Acting Chairwoman Rebecca Slaughter responded with a letter of her own. The Acting Chairwoman presented her view that “the Chamber’s position is based on a fundamental misunderstanding of the history and function of Section 13(b).” In order to prove her point, Acting Chair Slaughter restates arguments the AMG Court rejected four weeks ago.

The letter argued that “Congress never intended” to limit the statute to its plain language, and that Congress should therefore broaden that plain language now. But FTC counsel made the exact same argument to the Supreme Court in AMG, and the Court addressed and rejected it. See AMG, at 13 (“The Commission first points to amendments that Congress made to the Act in 1994. Those two amendments, however, simply revised §13(b)’s venue, joinder, and service rules, not its remedial provisions. They tell us nothing about the words ‘permanent injunction’ in §13(b).”).

The letter also asserted that a new Section 13(b) should allow the FTC to pursue monetary remedies for past action, stating, “[a]s the Chamber would have it, the Commission should be powerless to do anything if the defendant stopped making sales before the Commission sued.” Of course, this argument ignores the FTC’s authority under Section 19; an absence made all the more noticeable, as the Chamber’s letter focused on the FTC’s ongoing “statutory authority under Section 19.”

It is hoped that Congress will carefully consider whether Section 19 can be an appropriate alternative in certain types of cases, and look critically at all the talk about how AMG is a victory for scammers at the expense of consumers. While this may be true in some cases, it is not true in cases that do not involve scammers -- where there is a legitimate, good faith disagreement whether a claim has been properly substantiated or a material limitation clearly and conspicuously disclosed. How can we truly know whether cases such as these can be effectively litigated administratively, as Congress intended and the Supreme Court affirmed in its decision, until we try?

Yes, there are concerns about the Section 19 process. Timing, for one. But the Commission has taken steps to speed up its administrative litigation, and it is not likely that the glacial pace of a case like Figgie would be repeated. And while the FTC is correct that there is not a whole lot of law that would explain what exactly is “dishonest or fraudulent” conduct, the dearth of cases presents an opportunity to flesh out exactly what is meant by this standard. In any event, it feels questionable to complain about the lack of cases when the Agency has largely chosen to ignore administrative litigation in consumer protection cases over the past 40 years. To paraphrase Ruby Thewes in Cold Mountain, you can’t bring the clouds and complain about the rain.

The weeks ahead will determine whether the Acting Chair’s or the Chamber’s position will hold, and it will be up to Congress to act (or not to act). Congress will have to decide whether the FTC should be able to use Section 13(b) to pursue “monetary and injunctive relief for all violations, whether past, ongoing, or imminent,” as the Acting Chair would have it, or whether, as the Chamber envisions, the monetary power of 13(b) should extend only to “clearly fraudulent cases that are found to be in violation of the law.”

* * *

Kelley Drye attorneys and industry experts provide timely insights on legal and regulatory issues that impact your business. Our thought leaders keep you updated through advisories and articles, blogs, newsletters, podcasts and resource centers. Sign up here to receive our email communications tailored to your interests.

Follow us on LinkedIn and Twitter for the latest updates.

* * *

While the official line is that the FTC does not lobby Congress, the Agency is making its preferences known. In the words of Acting Chairwoman Rebecca Kelly Slaughter:

In AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior. . . . With this ruling, the Court has deprived the FTC of the strongest tool we had to help consumers when they need it most. We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.

Putting aside issues with this characterization, there can be no doubt that the FTC is actively and aggressively seeking explicit allowance of monetary remedies. But the possibility of a legislatively revitalized Section 13(b) in the near future raises some big questions. Here’s one: if Congress amends Section 13(b) to explicitly allow for monetary remedies, would the FTC be able to use the new legislative language to pursue monetary remedies against companies whose alleged wrongful actions pre-dated the statutory change? For defendants in the approximately 75 pending federal court cases alleging Section 13(b) violations, this is a very important question.

Without a clear statutory provision providing for retroactive liability, it is highly unlikely that the courts would allow the FTC to use the new statutory language to “look back” at actions committed prior to the newly enacted legislation’s codification date. The Supreme Court has repeatedly affirmed that, in the absence of a clear statutory intent, there is a generally applicable presumption against retroactivity, in which courts “presume that the [new] statute does not apply to [prior] conduct.” Martin v. Hadix, 527 U.S. 343, 352 (1999). The Supreme Court has raised serious Constitutional concerns regarding the retroactive imposition of burdens or obligations on parties based on newly enacted statutory provisions. Due to those concerns, in 1994, the Supreme Court in Landgraf v. USI Film Prods, 511 U.S. 244, established a two-part test to determine whether new statutory language may apply retroactively.

Under the Landgraf test, courts first look to see if the statute facially applies retroactively. If the statute is silent as to its retroactive reach, the court must examine whether the statute’s retroactive application “takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transactions or considerations already past.” Id. at 269.

The Landgraf Court specifically referenced “a statute introducing damages liability” as the type of statute that courts should not apply retroactively. Id. at 285 n. 37. The point of any new Section 13(b) would, of course, be to do just that, introducing new “damages liability” for conduct that previously would only have occasioned injunctive relief.

Parties currently at odds with the FTC over past practices can take some comfort in the Supreme Court’s language in Landgraf. If Congress amends the statute and does not include an express retroactive provision, parties arguing that the new law should not apply to their past conduct will have the better argument.

The question becomes more thorny if the new legislative language explicitly calls for retroactive applicability, which the House bill introduced by Representative Tony Cardenas (D-CA) expressly does. But, if Representative Cardenas’s proposed expansive language is adopted, while the statute’s text would be clear as to retroactivity, its constitutionality would not be. Even where a retroactivity provision is expressly incorporated in a statute, the Supreme Court in Landgraf explained that the Constitution’s “Due Process Clause [] protects the interests in fair notice and repose that may be compromised by retroactive legislation.” Id. at 266.

While any retroactive statutory changes would implicate due process, imposing monetary penalties retroactively is arguably the clearer Due Process violation, because the legislative change directly implicates a taking of property without due process. The Supreme Court's dictum that "a justification sufficient to validate a statute's prospective application under the [Due Process] Clause may not suffice to warrant its retroactive application" should be applicable in this instance. See Landgraf, 511 U.S. at 266. In the face of this due process challenge, the FTC will likely be required to show that a company was on "notice" that there may have been a monetary obligation for the conduct at issue when the conduct occurred.

Of course, the FTC will argue that, when the conduct occurred, there had been 40 years of case law in their favor, which put companies that are currently litigating under Section 13(b) on notice. This argument is not as strong as it seems at first glance. Can a company be on notice when the plain language of the statute does not allow for monetary remedies? Aren’t companies entitled to rely on the plain language of the statute as interpreted by the highest court in the land, notwithstanding that lower courts have gotten it wrong for decades? This is an issue that will be front and center for companies currently in litigation with the FTC under Section 13(b).

And while the outcome of any such constitutional challenge may be unclear, what is clear is that any legislation purporting to retroactively establish monetary liability, when the Supreme Court in AMG so clearly held that the prior statutory language could not establish such liability, will be challenged. Thus, while AMG clarified the current ambit of 13(b), the role of the courts in establishing the contours of a future 13(b) is likely far from over.

Of course, the constitutional issue posed by retroactivity will not ripen without a revised Section 13(b); as any congressional observer should know, new legislation is uncertain. From Politico this morning:

An aide for Republicans on the House Energy and Commerce Committee signaled there’s already some partisan bickering over the upcoming hearing and how to address the [13(b)] issue through legislation. "A 9-0 vote by the Supreme Court sends a clear signal that the FTC did not use their authorities in the most effective means to seek restitution,” the aide said. “It is unfortunate when Committee Democrats will not let all commissioners appear before the Energy and Commerce Committee to discuss a consensus solution."

* * *

The facts of AMG are straightforward. Scott Tucker was the owner of a single-proprietor business, AMG Capital Management. The business’s sole function was to provide payday loans. The FTC sued Scott Tucker, the owner of AMG, under Section 13(b) of the Act, asserting that the terms disclosed in the loan notes AMG provided to consumers did not reflect the harsher terms that Tucker actually enforced. The district court found Tucker liable, and pursuant to Section 13(b), levied a staggering $1.27 billion in equitable monetary relief to be paid by Tucker to the Commission. Tucker appealed this ruling to the Ninth Circuit. Tucker’s primary argument on appeal was that Section 13(b) forecloses monetary relief. The Ninth Circuit affirmed, and AMG’s petition to the Supreme Court on this issue was granted.

While some of the Justices at oral argument—particularly Justice Barrett and Alito—seemed concerned that reversing the Ninth Circuit’s judgment would provide an undeserved windfall to Tucker, a clear majority of the Court was more focused on the FTC’s broad interpretation of the statutory text. Justice Kavanaugh expressed the problem clearly and succinctly, when he stated to FTC counsel that, although he felt sympathy for the FTC’s concern with stemming bad actors, a regulatory agency is bound by its statutory mission. In Justice Kavanaugh’s words, “It seems the problem you have is the text.”

Although FTC counsel argued that prior case law from the nineteenth century allowed monetary equitable relief along with injunctive relief, Justice Roberts pointed out that those cases largely involved courts using their inherent equitable powers. An executive agency, by contrast, only retains equitable powers to the extent it is given them by statute. And while FTC counsel argued that the legislative intent when Section 13(b) was codified was to imbue it with broad equitable powers, AMG’s counsel effectively rebutted that argument, explaining that the best “way we determine Congress’s intent is by looking at the words on the page.”

While nothing is certain until a final decision is rendered, following oral arguments it seems even more likely that Section 13(b) of the FTC Act will be limited to its plain terms, allowing the FTC to use the statutory provision to obtain injunctive relief in court, and only that. As multiple Justices noted, Section 19 and Section 5(l) of the Act provide alternative avenues for relief. While Section 13(b) may be a more efficient method for the FTC to obtain monetary remedies, the majority of the Justices at oral argument signaled that efficiency alone is not a sufficient basis for imbuing an agency with such a powerful remedy.

All is not lost for the FTC. Again, here, Justice Kavanaugh led the way with a proposed solution for the Agency, when he asked, “Why isn’t the answer here for the Agency to seek this new authority from Congress for us to maintain a principle of separation of powers?” With a new Congress about to be seated and proposed language that would amend Section 13(b) floating around the Hill, congressional clarification very well might be the FTC’s best path forward.

Under Section 19 of the FTC Act, the FTC can pursue consumer redress for alleged unfair or deceptive practices, but first must file administratively for an order directing the target of the investigation to cease and desist from the allegedly unfair or deceptive practices and, if the order is challenged, go through several rounds of review—first by the Commission and then by the United States Court of Appeals. Only after the Commission’s order becomes final can the FTC commence the Section 19 action in district court for consumer redress. That action, of course, is still subject to the typical federal appellate process—which can make a Section 19 action an extremely time-consuming process.

F.T.C. v. Figgie International, Inc. provides an example of how Section 19 would work, as well as its limitations. In Figgie, the FTC obtained a cease and desist order under Section 5 ordering Figgie to cease and desist from engaging in the unfair or deceptive practices it used to market its Vanguard heat detector products. According to the FTC, “[t]he crux of Figgie’s message was that heat detectors could be relied on as life-saving fire warning devices, and that the best protection for one’s home is a combination of four or five heat detectors to one smoke detector.”

Following the administrative proceeding, the Administrative Law Judge concluded that every one of Figgie’s promotional materials “‘clearly conveys’ the claim that Vanguard heat detectors provide the necessary warning to allow safe escape from a residential fire.” The promotional materials also discussed the National Fire Prevention Association (“NFPA”) standards “‘in such a way as to leave the reader with a distinct impression that [the NFPA] regards both smoke detectors and heat detectors as equally effective.’” However, while the NFPA previously recommended using both smoke and heat detectors as part of a household fire warning system, after fire prevention experts conducted a series of tests that illustrated the limitations of heat detectors, the NFPA revised its standards to require only that smoke detectors (not heat detectors) be installed on each level of the home and outside each bedroom.

After an administrative trial, the ALJ found that Figgie knew of the changes in the NFPA standards and the limitations of heat detectors prior to making the challenged representations. The ALJ found that Figgie’s representations were “misleading and deceptive in the absence of an explanation of the limits of heat detectors and the comparative superiority of smoke detectors.” On appeal, the Commission upheld most of the ALJ’s findings and conclusions, but changed the disclaimer required on Figgie’s heat detectors. The rest of the Commission’s cease and desist order “closely tracked the ALJ’s order” and prohibited Figgie from representing that heat detectors provide the necessary warning to permit safe escape from most residential fires, that combining heat detectors and smoke detectors provide greater warning than smoke detectors alone, and that Figgie may not misrepresent the capabilities of heat detectors to provide warning that would permit people to escape from residential fires.

After the cease and desist order became final (following an appeal to the Fourth Circuit Court of Appeals), the FTC filed an action pursuant to Section 19 in U.S. District Court for the Central District of California seeking consumer redress. The FTC was awarded summary judgment by the district court, which found Figgie engaged in dishonest or fraudulent practices and awarded millions of dollars in consumer redress.

Of note, prior to summary judgment the district court granted the FTC’s “motion to deem ‘conclusive’” the list of 42 findings from the administrative proceeding. That is because in a Section 19 proceeding, the Commission’s findings of material fact in support of a cease and desist order “shall be conclusive.” On appeal, the Ninth Circuit noted that [t]he Commission’s findings, and those of the administrative law judge which the Commission adopted, are accordingly treated as established facts for purposes of this decision.” Thus, to the extent that a district court’s findings deviate from the findings of the Commission, “the Commission’s findings control.”

The Ninth Circuit decision noted that “liability for past conduct would be imposed on Figgie if a reasonable person would have known in the circumstances that it was dishonest or fraudulent for Figgie to use the practices it did to sell heat detectors.” In rejecting Figgie’s argument that actual knowledge was required, the Court noted that “Congress unambiguously referred the district court to the statement of mind of a hypothetical reasonable person, not the knowledge of the defendant. The standard is objective, not subjective.”

Moreover, while the Ninth Circuit stated that “Section 19 liability must not be a rubber stamp of Section 5 liability,” it held that “[w]hen the findings of the Commission in respect to defendant’s practices are such that a reasonable person would know that the defendant’s practices were dishonest or fraudulent, the district [court] need not engage in further fact finding other than to make the ultimate determination that a reasonable person would know.” The Figgie action, it held, was such a case, because it found there is “ample evidence in the Commission’s findings to satisfy a court that a reasonable person with Figgie’s access to the scientific data establishing the relative inferiority of heat detectors would have known that Figgie’s vigorous misrepresentations on their behalf were dishonest and fraudulent.”

And while the ALJ acknowledged “a debate among fire professionals” concerning the tenability limits of heat detectors, the Ninth Circuit relied on findings that “[a] consensus among experts, well supported by careful testing, established that smoke detectors almost always provide earlier warning than heat detectors, and Figgie had no basis for doubting the truth of the consensus, yet Figgie marketed its heat detectors in a manner designed to mislead consumers about this critical information.” Hence, the conduct was deemed dishonest or fraudulent.

As Figgie demonstrates, the ALJ’s findings of fact almost certainly will be conclusive and, if appealed to the Commission, they are likely to be adopted. The Commission, after all, is the entity that authorized the issuance of the administrative complaint that precipitated the Section 19 action in the first place. All of this underscores how important it is to contest any underlying facts that may ultimately be considered to bear on whether the challenged conduct was dishonest or fraudulent.

Figgie seems to suggest a plausible alternative, if things don’t break the Commission’s way in AMG Capital Management. If that is the case, then why haven’t we seen more Section 19(b) cases over the years? One answer is undoubtedly the success of the Section 13(b) program. Why engage in administrative litigation, without the possibility of consumer redress absent a showing of dishonest and fraudulent conduct? This has undoubtedly led to the ALJ becoming a version of the Maytag repairman, with relatively few cases to manage.

But it is not just the money, it is the requirement that the Commission establish that the conduct was dishonest and fraudulent – no small task – and timing too. Section 19 cases, as they have historically been conducted, take a very long time. Consider that the FTC issued its administrative complaint against Figgie in May 1983, the ALJ issued his findings of facts in October 1984, and the decision was appealed to the full Commission and substantially adopted in April 1986. Figgie then appealed the Commission’s Order to the U.S. Court of Appeals for the Fourth Circuit, where it was ultimately upheld in 1987. By the time that the Ninth Circuit issued its decision on appeal from the Section 19 district court action and the petition for certiorari to the Supreme Court was denied in early 1994, more than a decade had passed since the issuance of the FTC’s administrative complaint.

Last week, all five FTC Commissioners – Chairman Joseph Simons (R), and Commissioners Christine Wilson (R), Noah Phillips (R), Rebecca Slaughter (D), and Rohit Chopra (D) – sent a letter to the Chairs and Ranking Minority members of the Senate Commerce and House Energy & Commerce Committees urging the Committees to pass legislation that would “restore Section 13(b) to the way it has operated for four decades.” The full letter appears here. Its most salient paragraph:

Without congressional action, the Commission’s ability to use Section 13(b) to provide refunds to consumer victims and to enjoin illegal activity is severely threatened. As explained below, courts of appeals in the Third and Seventh Circuits have recently ruled that the agency cannot obtain any monetary relief under Section 13(b). Although review in the Supreme Court is pending, these lower court decisions are already inhibiting our ability to obtain monetary relief under 13(b). Not only do these decisions already prevent us from obtaining redress for consumers in the circuits where they issued, prospective defendants are routinely invoking them in refusing to settle cases with agreed-upon redress payments. Moreover, defendants in our law enforcement actions pending in other circuits are seeking to expand the rulings to those circuits and taking steps to delay litigation in anticipation of a potential Supreme Court ruling that would allow them to escape liability for any monetary relief caused by their unlawful conduct. This is a significant impediment to the agency’s effectiveness, its ability to provide redress to consumer victims, and its ability to prevent entities who violate the law from profiting from their wrongdoing. Accordingly, it is imperative that Congress act quickly so that the FTC can continue to effectively protect American consumers.

On a related note, yesterday Commissioner Rohit Chopra and his Attorney Advisor Samuel A.A. Levine released a paper entitled “The Case for Resurrecting the FTC Act’s Penalty Offense Authority." In it, Commissioner Chopra and Mr. Levine contend that the Commission should “resurrect one of the key authorities it abandoned in the 1980s: Section 5(m)(1)(B) of the FTC Act, the Penalty Offense Authority.” The Penalty Offense Authority allows the Commission to formally declare a practice as unfair or deceptive in a cease-and-desist order, rendering that practice a “Penalty Offense.” Companies (or individuals) that later engage in that practice, with knowledge, would be subject to stiff financial penalties.

For more information on the FTC and other topics, see:

• John Villafranco
  • Bio
  • LinkedIn
• Advertising and Privacy Law Resource Center
• Ad Law News and Views Newsletter
• Ad Law Access Blog
• Advertising Law Practice Page

Specifically, Section 403 of the bill, as introduced, would clarify the FTC’s ability under Section 13(b) of the FTC Act to obtain monetary remedies for consumers. The provision comes in response to numerous agency requests for Congressional action on 13(b) following ongoing legal challenges to the scope of its authority.

While the SAFE DATA Act – or any privacy legislation, for that matter – faces long odds for passage in the waning days of the 116^th Congress, the bill lays the groundwork for further action in 2021.

Additionally, it is worth noting that while Congressional Republicans and Democrats remain at odds on the path forward for comprehensive privacy legislation, there may be bipartisan support for a 13(b) fix. During a Senate Commerce Committee hearing on privacy legislation earlier today, Ranking Member Maria Cantwell (D-WA) suggested that the “core mission of the FTC would be crippled” without the authority to obtain monetary relief under Section 13(b). Later this fall, the Supreme Court will hear argument on the issue with a ruling expected this spring. The implications of that ruling could inspire a legislative response.

Stay tuned for more installments of the “Section 13 (b)log.”

For more information on the FTC and other topics, visit:

• Advertising and Privacy Law Resource Center
• Ad Law Access Blog
• Ad Law News and Views Newsletter
  • Back to School Edition out now

In its LendingClub complaint, the FTC had sought substantial monetary relief from LendingClub pursuant to its authority under Section 13(b), in the form of “rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies.” The trial in LendingClub had been scheduled for October. In finding a stay of that trial warranted, the LendingClub court emphasized that the FTC’s authority to seek monetary relief under Section 13(b) (or lack thereof) is “an issue of enormous consequence to this case.” The court explained, “[g]oing forward with trial would needlessly burden LendingClub to put on a trial defense only to possibly have the entire enterprise mooted by the FTC’s inability to seek any monetary relief under Section 13(b).”

The FTC had argued that the hardship of presenting a meritorious defense while the Supreme Court’s 13(b) decision was pending did not merit a stay. The LendingClub court soundly rejected the FTC’s argument, finding that the issue was not simply about hardship, but about “the viability of the remedy motivating the case.” Given that the remedy itself has the potential to be extinguished in the coming months, the court concluded that holding a trial before the Supreme Court’s decision issues “is fundamentally inequitable.” The LendingClub court noted a Supreme Court ruling limiting the FTC’s powers under Section 13(b) would “greatly simplif[y]” the case, “as no monetary relief will be at issue.” The court predicted that “the elimination of monetary relief will likely facilitate a negotiated resolution.”

Pursuant to Section 13(b), the FTC seeks an injunction to stop Neora’s alleged pyramid scheme and an award of restitution to return money to consumers. The lawsuit, filed in the District of New Jersey, alleges that Neora (formerly known as Nerium International) and its CEO offered false promises that potential distributors could earn financial independence if they joined the company’s pyramid scheme – while, in reality, most recruits would end up losing money.

The lawsuit comes as part of the Commission’s larger efforts to crack down on multi-level marketing pyramid schemes. But interestingly, when it saw the lawsuit against it coming, Neora opted to lodge an aggressive attack of its own against the FTC.

In a lawsuit filed in the Northern District of Illinois (Seventh Circuit) against the FTC, Neora and Olson asked the court to declare that its company did not operate as a pyramid scheme. The company’s complaint also asserted that the FTC is not authorized to seek restitution or disgorgement under Section 13(b) – effectively contending that the FTC’s attempt to punish Neora by seeking restitution is not available as a remedy.

So what happens next? As an initial matter, the Department of Justice will have first crack at the case, given that Neora is seeking a declaratory judgment. Regardless of whether DOJ or the FTC leads the government’s response, we would expect a motion for a change of venue from Illinois to New Jersey, with argument that it is not possible to litigate the motion for declaratory judgment without litigating the facts of the underlying case. If the court agrees, the case would be moved to New Jersey where there is binding precedent that is more favorable to the Commission’s position.

Section 13(b) Questioned in the Seventh Circuit

The company’s choice of forum was no doubt driven by the Seventh Circuit’s landmark decision earlier this year in FTC v. Credit Bureau Center LLC. In that case, the Seventh Circuit held that the FTC could not obtain monetary relief in the form of restitution under Section 13(b). The court reasoned that Section 13(b)’s text cites injunctions as the FTC’s exclusive remedy, thus foreclosing the FTC from seeking restitution. As we have reported previously, the Seventh Circuit’s decision overturned three decades of its own precedent and broke with eight other federal appellate courts.

The FTC has stated that the opinion will not change its enforcement behavior. In a recent panel discussion, FTC Chief Litigation Counsel Bikram Bandy remarked that Credit Bureau Center would not alter the Commission’s approach to deterring fraud by seeking restitution. In ongoing litigation where the FTC is seeking monetary relief from defendants, according to Mr. Bandy, the FTC has prevailed (so far) on all motions raised by opposing counsel that have attempted to assert the legal theories advanced in Credit Bureau Center as a means of blocking a restitution award.

However, Mr. Bandy also noted that the FTC’s desire to remain aggressive would continue in all circuits that have not adopted the Credit Bureau Center holding – which is to say, all circuits other than Seventh. Neora’s decision to file against the FTC in the Northern District of Illinois means that the court will not be able to ignore Credit Bureau Center’s holding relating to Section 13(b).

In a different development that also could have far-reaching implications for the FTC’s ability to obtain civil monetary penalties, the U.S. Supreme Court granted certiorari on November 1 in Liu v. SEC. The Supreme Court will consider whether the SEC may obtain disgorgement under the Securities Act, which only mentions “equitable relief.” The SEC has obtained disgorgement in many instances by asserting that it is a form of equitable relief, but Liu has asserted that disgorgement is a penalty – not an equitable remedy – and therefore is not permitted under a plain reading of the Securities Act. The Court’s interpretation in Liu could prompt courts to reevaluate whether Section 13(b) of the FTC Act allows for restitution.

The FTC’s Campaign Against Multi-Level Marketers

Why was Neora determined to go on the offensive? According to Neora’s complaint, the FTC has been “improperly” reinterpreting the law on pyramid schemes without proper legislation or rulemaking in an attempt to effectively outlaw multi-level marketing (MLMs.) Neora alleges that the FTC assumes that no incentives can be paid for recruitment of participating distributors, even when the MLM makes robust sales to satisfied consumers.

In a statement, Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection, distinguished between legitimate MLMs and pyramid schemes, in alleging that Neora’s business model functions as part of the latter: “Participants in legitimate multi-level marketing companies earn money based on actual sales to real customers, rather than recruitment. But pyramid schemes depend on recruitment of new participants to pay out to existing participants, meaning that the vast majority of participants will ultimately lose money.”

In alleging that Neora directs its distributors to focus on recruiting instead of selling its product, the FTC cited a 2015 promotional video, where one of the company’s top earners remarked that distributors must take three steps to “explode” their business: “Number one. Recruit. Number two: Recruit. Number three: Recruit.” Beyond the recruitment-related allegations, the FTC also contended that Neora and its CEO deceptively promoted certain supplements as a means of curing concussions, chronic traumatic encephalopathy caused by brain trauma and Alzheimer’s disease.

Neora was not the only company targeted in the FTC’s investigation: the Commission also brought lawsuits against Signum Bioscienes and Signum Nutralogix. Unlike Neora, both Signum entities agreed to settle with the FTC. As per the terms of the settlement agreement, both entities will stop making certain claims relating to specific supplements at issue.

On a similar note, last month, the FTC announced it had entered into a $150 million settlement order with AdvoCare International, L.P. and its former chief executive officer. The settlement bans AdvoCare from the multi-level marketing business to resolve the FTC’s charges that the company operated an illegal pyramid scheme that deceived consumers into believing that they could earn considerable income as distributors of health and wellness products. In announcing the settlement, the FTC’s Smith stated: “The FTC is committed to shutting down illegal pyramid schemes like this and getting money back for consumers whenever possible.”

Firing Back at the FTC

But will the FTC be permitted to continue seeking such restitution awards? In Neora’s complaint against the FTC, the company alleges that the FTC had threatened to sue Neora in the Northern District of Illinois since July 2018 under Section 13(b). Neora claims that the FTC only threatened to sue in the District of New Jersey – where it eventually brought the lawsuit – as a result of the Seventh Circuit’s contrary opinion in Credit Bureau Center.

In a detailed “factual background” section in its complaint, Neora covers the “string of federal court losses” suffered by the FTC relating to the extent of its authority to file lawsuits without first exhausting its own administrative process, regarding its authority to recover monetary relief and relating to its authority to seek injunctive relief. Neora’s complaint predicts that “other Circuit Courts” will follow the Seventh Circuit’s lead in limiting the FTC’s enforcement powers to only restraining orders and injunctions under Section 13(b).

Thus, Neora seeks a declaration from the Northern District of Illinois that Section 13(b) does not authorize the FTC to seek “rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief” and instead only authorizes the Commission to seek injunctive relief for ongoing conduct.

If Neora succeeds, the FTC’s goal of “getting money back for consumers” would no longer be on the table – at least within courts in the Seventh Circuit. Neora’s hard-hitting approach to challenging the FTC’s claims against it – especially by invoking the ongoing debate over Section 13(b) – certainly bears watching.

Stay tuned for more installments of the “Section 13 (b)log.”

The Commissioner’s remarks reflect the agency’s concern over the recent decision of the U.S. Court of Appeals for the Third Circuit in FTC v. Shire Viropharma Inc., holding that the FTC may only bring a case under Section 13(b) of the FTC Act when the FTC can articulate specific facts that a defendant “is violating” or “is about to violate” the law. And Shire may not be a one-off decision; the same issue is under review in the Seventh Circuit, which heard argument last month in FTC v. Credit Bureau Center, is likely headed to the U.S. Court of Appeals for the Eleventh Circuit in FTC v. Hornbeam Special Situations, and is before the Ninth Circuit, where Judge Diarmuid O’Scannlain in FTC v. AMG Capital Management, urged the Circuit to sit en banc to review what he sees as wrongly-decided prior decisions that had allowed the FTC to pursue monetary damages under Section 13(b).

In her remarks, Commissioner Wilson provided some perspective on how important this issue is to the FTC:

Decades of cases have established two key principles. First, the FTC may bring actions in federal district court to obtain injunctive relief. Second, the authority to grant injunctive relief confers upon courts the full panoply of equitable remedies, including equitable monetary relief. Our ability to protect consumers relies heavily on this authority. For decades, the FTC has used Section 13(b) to halt unfair and deceptive practices that have caused billions of dollars in consumer injury.

Representative Tony Cardenas (D-CA) was sympathetic to the appeal for clarification. He noted that, in 2018, the FTC was able to provide $2.3 billion in refunds to consumers who were defrauded. He asked for further comment about the implications of the recent decisions. Chairman Joseph Simons characterized the effect as devastating to fraud enforcement efforts and the FTC’s ability to make consumers whole. In response to this this exchange, Representative Cardenas stated that he agreed that Congress needs to clarify the law.

This issue is also before the Ninth Circuit, where, in a concurring opinion Judge Diarmuid O’Scannlain in FTC v. AMG Capital Management, urged the Circuit to sit en banc to review what he see as wrongly-decided prior decisions that had allowed the FTC to pursue monetary damages in federal court under Section 13(b) of the FTC Act. The “text and structure of the statute unambiguously foreclose such monetary relief,” O’Scannlain wrote.

And now the issue is now teed up Seventh Circuit, which heard argument yesterday on the same issue in FTC v. Credit Bureau Center, LLC, et al., case numbers 18-2847 and 18-3310.

Some background: dating back to the 1980s, the FTC routinely used Section 13(b) as the basis to file lawsuits in federal court to stop allegedly deceptive, unfair, or anti-competitive conduct, and to seek permanent injunctive and monetary relief. Under Section 13(b), the FTC may seek an injunction in federal court “[w]henever the Commission has reason to believe ... that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by the [FTC].”

While in cases of pending acquisitions or ongoing fraud it may be clear that the FTC has reason to believe someone “is violating” or “is about to violate” the law, the FTC has also brought cases under Section 13(b) for claims arising from abandoned conduct. Shire, Hornbeam, and now Credit Bureau Center address the FTC’s authority to bring an action in federal court under Section 13(b) in these circumstances. Having lost in the Third Circuit in Shire, the FTC is looking for a different result in the Eleventh and Seventh Circuits, in order to bolster what the FTC views as a critically important aspect.

In Credit Bureau Center, the appellant argued that an Illinois federal court should not have entered a judgment for $5.2 million against a credit-monitoring company because Section 13(b) only permits the FTC to seek injunctive relief over the alleged wrongdoing. In response, the FTC argued that, while Section 13(b) expressly is limited to injunctions, the Seventh Circuit has recognized that "once you have the power to restrain and enjoin, you then have the power to impose other equitable remedies." U.S. Circuit Judge Diane Sykes appeared skeptical, responding that "this whole authority that the FTC has claimed is purely by interpretation through the word 'injunction" and "[t]hat may be how the agency operates, but that's not mentioned anywhere in the statute."

As we await word from the Eleventh, Ninth, and Seventh Circuits, we also are waiting to see whether the FTC will appeal the decision in Shire. Wins in the Eleventh and Seventh Circuits, and a refusal by the Ninth Circuit to take up the issue en banc, would obviously change that calculation, making it more likely that the FTC would seek cert and press its defense in support of the status quo.