FTC Has Other Means of Obtaining Monetary Relief Following SCOTUS Decision, Sidley Says
Following a large U.S. Supreme Court decision ostensibly stripping the Federal Trade Commission of the authority to seek monetary relief from companies and individuals engaged in unfair or deceptive acts (see 2104220043), the agency may not be out of options to convey the long arm of the law into the scammers' pockets, Sidley Austin said in a May 6 analysis. For one, the FTC still has the power to obtain an injunction in federal court to continue stopping unlawful conduct. For another, the agency can use Section 19 of the FTC Act to obtain monetary relief. The provision allows a federal court to grant a financial award to the FTC after the agency has issued a final cease-and-desist order and proven that the subject act or practice accused of being fraudulent was committed knowingly. However, the Section 19 route is a lengthier process since it can only be employed after the FTC obtains a final cease-and-desist order.
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The real hope to reinstate the FTC's power to collect monetary relief lies in the halls of Congress, Sidley said. Even prior to the decision, Rep. Tony Cardenas, D-Calif., and Sen. Amy Klobuchar, D-Minn., introduced bills in the House of Representatives and Senate, respectively, which would expand the FTC's power to levy civil fines and obtain monetary relief for all laws enforced by the agency. “Congress has a number of competing priorities for legislative action, and no amendments to the FTC Act are expected imminently,” the analysis said. Prior to the ruling, the FTC used its authority to reap billions of dollars from businesses and individuals allegedly conducting scams.
The FTC may also seek to use alternative statutory authority to obtain monetary relief, such as under the COVID-19 Consumer Protection Act. The agency recently sought monetary penalties under the act in a complaint filed by the Department of Justice on the FTC's behalf. The FTC may also punt the issue of monetary relief to other consumer protection agencies while it attempts to fill the gap through Congress or other means. “Many states have statutes that similarly prohibit unfair or deceptive acts or practices,” Sidley said. “These state laws -- which are enforced by Attorneys General -- often expressly authorize monetary relief and civil penalties.”