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Justices of the United States Supreme Court will meet through teleconference and never at the court docket constructing on April 19, 2021 in Washington, DC.
Chip Somodevilla | Getty Images
The Supreme Court issued a ruling Thursday that may considerably restrict the Federal Trade Commission’s skill to extract financial aid for consumers when firms are discovered to use deceptive practices.
In a unanimous opinion delivered by Justice Stephen Breyer, the court docket mentioned that Section 13(b) of the FTC Act doesn’t authorize the company to search financial aid for violations of the regulation, because it has generally been used. The court docket famous that 13(b) does not explicitly authorize the company to receive such a treatment, however as a substitute permits the FTC to search “a everlasting injunction” pending administrative proceedings.
“It is very unlikely that Congress, with out mentioning the matter, would grant the Commission authority to circumvent its conventional §5 administrative proceedings,” Breyer wrote. Given that Congress later enacted a regulation that authorizes the company to search financial aid, the court docket mentioned it didn’t imagine Congress would have executed so if 13(b) already granted that authority.
The choice will considerably hamper the FTC’s skill to return money to consumers duped by deceptive business practices, as the four sitting commissioners testified to Congress on Tuesday. The two Democrats and two Republicans all advocated for a legislative repair ought to the Supreme Court rule towards its authority to grant financial aid below Section 13(b), although Republican Commissioner Noah Phillips prompt a extra slender method centered on restitution slightly than further compensation for ill-gotten positive factors. The House Energy and Commerce Committee had already slated a listening to for subsequent week to talk about legislative fixes to reaffirm the FTC’s energy to present redress to consumers.
The ruling may have far-reaching impacts in instances the place the FTC has invoked Section 13(b). Facebook, for instance, argued in its motion to dismiss the FTC’s ongoing antitrust lawsuit that it lacks statutory authority below 13(b). While the problem is not immediately about financial aid, Facebook argued the FTC shouldn’t be in a position to declare authority below that regulation to treatment previous conduct, because it solely permits the FTC to cease ongoing or imminent authorized violations.
A spokesperson for the FTC declined to touch upon how the ruling may influence that case.
But the company’s two Democratic commissioners slammed the ruling in statements on Thursday.
“In AMG Capital, the Supreme Court dominated in favor of rip-off artists and dishonest firms, leaving common Americans to pay for unlawful conduct,” Acting Chairwoman Rebecca Kelly Slaughter mentioned in an announcement Thursday. “With this ruling, the Court has disadvantaged the FTC of the strongest software we had to assist consumers once they want it most. We urge Congress to act swiftly to restore and strengthen the powers of the company so we are able to make wronged consumers entire.”
Slaughter mentioned the company has used the regulation to grant billions of {dollars} in aid for consumers over the previous 4 many years, and it has been notably helpful in taking motion towards scams associated to the Covid pandemic.
Fellow Democratic Commissioner Rohit Chopra prompt the company deploy a distinct authority that he mentioned may very well be used to sanction dangerous actors.
The case at hand concerned a payday mortgage scheme, for which the court docket dominated in favor of the FTC, ordering the defendant to pay $1.three billion in financial aid. The defendant argued that the FTC lacked the authority to search such a treatment, finally main to Thursday’s choice.
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