• December 10, 2023

A 9-0 Defeat for the FTC

Close by the editorial staff

The editorial office

April 23, 2021, 6:37 p.m. ET

The Federal Trade Commission building in Washington.


Alex Brandon / Associated Press

Judge Stephen Breyer recently questioned the media’s partisan characterization of the Supreme Court in a speech. On Thursday, the court reiterated its position by beating the Federal Trade Commission 9-0 for rewriting the law to strengthen its power.

The AMG Capital Management v FTC case concerned a provision of the Federal Trade Commission Act that enables the agency to seek a permanent injunction in federal court for “unfair or misleading” business practices, however it defines them. The FTC argued that this provision also enabled it to seek financial relief from suspected criminals.

But as Justice Breyer explained For the Court of Justice, “an injunction does not mean fair financial relief”. A separate provision of the law enables the FTC to obtain financial relief, but only if a company has violated an injunction or a rule-making by the commission. So a company cannot admonish itself to do something that it does not know is wrong.

However, the FTC has increasingly ignored the legal restrictions on its power. “The Commission tells us that ‘the Agency [now] brings dozens of [§13(b)] every year requests for permanent disposition and return of illegally received funds, ”noted Judge Breyer.

While the FTC claimed that Congress approved the revision of the law, Judge Breyer put down this and four other arguments. The FTC’s construction of the law “would allow a small legal tail to wag a very large dog,” he explained.

The 9-0 verdict is an embarrassment for the agency, and acting FTC Chair Rebecca Kelly Slaughter did not weather the defeat well. The Supreme Court “ruled in favor of scammers and dishonest businesses, making average Americans pay for illegal behavior,” she said in a remarkable account that shows why the administrative state needs to rein in the FTC of the most powerful tool we had to help consumers with when they did need it most urgently. “

No, the court just told the FTC to prosecute fraudsters under the law or ask Congress to change the law if it wants more power. Administrative agencies cannot rewrite the law the way they want, and the FTC needed that unanimous backlash.

Journal Editorial Report: The Best and the Worst of the Week by Kim Strassel, Bill McGurn and Dan Henninger. Image: AP / Reuters Composite: Mark Kelly

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