FTC DEFIANT AFTER SUPREME COURT 9-0 RULING

The Supreme Court sends crushing blow to the agency for abusing the law.

The recent landmark unanimous Supreme Court decision in the FTC vs. AMG Capital case on April 22, 2021, finds that the FTC has been proceeding illegally for decades through egregious overreach to freeze the assets of business owners while leaving them without due process protections.  This ruling will now finally hold the FTC to the U.S. legal standard of “innocent until proven guilty”. (See: https://www.supremecourt.gov/opinions/20pdf/19-508_l6gn.pdf).  

“As Justice Breyer explained for the Court, ‘an ‘injunction’ is not the same as an award of equitable monetary relief.’ A separate provision of the law allows the FTC to obtain monetary relief, but only if a business has violated a commission cease-and-desist order or rule-making.  So a business can’t get dunned for doing something that it doesn’t know is wrong.)”. www.wsj.com/articles/a-9-0-defeat-for-the-ftc-11619217441.   Many business organizations have a similar view of the FTC overreach. (See eight amici curiae filed October 1-2, 2020 here: https://www.supremecourt.gov/docket/docketfiles/html/public/19-508.html).  “Maureen Ohlhausen, a former Republican commissioner and acting FTC chairwoman who has criticized the commission’s approach, said the FTC over time strayed from seeking monetary remedies in obvious fraud cases to also seeking money judgements in gray-area cases where defendants offered legitimate products and services.” www.wsj.com/articles/a-9-0-defeat-for-the-ftc-11619217441.

“The 9-0 ruling is an embarrassment to the agency, and FTC Acting Chair Rebecca Kelly Slaughter didn’t take the defeat well. The Supreme Court ‘ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,’ she said, in a remarkable display demonstrating why the administrative state needs reining in”. www.wsj.com/articles/a-9-0-defeat-for-the-ftc-11619217441.  What is most concerning is that even before this historic decision was handed down by the Highest Court in the land, the FTC began lobbying Congress to extend its reach to the levels that it has been operating- potentially making such illegal egregious overreach legal.  The FTC seems to want to continue its reign of terror against businesses by attacking and dismembering without due process.

The FTC is making a play by backing the introduction of Senate Bill S.4626  on September 17, 2020.  This includes SEC. 403. AUTHORITY OF COMMISSION TO SEEK PERMANENT INJUNCTION AND OTHER EQUITABLE REMEDIES to amend §13(b) of The Federal Trade Commission Act, seeking an expansion of power and consumer redress authority to solve a problem that they already have a remedy for under §19 of The Federal Trade Commission Act.  This matter was, rather interestingly from a timing perspective, discussed in a Senate hearing on April 20, 2021, just 2 days before the unanimous Supreme Court decision was handed down.

The FTC wants to expand the language of §13(b) in order to use it as a substitute for §5 and §19. This is an effort to avoid the administrative procedures and limitations set forth in §19 by Congress. If such a bill is passed, it will allow the FTC to continue to kill many legitimate businesses and rob them of large sums of money before they have an opportunity to defend themselves. (See: Does the FTC Have Blood On Its Hands? An Analysis of FTC Overreach and Abuse of Power After Liu, 68 Buff. L. Rev. 1481 (2020). Available at: https://digitalcommons.law.buffalo.edu/buffalolawreview/vol68/iss5/4 ).

In just 2017 alone, the FTC took $5.29 Billion in redress and disgorgements from businesses it attacked and only paid out $269 Million in damages to adversely affected parties.  This begs the question, why such excessive damages if only 5% of the fines are being paid back to the alleged “victims”?  This proves that Congress has had the FTC ACT written correctly all these decades, and that the FTC has in fact been stepping over the line of legality and usurping their authority when it suits their agenda.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

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