Argument Analysis: Judges question the FTC’s power to impose a monetary exemption – SCOTUSblog


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Posted Thursday Jan 14, 2021 at 3:16 PM Posted by Ronald Mann

If you’re arguing on behalf of a federal regulatory agency’s authority to protect corporate consumers and Judge Stephen Breyer puts his face against you, chances are your day isn’t going well. But this is what happened Wednesday morning when Joel Marcus appeared on behalf of the FTC at AMG Capital Management v. Federal Trade Commission.

Joel Marcus argues for FTC (Art Lien)

The case includes Section 13 of the Federal Trade Commission Act, which allows the Federal Trade Commission to request a “court order” against a company that is violating, or about to violate, any provision of the law enforced by [the FTC]. “The Federal Trade Commission typically uses that power to obtain what it describes as” conciliatory “cash prizes for the theory (which has been supported by half-century-old and dominant Supreme Court cases in appeals courts) that the legal power to obtain an implicit” restraining order “includes all traditional forms of relief In this case, for example, the Federal Trade Commission obtained a “injunction” ordering the defendants to pay more than $ 1 billion based on the discovery of fraud in various aspects of short-term dollar lending programs in which the defendants participated.

The focal point of the oral discussion was a lengthy monologue from Breyer, whose questioning of Marcos began in direct contrast to the FTC’s position in terms of the historical “compromise” of the FTC act. As Breyer said:

History is important. Think Judge Brandeis, when he started [working on the FTC Act], With a business community that was very skeptical of the authority of the FTC that believed it would be abused and a progressive community that believed it was absolutely essential to control bad business practices. So they bargained.

Breyer found the terms of this settlement easy to explain: “The compromise you had to do what the FTC says, but before it tells you to do something, you will find that what you are doing right now is wrong. You will find it. It will be a stop and cease order.” As he went on to clarify, Section 5 of the law considers a “suspension order, abstention, or rule violation” as a basis for the compensation decision. In Section 19, Breyer distinguished “the same.” But according to Marcus’ view, Breyer said, Article 13 allows the FTC to recover compensation “with no such protection whatsoever” – based on a lawsuit without warning, claiming that some unregulated and previously unchecked practices are deceptive in the first place. .

And Breyer was not convinced that the FTC only uses power in exceptional or unusual circumstances: “Don’t worry,” the FTC says, “we’ll only use it in exceptional cases.” Ha! … I read that 100 cases under this clause are in court, compared to 10 or 12 cases in regular law [procedures]. Summarizing his views, Breyer explained, “If we interpret it your way, we’d say your concerns, the business community, were absolutely right. … before you know it’s okay, they hurt you badly. ”$ 1 billion in this case as I mentioned above.

Breyer was not alone. From one end of the seat to the other, the justices found the FTC’s reading of Section 13 jarring. Early in Marcus’s presentation, for example, Judge Clarence Thomas commented that the text of 13 (b) (1) “appears to indicate that [it] Focuses on looking to the future, preventing the future or present work. It looks like what you’re doing here is using it for something that really happened. ”Judge Samuel Alito – not a big fan of legislative history – read a lengthy statement from David Fitzgerald, who served as a litigation attorney for the Federal Trade Commission during the 1970s and 1980s. As Alito explained, Fitzgerald understood that the commission Federal Trade “decided that [the limitations in] Section 19 [made it] A waste of time so … I looked for an alternative solution and [found one]. Indeed, Fitzgerald explained in the passage Alito, the FTC attorney read at the time, “I thought these arguments would not work, but, to their surprise, they did.” Alito told Marcus that these confessions were “very harmful to your position.”

Judge Elena Kagan’s comments embraced the same tension between the “protective measures” that Congress put in place in Sections 5 and 19 and the broad authority that the FTC seeks under Section 13. She also said:

[I]It seems to me that the best argument against your position, and it is strong, comes from Section 5 and Section 19, which contain these protections that Section 13 does not, that there must be a repeated infringement, that there is a certain kind of criminal intent and so on. And it’s almost as if your interpretation of Section 13 renders these pretty much completely unimportant.

Continuing the blatant response, Judge Neil Gorsuch embraced Breyer’s understanding of history, stating that,[t]The Federal Trade Commission (FTC) was created in part to enact rules about deceptive behavior that would give companies advance notice of sanctioned behavior, but that

[i]He chose not to go this way, and preferred the path of execution. … I think our primary concern is that you are making that protection unnecessary, that there is very little incentive for the agency to comply with it, and it’s just another step away from what Congress expected would be a regulatory system that never materialized. “

I can break down this point, but I’ll only show another excerpt from the comments of Judge Brett Kavanaugh, who mentioned his work at the Justice Department and the White House early in his career:

I worked in the executive branch for many years, so I understood how that happened. When you are in the executive branch or an independent agency, you want to do good things and prevent or punish bad things, and sometimes your legal authority is the limit. It may be war, immigration, environmental, or whatever you have, but with good intentions, the agency pushes the circumstance and extends the legal language to do good or prevent bad.

For Kavanaugh, that’s dynamic

It leads to a transfer of power from Congress to the executive branch to decide whether to exercise this new power. This is a particular concern, at least for me, with independent agencies. [W]Why isn’t the answer here for the agency to obtain this new power from Congress for us to maintain the principle that … the agency should abide by the authority in the text and not override it?

I suggested on My preview that AMG It was one of the simplest cases to be heard by the Supreme Court this year. My reading of the argument is that the main question remaining is whether or not AMG The first opinion will be from the controversial calendar for January or whether the justices will find some other issues that seem more apparent to them.

Published in AMG Capital Management, LLC v Federal Trade Commission, Featured, Advantages of the issues

Recommended quote:
Ronald Mann,
Argument analysis: Judges doubt the FTC’s power to force monetary easing,
Scotus Blog (January 14, 2021, 3:16 PM), https://www.scotusblog.com/2021/01/argument-analysis-justices-doubt-ftcs-authority-to-compel-monetary-relief/


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