December 11, 2020
LANSING – Michigan Attorney General Dana Nessel recently joined a bipartisan coalition of 29 other attorneys general urging the U.S. Supreme Court to affirm the Federal Trade Commission’s (FTC) authority to seek restitution for victims of anticompetitive, unfair and deceptive trade practices when enforcing consumer protections under the FTC Act.
In an amicus brief filed in AMG Capital Management LLC v. Federal Trade Commission, the coalition argues that the FTC’s authority is critical and benefits states and their residents.
“As attorneys general, my colleagues and I rely on our partnerships with federal regulators like the Federal Trade Commission due to its broad investigative and enforcement authority. This authority is crucial when it comes to holding accountable those who take advantage of vulnerable consumers,” said Nessel. “With the help of the FTC, states are in a better position to protect their residents from unfair and deceptive trade practices. My colleagues and I urge the court to uphold the FTC’s authority, thus allowing us to continue our work to protect the pocketbooks of our residents and combat anticompetitive and deceptive behavior.”
In April 2012, the FTC filed a lawsuit against Scott Tucker and several of his companies that provided high-interest, short-term loans online. The lawsuit alleged the loan business violated the FTC Act. The district court ruled in the FTC’s favor, ordering Tucker to pay about $1.27 billion in restitution. Tucker appealed to the U.S. Court of Appeals for the 9th Circuit and argued that the FTC did not have the authority to demand restitution. The appellate court affirmed the district court’s decision, and Tucker appealed again to the Supreme Court.
For decades, courts have recognized the FTC’s authority to seek restitution under Section 13(b) of the FTC Act. The attorneys general argue in their brief that denying the FTC this authority will negatively harm states and their residents and will impede federal-state collaborations to protect against anticompetitive, unfair, and deceptive practices. Between 2016 and 2019 alone, the FTC has mailed more than $1 billion in refunds to consumers affected by such practices.
States rely on partnerships with federal regulators, such as the FTC, to protect millions of Americans from monopolists and fraudsters. While state attorneys general regularly obtain restitution through their own enforcement actions under state law, states also benefit from the FTC’s independent authority to investigate and address violations of federal law.
If the FTC were prohibited from seeking restitution, the attorney generals argue, that would embolden those who seek to take advantage of vulnerable consumers. Restitution prevents wrongdoers from benefiting from their actions by requiring them to return ill-gotten gains to affected consumers. Without the FTC’s authority to seek restitution, these practices would erode consumer confidence and deter competition.
In filing the brief, Attorney General Nessel joins the attorneys general of Alaska, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Indiana, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Vermont, Virginia, Washington and Wisconsin.