Amicus Curiae Brief — AMG Capital Management, LLC, et al., Petitioners v. Federal Trade Commission

No. 19-508

IN THE

AMG CAPITAL MANAGEMENT, LLC, ET AL.,

Petitioners,

v.

FEDERAL TRADE COMMISSION,

Respondent.

On Writ of Certiorari to the United States Court

of Appeals for the Ninth Circuit

BRIEF OF AMICI CURIAE FORMER FEDERAL

TRADE COMMISSION OFFICIALS IN

SUPPORT OF RESPONDENT

DAVID C. VLADECK

Counsel of Record

RACHEL L. FRIED

GEORGETOWN UNIVERSITY

LAW CENTER

CIVIL LITIGATION CLINIC

600 New Jersey Ave. NW

Washington, DC 20001

(202) 661-6614

vladeckd@georgetown.edu

Counsel for Amici Curiae

DECEMBER 2020

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES....................................... ii

INTEREST OF AMICI CURIAE ................................1

INTRODUCTION AND SUMMARY OF

ARGUMENT ...............................................................2

ARGUMENT ...............................................................5

I. Section 13(b) Authorizes Compensatory

Redress. ..................................................................6

A. Congress and Section 13(b). .............................6

B. Congress’s Oversight of the FTC’s Use

of Section 13(b) To Obtain Redress. ............... 14

C. For Nearly Four Decades, Courts

Uniformly Held that Section 13(b)

Authorizes Compensatory Relief. .................. 19

II. Petitioners Err in Attacking the Soundness

of Porter and Mitchell. ......................................... 24

A. There is No Valid Legislative Command

Limiting Section 13(b)’s Equity

Jurisdiction. .................................................... 25

B. Stare Decisis Further Refutes

Petitioners’ Argument. ................................... 28

CONCLUSION .......................................................... 30

ii

TABLE OF AUTHORITIES

Cases

Page(s)

In re 1-800 Contacts,

2018 WL 6078349 (F.T.C. 2018) .......................... 13

Brown v. Swan,

35 U.S. 497 (1836) ................................................ 29

California v. Am. Stores Co.,

495 U.S. 271 (1990) .............................................. 20

FTC v. Amy Travel Servs., Inc.,

875 F.2d 564 (7th Cir. 1989) ................................ 19

FTC v. Bronson Partners, LLC,

654 F. 3d 359 (2d Cir. 2011) .............. 14, 20, 23, 28

FTC v. Commerce Planet, Inc.,

815 F.3d 593 (9th Cir. 2016) ................................ 14

FTC v. Credit Bureau Ctr., LLC,

937 F.3d 764 (2019).................................... 3, 11, 19

FTC v. Direct Mktg. Concepts, Inc.,

624 F.3d 1 (1st Cir. 2010) .................................... 20

FTC v. Figgie Int’l,

994 F.2d 595 (9th Cir. 1993) ................................ 12

FTC v. Freecom Commc’ns, Inc.,

401 F.3d 1192 (10th Cir. 2005) ............................ 20

iii

FTC v. Gem Merch. Corp.,

87 F.3d 466 (11th Cir. 1996) ................................ 20

FTC v. H.N. Singer, Inc.,

668 F.2d 1107 (9th Cir. 1982) .................... 2, 15, 19

FTC v. Kennedy,

574 F. Supp. 2d 714 (S.D. Tex. 2008) .................. 20

FTC v. Mylan Labs., Inc.,

62 F. Supp. 2d 25 (D.D.C. 1999) .......................... 20

FTC v. Ross,

743 F.3d 886 (4th Cir. 2014) ................................ 20

FTC v. Sec. Rare Coin & Bullion Corp.,

931 F.2d 1312 (8th Cir. 1991) .............................. 19

FTC v. Southwest Sunsites, Inc.,

665 F.2d 711 (5th Cir. 1982) ................................ 20

FTC v. U.S. Oil & Gas Corp.,

748 F.2d 1431 (11th Cir. 1984) .............................. 8

Great-West Life & Annuity Ins. Co. v.

Knudson,

534 U.S. 204 (2002) .............................................. 27

Heater v. FTC,

503 F.2d 321 (9th Cir. 1974) ............................ 7, 10

Int’l Union, UMW v. Bagwell,

512 U.S. 821 (1994) ................................................ 9

Kimble v. Marvel Entertainment, LLC,

576 U.S. 446 (2015) ........................................ 28, 29

iv

Kisor v. Wilkie,

139 S. Ct. 2400 (2019) .................................... 28, 29

Kungys v. United States,

485 U.S. 759 (1988) ................................................ 9

Liu v. SEC,

140 S. Ct. 1936 (2020) .................................. passim

Meghrig v. KFC W., Inc.,

516 U.S. 479 (1996) .................................. 25, 26, 27

Michigan v. Bay Mills Indian Community,

572 U.S. 782 (2014) .............................................. 28

Mitchell v. Robert De Mario Jewelry,

361 U.S. 288 (1960) ...................................... passim

New York Trust Co. v. Eisner,

256 U.S. 345 (1921) ................................................ 6

Parker Drilling Mgmt. Servs., Ltd. v.

Newton,

139 S. Ct. 1881 (2019) ............................................ 8

In re POM Wonderful, LLC,

155 F.T.C. 1 (2013), aff’d as

modified, 777 F.3d 478 (D.C. Cir.

2015) ..................................................................... 13

Porter v. Warner Holding Co.,

328 U.S. 395 (1946) ...................................... passim

Virginian R. Co. v. Railway Employees,

300 U.S. 515 (1937) .............................................. 28

v

Wal-Mart Stores, Inc. v. Wells,

213 F.3d 398 (7th Cir. 2000) ................................ 27

Weinberger v. Romero-Barcela,

456 U.S. 305 (1982) ........................................ 20, 24

Statutes

15 U.S.C. 45 ....................................................... passim

15 U.S.C. 45(a)......................................................... 2, 6

15 U.S.C. 45(l) ................................................... passim

15 U.S.C. 45(m) ....................................................... 5, 9

15 U.S.C. 53(b)................................................... passim

15 U.S.C. 57b ..................................................... passim

15 U.S.C. 57b(e) ......................................................... 11

29 U.S.C. 217 ....................................................... 21, 22

29 U.S.C. 1132(a)(3) .................................................. 27

Emergency Price Control Act § 205(a),

56 Stat. 23, 33, 50 U.S.C.App.

§ 925(a) ........................................................... 20, 22

Federal Trade Commission Act

Amendments of 1994, Pub. L. No.

103-312, § 12, 108 Stat. 1961 (1994) ................... 16

U.S. Safe Web Act of 2006, Pub. L. No.

109-455, 120 Stat. 3372 (2006) ............................ 16

vi

Other Authorities

Federal Trade Commission Reauthorization: Hearing Before the S. Comm.

on Commerce, Sci., and Transp.,

98th Cong. (1983) ................................................. 14

Federal Trade Commission Reauthorization: Hearing Before the S. Comm.

on Commerce, Sci., and Transp.,

100th Cong., 1st Sess. (Sept. 17,

2007) ..................................................................... 16

Federal Trade Commission Reauthorization: Hearing Before the S. Comm.

on Commerce, Sci., and Transp.,

100th Cong., 2nd Sess. (Apr. 8, 2008) ................. 17

Financial Services and Products: The

Role of the Federal Trade Commission in Protecting Consumers, Hearing Before the S. Comm. on Commerce, Sci., and Transp., 111th

Cong., 2nd Sess. (Feb. 4, 2010) ............................ 17

Financial Services and Products: The

Role of the Federal Trade

Commission in Protecting

Consumers–Part II, Hearing Before

the Subcomm. on Consumer Prot.,

Prod. Safety, and Ins. of the S.

Comm. on Commerce, Sci., and

Transp., 111th Cong., 2nd Sess.

(Mar. 17, 2010) ..................................................... 18

vii

FTC Annual Reports,

Federal Trade Commission,

https://www.ftc.gov/policy/reports/pol

icy-reports/ftc-annual-reports (last

visited Nov. 20, 2020)........................................... 18

J. Howard Beales III and Timothy J.

Muris, FTC Consumer Protection at

100: 1970s Redux or Protecting Markets to Protect Consumers?, 83 GEO.

WASH. L. REV. 2157 (2015) ..................................... 7

J. Howard Beales III & Timothy J. Muris, Striking the Proper Balance: Re-

dress Under Section 13(b) of the FTC

Act, 79 Antitrust. L.J. 1 (2013)............................ 11

S. Rep. 103-130 (1993)............................................... 15

S. Rep. No. 93-151 (1973) .......................................... 12

BRIEF OF AMICI CURIAE FORMER FEDERAL

TRADE COMMISSION OFFICIALS IN SUPPORT

OF

RESPONDENT

INTEREST OF AMICI CURIAE

Amici are former Federal Trade Commission

(FTC) officials who had substantial experience overseeing FTC enforcement cases. 1 Joan Z. Bernstein

served as Director of the FTC’s Bureau of Consumer

Protection from 1995 to 2001. M. Eileen Harrington

served as Executive Director of the FTC from 2010 to

2012, and as Acting Director of the Bureau of Consumer Protection in 2009. Mary K. Engle served as

Associate Director, Advertising Practices Division, of

the Bureau of Consumer Protection from 2001 to

2020. C. Lee Peeler served as Deputy Director of the

Bureau of Consumer Protection from 2001 to 2006.

Jessica Rich served as Director of the Bureau of Consumer Protection from 2013 to 2017, as Deputy Director of the Bureau of Consumer Protection from 2009

to 2011, and as Associate Director of Financial Practices from 2011 to 2013. Teresa Schwartz served as

Deputy Director of the Bureau of Consumer Protection from 1995 to 2001. Mozelle W. Thompson served

as Commissioner of the FTC from 1997 to 2004. David

C. Vladeck served as Director of the Bureau of Consumer Protection from 2009 to 2012. Joel Winston

served as Associate Director, Division of Financial

Practices, from 2000 to 2005 and 2009 to 2011; and as

Pursuant to Rule 37.6, amici affirm that no counsel for a

party authored this brief in whole or in part and that no person

other than amici and their counsel made a monetary contribution

to its preparation or submission. The parties have consented to

the filing of this brief.

1

2

Associate Director, Division of Privacy and Identity

Protection, from 2005 to 2009. We submit this brief

because the resolution of this case could have a profound impact on the FTC’s ability to obtain compensatory redress for injured consumers.

INTRODUCTION AND SUMMARY OF ARGUMENT

The FTC’s core mission is set out in Section 5(a) of

the Federal Trade Commission Act (FTC Act), 15

U.S.C. 45(a), which directs the FTC to “prevent” “unfair or deceptive acts or practices” and “unfair methods of competition.” Enforcement actions challenging

Section 5 violations are typically brought under Section 13(b) of the Act, 15 U.S.C. 53(b), which authorizes

the FTC to file cases in federal district court and empowers courts to issue preliminary and permanent injunctions.

The question in this case is whether Section 13(b)

allows district courts to enter injunctions requiring

defendants to return monies illegally acquired from

consumers. For the past four decades, circuit courts

uniformly relied on Mitchell v. Robert De Mario Jewelry, 361 U.S. 288 (1960), and Porter v. Warner Holding Co., 328 U.S. 395 (1946), to hold that Section

13(b)’s broad grant of injunctive authority carries with

it “all the inherent equitable powers of the District

Court,” including the power to order compensatory redress. E.g., FTC v. H.N. Singer, Inc., 668 F.2d 1107,

1112 (9th Cir. 1982) (quoting Porter, 328 U.S. at 398).

Applying these rulings, courts have ordered wrongdoers to refund billions of dollars to consumers.

And for the past four decades, Congress has consistently approved the FTC’s use of Section 13(b) to

obtain compensatory redress. Congress even amended

3

the FTC Act to facilitate Section 13(b) consumer redress cases. Congress has also conferred additional

enforcement powers on the FTC, including the right,

in some cases, to seek damages and civil penalties.

These provisions complement, but do not displace,

Section 13(b). Make no mistake, Section 13(b) remains

the FTC’s most important enforcement tool: It is the

only provision of the FTC Act that enables the FTC

both to enjoin violations of Section 5 (mainly frauds

and scams) and to secure compensatory redress for injured consumers in the same proceeding.

Given this unbroken, decades-long history, the

key question is what has changed? The text of Section

13(b) has not changed. Congress’s approval of the

FTC’s use of Section 13(b) for compensatory redress

has not changed. And the salience of Mitchell and Porter, the cases that established the legal backdrop for

Section 13(b)’s enactment, has not changed.

Petitioners nonetheless contend that Congress did

not understand the law it enacted in 1973 and that

every Circuit Judge on the pre-2019 cases upholding

the FTC’s right to use Section 13(b) for compensatory

redress failed to see the limits petitioners now ask this

Court to impose on Section 13(b).

Petitioners attempt to answer the “what has

changed” question by advancing two related arguments uniformly rejected in prior cases, but resurrected in Judge O’Scannlain’s concurrence in this

case, 910 F.3d 417, 429, and then adopted by the Seventh Circuit in FTC v. Credit Bureau Ctr., LLC, 937

F.3d 764, 767 (2019). Neither has merit.

First, petitioners contend that the courts and Congress have for decades misread Section 13(b). But petitioners’ textual arguments are curiously acontextual. When Congress enacted Section 13(b), this

4

Court’s rule was (and remains today) that “the comprehensiveness of [courts’] equitable jurisdiction is

not to be denied or limited in the absence of a clear

and valid legislative command.” Porter, 328 U.S. at

398; Mitchell, 361 U.S. at 291 (quoting Porter); accord

Liu v. SEC, 140 S. Ct. 1936, 1946–47 (2020) (reaffirming rule). Petitioners cannot point to any “clear and

valid legislative command” denying or limiting equitable authority under Section 13(b) because Congress

issued no such command. And petitioners cannot

show any meaningful distinction between the statutes

at issue in Mitchell and Porter and Section 13(b).

Petitioners’ fallback contention, that Congress intended Section 19 of the FTC Act, 15 U.S.C. 57b, enacted two years after Section 13(b), to provide the sole

tool for compensatory redress, is also deeply flawed. It

ignores the reality that Section 19’s scope is limited,

i.e., it is unavailable in many Section 5 violation cases,

including those in which the challenged practices are

unfair or deceptive, but not demonstrably “fraudulent

or dishonest.” It renders meaningless Section 19’s declaration that its remedies are “in addition to, and not

in lieu of, any other remedy or right of action” available to the Commission. It is also oblivious to Congress’s repeated approval of the FTC’s use of Section

13(b) to obtain consumer redress. And if taken seriously, the contention hollows out Section 13(b). Unless

Section 13(b) authorizes equitable remedies, including the appointment of receivers, accountings, and the

imposition of asset freezes, the FTC would have little

power to prevent asset dissipation and consumer redress would often be a fantasy. And without equitable

remedies, the FTC would have no reason to pursue

permanent injunctions under Section 13(b), when

cease and desist orders would provide the same relief

5

and lay the groundwork for substantial civil penalties

and equitable remedies. See 15 U.S.C. 45(l) & (m).

Second, petitioners assert that the precedential

force of Mitchell and Porter has been eroded by the

Court’s decisions limiting equitable remedies. That

argument also misses the mark because petitioners

rely only on cases where Congress specified the remedies available under the statute, and either explicitly

“or by a necessary and inescapable inference” restricted equitable remedies. Porter, 328 U.S. at 398.

There is, of course, no “legislative command” in Section 13(b) limiting the equitable authority of district

courts. Just last Term this Court in Liu relied on Porter to reaffirm that compensatory redress remains an

equitable remedy available to district courts in federal

agency litigation absent a legislative command to the

contrary. Liu, 140 S. Ct. at 1943, 1946–47. This Court

has never questioned the vitality of the holdings of

Mitchell and Porter. And petitioners do not argue that

those decisions should now be abrogated or abandoned.

For these reasons, amici urge the Court to affirm

the judgment below.

ARGUMENT

This brief focuses on two points set out in the

FTC’s more comprehensive submission that warrant

particular emphasis. First, for forty years, Congress,

the FTC, and the courts have all endorsed the FTC’s

use of Section 13(b) to provide compensatory redress

to injured consumers. Petitioners cite no change in the

law, let alone a change that would justify overturning

this shared understanding. Second, petitioners’ contention that Section 13(b) does not authorize equitable

remedies cannot be reconciled with the Court’s rulings

in Mitchell v. Robert De Mario Jewelry, 361 U.S. 288

6

(1960), and Porter v. Warner Holding Co., 328 U.S.

395 (1946), or with this Court’s affirmation of the Porter doctrine in Liu v. SEC, 140 S. Ct. 1936 (2020). Petitioners ignore the force of stare decisis, but in any

event there is no basis to overrule these decisions.

I.

Section 13(b) Authorizes Compensatory Redress.

Justice Oliver Wendell Holmes famously wrote

that “a page of history is worth a volume of logic.” New

York Trust Co. v. Eisner, 256 U.S. 345, 349 (1921).

Eisner is a statutory construction case, and in the preceding sentence Justice Holmes relies on “the interpretation of language by its traditional use – on the

practical and historical ground” to find that the tax at

issue “always has been regarded as the antithesis of a

direct tax.” Id.

In this case, there are also pages of history that

demonstrate that Section 13(b) “always has been regarded” as conferring authority on courts to order

compensatory redress. This history includes Congress’s enactment of Section 13(b) and its decadeslong approval of the FTC’s use of Section 13(b) to obtain consumer redress; the FTC’s longstanding practice of bringing Section 13(b) cases to repatriate illegally obtained monies to consumers; and, prior to

2019, the unanimous rulings, spanning nearly four

decades, by eight circuit courts, that Section 13(b) conferred authority on district courts to order compensatory redress.

A. Congress and Section 13(b).

1. Section 5 of the FTC Act directs the Commission to “prevent” “[u]nfair methods of competition”

and “unfair or deceptive acts or practices” in or affecting commerce. 15 U.S.C. 45(a). Before 1973, the FTC

7

lacked redress authority. The FTC enforced the Act’s

prohibitions through administrative proceedings, but

the only available remedies were forward-looking

cease and desist orders. The FTC could ask the Attorney General to challenge order violations and seek

civil penalties under Section 5(l), 15 U.S.C. 45(l), but

those penalties did not provide redress for injured consumers. See Heater v. FTC, 503 F.2d 321, 325 n.16

(9th Cir. 1974) (noting that before the 1973 amendments, “those sufficiently unscrupulous or reckless to

engage in conduct clearly forbidden by the Act may do

so until a cease and desist order is entered, escaping

with the fruits of the violation. In many situations …

a violation of the Act may be quite profitable.”). 2

Congress took steps to close this gap. First, Congress added Section 13(b), 15 U.S.C. 53(b), to the FTC

Act to authorize the Commission to file cases in district court whenever the Commission has reason to believe that a party is violating or about to violate any

provision of law enforced by the Commission. Section

13(b) authorizes the court to impose preliminary relief, including a preliminary injunction or temporary

restraining order, provided that the FTC files an administrative action against the defendant within

twenty days of the imposition of the preliminary relief. Section 13(b) also empowers courts to issue permanent injunctions in “proper cases.”

At the time of Section 13(b)’s enactment, it was

settled law that a federal agency’s statutory authority

For an overview of the FTC’s initial use of Section 13(b) to

obtain consumer redress, see J. Howard Beales III and Timothy

J. Muris, FTC Consumer Protection at 100: 1970s Redux or Protecting Markets to Protect Consumers?, 83 GEO. WASH. L. REV.

2157, 2174-77 (2015).

2

8

to seek injunctive relief carried with it “all the inherent equitable powers of the District Court,” including

the power to order compensatory redress. Porter, 328

U.S. at 398; Mitchell, 361 U.S. at 291 (quoting Porter).

The Porter Court reaffirmed the longstanding principle that “[t]he comprehensiveness of this equitable jurisdiction is not to be denied or limited in the absence

of a clear and valid legislative command.” Id. This

principle applied with full force to Section 13(b) when

Congress enacted it in 1973. Accordingly, Section

13(b)’s grant of equitable authority empowers courts

to order not only interim equitable relief—e.g., the appointment of receivers, accountings and asset

freezes—but also equitable relief in the form of restitution and rescission. 3

This understanding of Section 13(b) is in keeping

with the interpretive canon that “Congress legislates

against the backdrop of existing law.” See, e.g., Parker

Drilling Mgmt. Servs., Ltd. v. Newton, 139 S. Ct.

1881, 1890 (2019). The “existing law” in 1973 consisted of Mitchell and Porter, each of which drove

home that Congress’s bestowal of permanent injunctive power authorized district courts to impose equitable remedies. Porter, 328 U.S. at 398; Mitchell, 361

U.S. at 291 (quoting Porter).

Nothing in the text of Section 13(b) diminishes the

longstanding principle stated in Porter and Mitchell.

As discussed above, Section 13(b) permits the FTC to

See, e.g., FTC v. U.S. Oil & Gas Corp., 748 F.2d 1431, 1432

(11th Cir. 1984) (per curiam) (holding that district courts have

“the inherent power of a court of equity to grant ancillary relief,

including freezing assets and appointing a Receiver, as an incident to [their] express statutory authority to issue a permanent

injunction under Section 13 of the Federal Trade Commission

Act”).

3

9

seek both preliminary and permanent injunctions.

The permanent injunction provision states: “Provided

further, That in proper cases the Commission may

seek, and after proper proof, the court may issue, a

permanent injunction.” 15 U.S.C. 53(b). As Porter and

Mitchell establish, the grant of injunctive power on

district courts also conveys the power to order equitable remedies.

Petitioners argue that Section 13(b)’s permanent

injunction provision authorizes permanent injunctions and nothing more. Under petitioners’ theory, because Section 13(b) does not authorize equitable remedies, a permanent injunction could do no more than

prohibit wrongful conduct. Petitioners never explain

why, under their theory, a permanent injunction

would be preferable to a cease and desist order. There

is no sensible answer. FTC cease and desist orders

serve the same purpose as court orders, but the FTC,

not a court, dictates the terms, and the FTC can use

both punitive and coercive sanctions to force compliance, not just the coercive tools available to district

courts in civil contempt. See, e.g., Int’l Union, UMW

v. Bagwell, 512 U.S. 821, 827–32 (1994).

The FTC’s tools to force compliance are formidable. Sections 5(l) and 5(m) of the Act authorize courts

to impose equitable remedies for cease and desist order violations and punitive sanctions in the form of

civil penalties, where “each day of continuance of such

failure or neglect [to comply with a Commission order]

shall be deemed a separate offense.” Petitioners’ interpretation renders Section 13(b)’s permanent injunctive provision surplusage, yet another reason to reject

petitioners’ reading of the FTC Act. See, e.g., Kungys

10

v. United States, 485 U.S. 759, 778 (1988) (plurality

opinion of Scalia, J.). 4

2. Heater held that the FTC has no power to

award consumer redress in cease and desist orders.

503 F.2d at 326–27. In 1975, in the wake of the Heater

ruling, Congress added Section 19 to the Act to fill

voids Sections 5(l) and 13(b) left open. Section 5(l) provides for civil penalties for violations of cease and desist orders; it does not authorize redress for consumers injured by the initial violation. And Section 13(b)

provides for consumer redress but does not authorize

courts to impose damages or civil penalties.

Section 19 provides additional remedies that Congress saw fit to impose where (a) a party violates an

FTC rule, or (b) a party’s violation of a cease and desist order involves a practice that “a reasonable man

would have known under the circumstances was dishonest or fraudulent.” 15 U.S.C. 57b. Section 19 permits courts to impose damages as well as compensatory redress in these circumstances. But Section 19

does not authorize injunctive relief or civil penalties.

Because of the limited nature of Section 19’s remedies,

Congress was careful to ensure that Section 19 added

to, not displaced, remedies available under Sections

Petitioners’ argument that the FTC can seek an asset freeze

during an administrative proceeding collides with petitioners’

main argument that all equitable remedies—including asset

freezes, the appointment of receivers, and compensatory redress—are unavailable under Section 13(b). There is no textual

support for petitioners’ claim that equitable relief is available

when the FTC seeks preliminary relief but not when the FTC

seeks a permanent injunction. In any event, to obtain an asset

freeze, the FTC must satisfy Section 13(b)’s demanding standards, which require “a proper showing that, weighing the equities and considering the Commission’s likelihood of ultimate success, such action would be in the public interest.”

4

11

5(l) or 13(b) by specifying that Section 19’s remedies

are “in addition to, and not in lieu of, any other remedy or right of action” available to the Commission. Id.

57b(e).

Notwithstanding Section 19’s preservation-ofrights clause, petitioners argue that Congress intended Section 19 to be the FTC’s only route to consumer redress. But petitioners fail to muster support

for such a consequential claim.

Petitioners first argue that the FTC would have

no need for Section 19 if it could get complete restitutionary relief through Section 13(b). Brief for Petitioners at 26–27 [hereinafter Pet’rs’ Br.]; see also FTC v.

Credit Bureau Ctr., LLC, 937 F.3d 764, 783 (7th Cir.

2019). This argument shortchanges Section 19. As explained above, Section 19 does more than authorize

consumer redress. Section 19 is not, under the FTC’s

reading of the Act, irrelevant. 5

Section 19, however, is not a suitable vehicle for

consumer redress in the mine run of FTC violations.

The only recourse Section 19 adds for Section 5 violations is after-the-fact; once an FTC cease and desist

order becomes final (which entails a full trial on the

merits, followed by the right to appeal to the Commission and then to a court of appeals), the FTC may file

suit in district court to seek redress and damages.

And to obtain redress, the FTC has to prove that the

violation of a cease and desist order or FTC rule involved “dishonest or fraudulent” conduct, a showing

that may require additional litigation in court, thus

See J. Howard Beales III & Timothy J. Muris, Striking the

Proper Balance: Redress Under Section 13(b) of the FTC Act, 79

5

Antitrust. L.J. 1, 3 (2013), for an explanation of why petitioners’

argument that Section 19 “provided the exclusive road to final

relief” fails.

12

impeding the FTC’s ability to get redress back into

consumers’ pockets. See, e.g., FTC v. Figgie Int’l, 994

F.2d 595, 603 (9th Cir. 1993) (“[T]he Commission’s

findings describing an ‘unfair or deceptive’ trade practice under Section 5 do not necessarily describe a ‘dishonest or fraudulent’ one under Section 19.”).

Petitioners’ Achilles’ heel is that Section 19, without the backstop of Section 13(b)’s equitable remedies,

especially asset freezes, would be of limited value, if

not useless because assets would likely be dissipated.

For that reason, the only way petitioners can make a

coherent argument under Section 19 is to reimage

Section 13(b). Under petitioners’ theory, Section 13(b)

must authorize equitable remedies, including asset

freezes, when the FTC seeks preliminary relief, but

must not authorize equitable remedies when the FTC

seeks a permanent injunction. There is no textual support for bifurcating Section 13(b) in this way, and the

claim is at war with the Porter/Mitchell line of cases

that address equitable remedies, not interim relief.

Petitioners next argue that permitting the FTC to

obtain consumer redress under Section 13(b) discourages the Commission from issuing rules and using administrative adjudication to set norms that provide

guidance to the detriment of industry. Pet’rs’ Br. at

43. This argument suffers from two flaws. First, its

premise—that Congress did not intend for the FTC to

obtain consumer redress for proven violations of the

FTC Act—is wrong. See Section 1.A.1, supra. When

Congress enacted Section 13(b), it understood that

cease and desist orders are integral to the FTC’s policy-making function. See S. Rep. No. 93-151, at 30–31

(1973). Nevertheless, Congress enacted Section

13(b)’s permanent injunction provision knowing that

the FTC might opt to bring some enforcement actions,

13

especially those with significant consumer loss, in district court pursuant to Section 13(b), rather than proceed administratively.

Second, history refutes petitioners’ speculation

that Congress was somehow concerned that the FTC

might neglect its policymaking function. Both before

and after Section 19’s enactment, the FTC has decided

hundreds of cases administratively, including cases

presenting novel or substantial issues. See, e.g., In re

POM Wonderful, LLC, 155 F.T.C. 1 (2013), aff’d as

modified, 777 F.3d 478 (D.C. Cir. 2015) (FTC order

clarifying policy on health claim substantiation); In re

1-800 Contacts, 2018 WL 6078349 (F.T.C. 2018) (FTC

order resolving antitrust case alleging anticompetitive practices in the online contact lens market).

Petitioners also contend that Section 19’s requirement that the FTC prove that a practice “is one which

a reasonable man would have known under the circumstances was dishonest or fraudulent” is an essential precondition to redress, lacking in Section 13(b).

Pet’rs’ Br. at 26–27. For that reason, petitioners intuit, with no textual support, that Congress must

have intended for victims to retrieve illegally

scammed funds only where the perpetrator had sufficient “notice” that his or her practice was against the

law. Pet’rs’ Br. at 27, 28.

That argument is misplaced for many reasons.

For one, petitioners’ argument wrongly belittles the

significant burden of proof the FTC must meet to

prove a violation of Section 5. The FTC’s burden of

proof under Section 13(b) is at least comparable to

Section 19’s “reasonable man” standard. To establish

liability, the FTC must prove, inter alia, that the individual “was recklessly indifferent to the truth or falsity of the misrepresentations, or was aware of a high

14

probability of fraud and intentionally avoided learning the truth.” Commerce Planet, 815 F.3d 593, 600

(9th Cir. 2016) (citations omitted).

Finally, in rejecting the identical argument, the

Second Circuit underscored that petitioners’ reading

of “Section 19 would impose an untenable restriction

on Section 13(b) given that ‘[n]othing is more clearly a

part of the subject matter of a suit for an injunction

than the recovery of that which has been illegally acquired and which has given rise to the necessity for

injunctive relief.’” FTC v. Bronson Partners, LLC, 654

F. 3d 359, 367 (2d Cir. 2011) (quoting Porter, 328 U.S.

at 399).

B. Congress’s Oversight of the FTC’s Use of

Section 13(b) To Obtain Redress.

The interaction between Congress and the FTC

over the past four decades demonstrates not only that

Congress was aware that the FTC interpreted Section

13(b) to invoke the equitable authority of district

courts, but also that Congress approved of that use

and applauded the FTC’s success in returning ill-gotten gains.

1. The first extended discussion of the FTC’s use

of Section 13(b) to obtain equitable relief in court, including compensatory redress, took place during the

FTC’s 1983 Senate reauthorization hearing. Federal

Trade Commission Reauthorization: Hearing Before

the S. Comm. on Commerce, Sci., and Transp., 98th

Cong. 47–49 (1983) [hereinafter S. Hearing (1983)]. At

that point, the FTC’s fraud program, instituted by

Timothy Muris, then-Director of the FTC’s Bureau of

Consumer Protection, was an expanding part of the

FTC’s enforcement program. The FTC’s reliance on

Section 13(b) to obtain consumer redress had been validated the previous year by the Ninth Circuit’s ruling

15

in FTC v. H.N. Singer, Inc., 668 F.2d 1107, 1112–13

(9th Cir. 1982).

In response to a question posed by Senator Packwood about the FTC’s legislative priorities, FTC Commissioner and former Chair Michael Pertschuk explained that the FTC was using Section 13(b)’s injunctive authority in consumer protection cases and showcased the Ninth Circuit’s decision in Singer, “which

upheld the district court’s preliminary injunction

freezing assets, and finding that the court had the authority ultimately to grant the recission of consumer

contracts.” S. Hearing (1983) at 48. Commissioner

Pertschuk urged the FTC to expand the use of Section

13(b) to antitrust and deceptive advertising cases and

praised Chairman James C. Miller and Bureau Director Muris for having “recognized the potential of

13(b)” and “having encouraged more aggressive use of

the Commission’s authority under that section.” Id. at

48–49.

2. The next significant interaction between the

FTC and Congress came in 1993, when Congress substantially amended the FTC Act, in part to strengthen

the FTC’s ability to obtain consumer redress under

Section 13(b). The FTC informed Congress that a major obstacle “in combating consumer fraud is its inability to sue multiple defendants in a variety of jurisdictions.” S. Rep. 103-130, 1st Sess. 1993 at 15–16

(1993). In response, the Committee recognized that

“Section 13 of the FTC Act authorizes the FTC to file

suit to enjoin any violation of the FTC. The FTC can

go into court ex parte to obtain an order freezing assets, and is also able to obtain consumer redress.” Id.

The Committee added that the “FTC has used its section 13(b) injunction authority to counteract consumer

fraud, and the Committee believes that the expansion

of venue and service of process in the reported bill

16

should assist the FTC in its overall efforts.” Id. Congress thereafter enacted the Federal Trade Commission Act Amendments of 1994, Pub. L. No. 103-312,

§ 12, 108 Stat. 1961 (1994), to, inter alia, expand the

venue and service of process provisions of Section 13

so that the Commission could bring a single lawsuit

against all defendants involved in an illegal transaction. 6

3. Many other congressional hearings included

discussions of the FTC’s use of Section 13(b) for redress. For instance, in the 2007 Senate Reauthorization hearing, FTC Chairwoman Deborah Majoras began her opening statement by highlighting that

“[d]uring the past 3 fiscal years, our consumer protection work has produced more than 250 court orders

requiring defendants to pay more than $1.2 billion in

consumer redress.” Federal Trade Commission Reau-

thorization: Hearing Before the S. Comm. on Commerce, Sci., and Transp., 100th Cong., 1st Sess. 2

(Sept. 17, 2007).

Similarly, in the 2008 Senate Reauthorization

Hearing, FTC Chairman William Kovacic emphasized

that the FTC “has often used Section 13(b) of the FTC

Act, particularly, to obtain restitution for consumers

in consumer protection cases. In the past decade, the

Commission has brought over 600 consumer protec-

Congress’s 2006 Amendment to the Act underscores its ongoing commitment to consumer redress under Section 13(b). That

amendment added a provision to the Safe Web Act providing that

“[a]ll remedies available to the Commission with respect to unfair and deceptive acts and practices shall be available for acts

and practices described in this paragraph, including restitution

to domestic or foreign victims.” U.S. Safe Web Act of 2006, Pub.

L. No. 109-455, 120 Stat. 3372 (2006).

6

17

tion law enforcement actions using Section 13(b) under the FTC Act, through which courts have ordered

approximately $3 billion in redress for injured consumers.” Federal Trade Commission Reauthorization:

Hearing Before the S. Comm. on Commerce, Sci., and

Transp., 100th Cong., 2nd Sess. 16 (Apr. 8, 2008) (pre-

pared statement).

In 2010, during the economic downturn, the Senate Committee on Commerce, Science and Transportation held hearings on “The Role of the FTC in Protecting Consumers.” In the first hearing, FTC Chairman Jon Leibowitz highlighted the success of Section

13(b) redress cases against financial institutions, noting that “[o]ver the past 5 years, the FTC has filed

over 100 actions [under Section 13(b)] against providers of financial services, and in the past 10 years, the

Commission has obtained nearly half a billion dollars

in redress for consumers of financial services.” Finan-

cial Services and Products: The Role of the Federal

Trade Commission in Protecting Consumers, Hearing

Before the S. Comm. on Commerce, Sci., and Transp.,

111th Cong., 2nd Sess. 8 (Feb. 4, 2010).

In the second hearing, former FTC Chairman Muris recounted the history of the FTC’s use of Section

13(b):

We created the FTC’s modern anti-fraud program in 1981 when I was Director of the Bureau of Consumer Protection. The development of a vibrant anti-fraud program at the

FTC is a major success story. Fortunately, the

legal tools for such a program already existed;

in 1973, Congress had amended the FTC Act

in Section 13(b) to allow the Commission to

sue in Federal district court and obtain strong

18

preliminary and permanent injunctive relief,

including redress for defrauded consumers.

*

*

*

Almost from the inception of the §13(b) program, the Commission has not only halted

fraudulent schemes, but also pursued consumer redress and other potent equitable

remedies to benefit consumers. Very early in

the §13(b) consumer protection cases, the

Commission obtained, as ancillary to issuance

of permanent injunctions, provisional remedies such as a freeze of assets, expedited discovery, an accounting, and the appointment of

a receiver on the ground that these remedies

would insure the effectiveness of any final injunction ordered.

Financial Services and Products: The Role of the Federal Trade Commission in Protecting Consumers–

Part II, Hearing Before the Subcomm. on Consumer

Prot., Prod. Safety, and Ins. of the S. Comm. on Commerce, Sci., and Transp., 111th Cong., 2nd Sess. 55–

56 (Mar. 17, 2010). 7

Many additional hearings before and since have

explored the FTC’s use of Section 13(b) to provide redress to injured consumers, but amici have not found

any instance where Congress has expressed doubt

about the FTC’s authority to obtain consumer redress

The FTC files annual reports with Congress. FTC Annual Reports, Federal Trade Commission, https://www.ftc.gov/policy/re7

ports/policy-reports/ftc-annual-reports (last visited Nov. 20,

2020). These reports detail the FTC’s enforcement efforts and lay

out the consumer redress the FTC has obtained for consumers.

As one example, the 1982 report notes that for cases filed that

year, up to nearly $45 million may be returned to consumers in

redress. Annual Report 1982, at 11.

19

under Section 13(b). Nor, apparently, have petitioners

found any such evidence. Had Congress disagreed

with the FTC and the courts, it of course could have

acted, and it would not have strengthened the FTC’s

authority to obtain redress in 1994. And if Congress

intended Section 19 to deny redress authority under

Section 13(b), it could have said so, but instead Congress explicitly preserved all additional remedies. A

page of history speaks volumes, and petitioners’ claim

here cannot be squared with this history.

C. For Nearly Four Decades, Courts Uniformly

Held that Section 13(b) Authorizes Compensatory Relief.

1. Since Section 13(b)’s enactment, defendants

have repeatedly challenged the authority of courts to

order compensatory relief. Until the Seventh Circuit’s

ruling in Credit Bureau, every one of the eight circuit

courts to rule on the issue rejected these challenges,

and in every case, the court was unanimous. The

Ninth Circuit was the first to rule. In Singer, the

Ninth Circuit held that compensatory relief is available in Section 13(b) cases. 668 F.2d at 1112–13.

Singer, like the seven circuits that followed, anchored

its rulings on the decisions in Porter and Mitchell,

which held that equitable power is inherent in the

grant of injunctive authority. 668 F.2d at 1112–13.

For that reason, until the Seventh Circuit’s ruling,

courts had held that Section 13(b), which authorizes

injunctions, permits courts to order equitable relief,

including compensatory redress, in FTC enforcement

cases. All of these cases were decided after Section 19

was added to the FTC Act. 8

FTC v. Amy Travel Servs., Inc., 875 F.2d 564 (7th Cir. 1989);

FTC v. Sec. Rare Coin & Bullion Corp., 931 F.2d 1312 (8th Cir.

8

20

Porter held that Section 205(a) of the Emergency

Price Control Act of 1942, which authorized the Administrator of the Office of Price Administration to

seek a “permanent or temporary injunction, restraining order, or other order,” empowered district courts

to order not only prospective injunctive relief, but also

to compel the return of illegally exacted rents. 328

U.S. at 399. The Court stated that “[u]nless otherwise

provided by statute, all the inherent equitable powers

of the District Court are available for the proper and

complete exercise of that jurisdiction.” Id. at 398. The

Court added that:

[T]he comprehensiveness of this equitable jurisdiction is not to be denied or limited in the

absence of a clear and valid legislative command. Unless a statute in so many words, or

by a necessary and inescapable inference, restricts the court’s jurisdiction in equity, the

full scope of that jurisdiction is to be recognized and applied.

Id.; accord, e.g., California v. Am. Stores Co., 495 U.S.

271, 295 (1990); see also Weinberger v. RomeroBarcela, 456 U.S. 305, 313–15 (1982).

1991); FTC v. Gem Merch. Corp., 87 F.3d 466 (11th Cir. 1996);

FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1202 n.6 (10th

Cir. 2005); FTC v. Direct Mktg. Concepts, Inc., 624 F.3d 1, 14-15

(1st Cir. 2010); Bronson Partners, 654 F.3d 359 (2d Cir. 2011);

FTC v. Ross, 743 F.3d 886 (4th Cir. 2014). Cf. FTC v. Southwest

Sunsites, Inc., 665 F.2d 711,717-24 (5th Cir. 1982) (holding that

courts may impose equitable remedies under Section 13(b) but

reserving the compensatory redress question). District courts in

two of the remaining circuits—the D.C. and Fifth Circuits—have

reached the same conclusion. See, e.g., FTC v. Mylan Labs., Inc.,

62 F. Supp. 2d 25, 36–37 (D.D.C. 1999); FTC v. Kennedy, 574 F.

Supp. 2d 714, 724 (S.D. Tex. 2008).

21

Turning to compensatory redress, the Court ruled

that the “comprehensiveness of this equitable jurisdiction” encompasses the authority to require the reimbursement of unlawful rents. Porter, 328 U.S. at 398–

99. Restitution, the Court observed, is “within the

highest tradition of a court of equity.” Id. at 402. The

Court also emphasized that because “the public interest is involved in a proceeding of this nature, those equitable powers assume an even broader and more flexible character than when only a private controversy is

at stake.” Id. at 398.

Mitchell relied on Porter to hold that the Fair La-

bor Standards Act, which authorizes district courts to

“restrain violations” of the Act, 29 U.S.C. 217, empowers courts to award back-pay to employees who have

been unlawfully discharged. 361 U.S. at 296. In response to the employer’s argument that an order compelling back pay would be a “penalty” and thus beyond

the court’s equitable power, the Court held that “the

public remedy is not thereby rendered punitive, where

the measure of reimbursement is compensatory only.”

Id. at 293. The Court also echoed Porter, noting that

“[w]hen Congress entrusts to an equity court the enforcement of prohibitions contained in a regulatory

enactment, it must be taken to have acted cognizant

of the historic power of equity to provide complete relief in light of the statutory purposes.” Id. at 291-92.

Until 2019, every circuit court to address the Section 13(b) question unanimously applied Porter and

Mitchell and concluded that Section 13(b)’s grant of

injunctive authority invokes the district courts’ equitable power which includes, but is not limited to, authorizing restitution, rescission, or other forms of compensatory redress. See supra note 11.

22

2. This Court’s decision in Liu takes precisely the

same approach as the pre-2019 circuit court rulings

and thus explicitly rejects petitioners’ effort to entomb

the core holdings of Porter and Mitchell. To start, Liu

ratifies Porter’s holding that “[u]nless otherwise provided by statute, all the inherent equitable powers of

the District Court are available for the proper and

complete exercise of that jurisdiction.” Porter, 328

U.S. at 398. Liu embraces Porter’s ruling that the conferral of injunctive authority “invokes a court’s equity

jurisdiction, and thus ‘a decree compelling one to disgorge profits … may properly be entered.’” 140 S. Ct.

at 1943 (citing Porter, at 398-99). That is precisely the

theory that provides the foundation for redress under

Section 13(b).

Liu thus takes the wind out of petitioners’ sails.

To be sure, there are significant differences between

Section 13(b) and the statute at issue in Liu. But there

is no significant difference between Section 13(b) and

Section 205(a) of the Emergency Price Control Act.

Both statutes authorize broad injunctive relief; neither limits the equity jurisdiction that attaches. And

the statute at issue in Mitchell, 29 U.S.C. 217, is even

more sparse; it simply authorizes courts to “restrain

violations” of the Fair Labor Standards Act. 9

The FTC has successfully sought compensatory

redress under Section 13(b) for nearly four decades.

Until last year, courts uniformly agreed with the

Porter added that its judgment could also be supported by the

“other order” language. The Court in Mitchell found that the

“other order” holding was independent of its holding on the equitable nature of the remedy, which was based on “the language of

the statute” conferring injunctive authority, that provided “affirmative confirmation of the power to order reimbursements.”

361 U.S. at 291.

9

23

FTC’s construction of Section 13(b), relying on the

foundation laid in Porter and Mitchell. Liu’s reaffirmance of those cases dispels any question that the inherent equitable powers of the district courts are not

displaced unless Congress says so, either “explicitly,

or by a necessary and inescapable inference.” Porter,

at 398. Here, Congress has been explicit that the

courts have read Section 13(b) correctly, and Congress’s approbation should end this case.

Last, but hardly least, Liu holds “that a disgorgement award that does not exceed a wrongdoer’s net

profits and is awarded for victims is equitable relief.”

140 S. Ct. 1936, 1940 (2020). That holding applies

with equal force to compensatory redress under Section 13(b) because the FTC seeks only “restitution of

amounts that were paid to the defendant directly by

the consumers.” See, e.g., Bronson Partners, 654 F.3d

at 374. Liu stresses that:

[A] remedy tethered to a wrongdoer’s net unlawful profits, whatever the name, has been a

mainstay of equity courts. In Porter v. Warner

Holding Co., 328 U.S. 395 (1946), the Court

interpreted a section of the Emergency Price

Control Act of 1942 that encompassed a “comprehensiv[e]” grant of “equitable jurisdiction.”

Id., at 398. “[O]nce [a District Court’s] equity

jurisdiction has been invoked” under that provision, the Court concluded, “a decree compelling one to disgorge profits ... may properly be

entered.” Id. at 398–399.

140 S. Ct. at 1943. Again, all the FTC asks a court to

do is restore injured consumers to the status quo ante,

by returning to consumers only the amounts that were

paid to the defendant directly by the consumers.

24

Justice Holmes’s wisdom that a page of history is

worth a volume of logic is especially apt in this case.

There is nothing new about the FTC’s use of Section

13(b) for a cause that has deep roots in equity doctrine. Equity has never favored the wrongdoer; and

equity has always stood ready to order restitution of

monies acquired by fraud. These principles underlie

the FTC’s decades-long use of Section 13(b) to force

wrongdoers to return their ill-gotten gains. This Court

should affirm the ruling below.

II. Petitioners Err in Attacking the Soundness of

Porter and Mitchell.

Petitioners argue that whatever force Porter and

Mitchell once had, more recent cases limiting equity

jurisdiction have eroded their persuasive force, and

thus they can no longer support the reading of Section

13(b) embraced by the FTC, Congress, and prior court

decisions. Pet’rs’ Br. at 17, 24-25, 36-39. Petitioners’

argument suffers from two flaws. First, petitioners

have it backwards. The decisions petitioners rely on

are wholly consonant with Porter and Mitchell, which

recognize that Congress may limit or exclude equitable jurisdiction. Second, petitioners ignore the principles of stare decisis, and only by ignoring those principles can the petitioners so blithely seek to retire two

mainstay precedents. 10

Petitioners and their allies make the far-fetched claim that

restitution is not an injunction. “Nothing is more clearly part of

the subject matter for an injunction than the recovery of that

which has been illegally acquired and which has given rise to the

necessity for injunctive relief.” Porter, 328 U.S. at 399; accord

Weinberger, 456 U.S. at 311–14 (and cases cited therein).

10

25

A. There is No Valid Legislative Command

Limiting Section 13(b)’s Equity Jurisdiction.

Petitioners rest their arguments mainly on two

cases that they claim undermine the reasoning of Porter and Mitchell. Pet’rs’ Br. at 17, 24–25, 36–39. But

the cases petitioners cite involve the interpretation of

statutes in which Congress provided “clear and valid

legislative command[s]” limiting the district courts’

equity jurisdiction. Porter, 328 U.S. at 398. Far from

being limitations on Porter and Mitchell, these cases

are applications of Porter’s and Mitchell’s principles.

First, petitioners contend that the Court in Meghrig v. KFC W., Inc., 516 U.S. 479 (1996), displaced

Porter’s holding that, absent a contrary legislative

command, Congress invokes the full measure of a district court’s equitable jurisdiction when it authorizes

injunctive relief. See Pet’rs’ Br. at 17, 38–39. That argument misreads Meghrig.

Meghrig held that the citizen-suit provision of the

Resource Conservation and Recovery Act of 1976

(RCRA) did not authorize a private party, KFC, to recover the costs of a past clean-up of toxic waste. The

Court did not frame its decision as a departure from

Porter, as petitioners claim. Pet’rs’ Br. at 38–39. Rather, the Court found that Congress, in RCRA and related legislation, firmly signaled that it did not intend

for RCRA to authorize private parties to invoke the

Act to recover past cleanup costs. See, e.g., 516 U.S. at

484. Among other reasons, the Court noted that the

citizen suit provision of RCRA permitted suits where,

but only where, the “disposal of any solid or hazardous

waste … may present an imminent and substantial

endangerment to health or the environment,” and

26

that RCRA provided only injunctive relief, not damages. Id. (emphasis in original). KFC’s claim met neither condition.

The Court also emphasized that “if RCRA were designed to compensate private parties for their past

cleanup efforts, it would be a wholly irrational mechanism for doing so” because, due to RCRA’s notice provision, “[t]hose parties with insubstantial problems,

problems that neither the State nor the Federal Government feel compelled to address, could recover their

response costs, whereas those parties whose waste

problems were sufficiently severe as to attract the attention of Government officials would be left without

a recovery.” Id. at 486-87.

Fairly read, the Meghrig Court applied Porter’s

holding that equity jurisdiction may be displaced by a

“clear and valid legislative command,” 328 U.S. at

398, and concluded that “Congress did not intend for

a private citizen to be able to undertake a cleanup and

then proceed to recover its costs under RCRA.” Meghrig, 516 U.S. at 487.

Petitioners’ reliance on Meghrig underscores the

weakness of their claim. The contrast between Meghrig and the FTC’s use of Section 13(b) could not be

sharper. For one thing, the damages remedy KFC

sought was legal, not equitable, in nature. The relief

the FTC seeks under Section 13(b), restitution or recission, falls within the heartland of equity. Only in a

small minority of cases—where consumer redress is

impossible or infeasible—do disgorged funds go to the

Treasury. For another, the Court’s opinion in Meghrig

drives home the stark incongruity between the relief

KFC requested and RCRA’s statutory goals. The relief

the FTC seeks under Section 13(b) directly advances

the goals Congress set for the FTC, namely, to protect

27

consumers in the marketplace. And finally, the Meghrig Court applies Porter’s analysis in explaining

why RCRA cannot be read to authorize private party

damage actions. 11

Nor does petitioners’ reliance on Great-West Life

& Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002),

fare any better. Great-West involved a provision of the

Employee Retirement Income Security Act authorizing private parties to file civil actions seeking injunctions and “other appropriate equitable relief.” 29

U.S.C. 1132(a)(3). The question was whether Congress intended “equitable relief” to include the petitioners’ request for a contractual remedy. The Court

said “no”: “[P]etitioners seek, in essence, to impose

personal liability on respondents for a contractual obligation to pay money—relief that was not typically

available in equity.” 534 U.S. at 210. And the Court

added that “[a] claim for money due and owing under

a contract is ‘quintessentially an action at law.’” Id.

(citing Wal-Mart Stores, Inc. v. Wells, 213 F.3d 398,

401 (7th Cir. 2000) (Posner, J.)). 12

It is not clear whether petitioners argue that Meghrig overruled Porter, or that Meghrig rejected Porter as irrelevant to construing the RCRA provision at issue in that case. See Pet’rs’ Br.

at 38–39 (“The Court [in Meghrig] therefore refused to follow the

Porter ‘line of cases.’” (citing Meghrig)). Either way, petitioners

mischaracterize Meghrig as rejecting Porter outright rather than

concluding, consistent with Porter, that Congress intended to restrict the equitable remedies available in RCRA citizen suits. Petitioners’ arguments—not only about Meghrig, but also that a

statute authorizing injunctions cannot also authorize restitution

orders—conflict with Porter and Mitchell and would, if accepted,

render those cases dead letters.

11

Petitioners also contend that Great-West imposes a tracing

requirement on equitable remedies, which the FTC cannot meet.

Pet’rs’ Br. at 23, 46. This contention is also wrong and has been

12

28

Porter and Mitchell remain good law. The cases

petitioners rely on apply Porter and Mitchell, not displace them. As Liu holds, Porter and Mitchell’s holding that a grant of injunctive authority carries with it

“all the inherent equitable powers of the District

Court,” including the power to order compensatory redress, remains the law. 140 S. Ct. at 1943.

B. Stare Decisis Further Refutes Petitioners’

Argument.

The linchpin of petitioners’ argument is that the

Court’s reasoning in Porter and Mitchell, which for

decades has guided lower courts to interpret Section

13(b) to authorize compensatory relief, is flawed and

should now be rejected. As we have already explained,

that argument is meritless, as underscored by this

Court’s continued reliance on Porter. See, e.g., Liu,

140 S. Ct. at 1943.

But even if the Court were to take petitioners’ argument seriously, it should be rejected. The Court

does not sweep away longstanding precedent lightly.

“Overruling precedent is never a small matter.” Kisor

v. Wilkie, 139 S. Ct. 2400, 2422 (2019) (quoting Kimble v. Marvel Entertainment, LLC, 576 U.S. 446, 455

(2015)). And “[a]dherence to precedent is ‘a foundation

stone of the rule of law.’” Id. (quoting Michigan v. Bay

Mills Indian Community, 572 U.S. 782, 798 (2014)).

Petitioners’ argument here is especially problematic because petitioners have not asked Congress to

uniformly rejected in the lower courts. The best refutation of this

argument is Judge Lynch’s opinion in Bronson Partners, 654

F.3d at 370–75. See also Virginian R. Co. v. Railway Employees,

300 U.S. 515, 552 (1937) (and cases cited therein).

29

rectify what they claim is an error. As this Court emphasized in Kimble, “unlike in a constitutional case,

critics of our ruling can take their objections across

the street, and Congress can correct any mistake it

sees.” 576 U.S. at 456. To be sure, petitioners have eschewed that path because Congress has at every turn

approved of the FTC’s use of Section 13(b) to obtain

compensatory redress. But Congress’s approval of the

FTC’s interpretation of Section 13(b) is an argument

against the Court’s intervention, not in support.

Finally, petitioners ask this Court to overrule not

a single case, but a long line of precedents—“each one

reaffirming the rest and going back 75 years or more.”

Kisor, 139 S. Ct. at 2422-23. This Court decided Porter

in 1946, but Porter has been cited approvingly by this

Court dozens of times, and Porter relied on cases going back to 1836. 328 U.S. at 398 (quoting Brown v.

Swan, 35 U.S. 497 (1836) (“The great principles of equity, securing complete justice, should not be yielded

to light inferences, or doubtful construction.”). Abandoning Porter would inevitably cast doubt on many

other settled constructions of the reach of equity jurisdiction and thus destabilize the law. Cf. Kisor, 139 S.

Ct. at 2422.

Petitioners provide no basis for this Court to set

aside Porter and Mitchell, and the decision below

should be affirmed.

30

CONCLUSION

For the reasons stated above, amici respectfully

request that the Court affirm the judgment below.

Respectfully submitted.

DAVID C. VLADECK

Counsel of Record

RACHEL L. FRIED

GEORGETOWN UNIVERSITY

LAW CENTER

CIVIL LITIGATION CLINIC

600 New Jersey Ave. NW

Washington, DC 20001

(202) 661-6614

vladeckd@georgetown.edu

Counsel for Amici Curiae

DECEMBER 2020