In a big win for business the United States Supreme Court has determined that the Federal Trade Commission (FTC) cannot require companies to pay compensation to consumers even if they are found to have engaged in unfair practices in commerce.

In AMG Capital Management, LLC v. Federal Trade Commission the FTC filed a Complaint against Scott Tucker and his companies alleging deceptive payday lending practices by him and his companies in violation of The Federal Trade Commission Act. The United States District Court found in favor of the FTC, issued a permanent injunction against permitting future violations of the Act, and ordered Tucker and his companies to pay $1.27 billion in restitution and disgorgement. Tucker and his companies appealed. The basis for their appeal was Tucker’s contention that the Act did not authorize restitution and disgorgement as remedies. The Ninth Circuit Court of Appeals rejected Tucker’s claim and Tucker appealed to the United States Supreme Court was granted.

The Supreme Court reversed the Ninth Circuit and remanded the case. It concluded the Act does not authorize equitable monetary relief.

Do not be so sure things will stay this way. Many legislative watchers expect Congress to amend the act to permit such recoveries. But for now, those violating the Federal Trade Commission Act do not have to worry about the FTC ordering them to pay back their ill-gotten gains. However, they may want to look over their shoulder at collective actions by their victims.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.