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Supreme Decisions: High Court Weighing FTC’s Enforcement Authority

By Leonard L. Gordon, Mary M. Gardner, and Michael A. Munoz

This fall, the U.S. Supreme Court is set to hear two consolidated cases that will have a far-reaching impact on the advertising and marketing industry. The issue before the court is whether the Federal Trade Commission (FTC) can obtain equitable monetary relief, such as disgorgement, under Section 13(b) of the FTC Act — and, if so, how that relief might be measured.

Although, on its face, Section 13(b) only authorizes the FTC to seek a permanent injunction as a remedy to “unfair methods of competition” and “unfair or deceptive acts or practices,” until recently, courts have routinely held that the FTC’s authority to seek equitable monetary relief under Section 13(b) is implied in their authority to obtain injunctive relief. Recent challenges to the FTC’s authority — and subsequent shift in lower courts’ jurisprudence — have brought this is