“After today’s decision, the lower courts must apply the FTC Act as it is written, not as the FTC would prefer it to be read.”
—Cory Andrews, WLF General Counsel & Vice President of Litigation
(Washington, DC)—The U.S. Supreme Court today corrected a widespread misreading of a Federal Trade Commission (FTC) Act remedy provision. The unanimous ruling was a victory for Washington Legal Foundation, which filed an amicus brief urging the Court to overturn a Ninth Circuit decision that granted the FTC powers Congress never gave it. WLF’s brief was joined by the Allied Educational Foundation.
Section 13(b) of the FTC Act empowers the FTC to sue, in federal court, to obtain an injunction against deceptive trade practices. At least seven courts of appeals have said, however, that “injunction” in § 13(b) unlocks the entire vault of equitable remedies. Today the Supreme Court announced that all those decisions are wrong. That ruling restores modern and binding rules of statutory interpretation to the FTC Act.
In its amicus brief, WLF argued that the lower courts’ rewriting of § 13(b) resembles the English Common-law courts’ use of the “equity of the statute,” a doctrine that empowered a judge to enforce his subjective sense of justice rather than a law’s text. The equity of the statute arose in the Late Middle Ages. It gradually died out, however, as judges came to realize that it is inconsistent with democratic governance.
In the mid-twentieth century, the Supreme Court briefly adopted a new version of the equity of the statute to “imply” new rights and remedies into federal laws. The courts of appeals relied on that jurisprudence to justify stretching § 13(b) well beyond its text. But as WLF explained in its brief, and the Supreme Court today agreed, it is solely for Congress to decide how, and by whom, statutes are enforced.