US Chamber: FTC Shouldn’t Use States to Circumvent Supreme Court
The FTC shouldn’t pursue enforcement with state attorneys general as a way to circumvent the U.S. Supreme Court’s elimination of the agency’s redress authority, the U.S. Chamber of Commerce wrote the FTC in comments posted Tuesday.
The agency closed comments Monday on its inquiry into collaborative efforts with state enforcers (see 2306070035). A unanimous Supreme Court ruled in 2021 the FTC doesn’t have the authority to seek equitable monetary relief in federal court using Section 13(b) of the FTC Act (see 2104220068). The FTC and members of Congress from both parties have sought a legislative fix to fill the gap. A bipartisan group of 30 state attorneys general lamented the loss of that authority, in comments posted Tuesday. Consumer groups urged the agency to use state collaboration to fill the void.
State consumer protection laws are limited to conduct that occurs within a state, and “attempts to extraterritorially enforce state consumer protection laws have regularly been blocked by courts,” the Chamber said. “Joint enforcement should not be used as a creative means of circumventing statutory limitations on either the state or federal government’s role as a plaintiff.”
Collaboration between the FTC and states is less effective when one side can’t obtain restitution, the state AGs commented. The group was led by AGs in Connecticut, Illinois, New Hampshire and Tennessee and included enforcers from Arizona, California, Colorado, D.C., Florida, New York, North Carolina, Oklahoma, Ohio, South Dakota and Wisconsin. They noted the FTC previously had a dedicated office for locating consumers and getting them their money, but many states don’t have the resources to do that. “The potential loss of the FTC as a resource to do the work of delivering restitution to harmed consumers is a potentially significant loss to the states and to the collaboration between the states and the FTC,” the AGs said.
“Enhanced collaboration between the states and the FTC can further strengthen the states’ ability to secure remedies for wronged consumers,” Michigan AG Dana Nessel said. The Democrat noted Michigan’s collaboration with other states on issues like illegal robocalls and data breaches.
Two former AG staffers said in separate comments the Supreme Court decision in AMG Capital Management v. FTC “might actually be the impetus to AGs and the FTC bringing more joint actions together than ever before.” Beth Chun, a former consumer protection attorney for Texas, and Abigail Stempson, a former attorney with the National Association of Attorneys General, noted Congress recognized the importance of federal-state enforcement collaboration and granted AGs the “power to enforce many federal consumer protection laws.”
The AMG decision removed a “major” FTC enforcement tool, but the FTC can “help close that gap” by partnering with AGs, said consumer advocates. The National Consumer Law Center co-signed comments with Consumer Reports and the Consumer Federation of America. They said joint enforcement is now a “critical tool to fill in the tremendous gap created by the Supreme Court.” State laws sometimes go further than the FTC Act into consumer protection, but state enforcers can’t always do the work that’s been traditionally accomplished by the FTC, said Truth in Advertising. The consequences of AMG are real, said TINA: “The glaring reality is that until the Commission can obtain equitable monetary relief under 13(b), wrongdoers will be free to steal, lie and cheat their way to riches.”