Document ID: ./input/supremecourt_opinions/opinions/19pdf/18-1501_8n5a.pdf
Page Number: 30

Cite as:  591 U. S. ____ (2020) 

7 

THOMAS, J., dissenting 

erty identified as belonging in good conscience to the plain-
tiff . . . clearly be traced to particular funds or property in
the defendant’s possession.”  Great-West Life & Annuity Ins. 
Co. v. Knudson, 534 U. S. 204, 213 (2002).  Disgorgement
reaches further because it has no tracing requirement.  By
using a word with no history in equity jurisprudence, the
SEC  and  courts  have  made  it  possible  to  circumvent  the 
careful limitations imposed on other equitable remedies.

One need look no further than the SEC’s use of disgorge-
ment to see the pitfalls of the majority’s acquiescence in its
continued use as a remedy.  The order in Texas Gulf Sul-
phur did not depart too far from equitable principles.  The 
award  was  limited  to  the  defendants’  net  profits  and  the 
funds were held in escrow and were at least partly available 
to compensate victims, 446 F. 2d, at 1307.  It did not take 
long,  however,  for  a  district  court  to  order  a  defendant  to 
turn  over  both  his  profits  and  the  investment  “income 
earned  on  the  proceeds.”  Manor  Nursing  Centers,  458 
F. 2d, at 1105.  And in the case before us today, just a half 
century  later,  disgorgement  has  expanded  even  further. 
The award is not limited to net profits or even money pos-
sessed  by  an  individual  defendant  when  it  is  imposed 
jointly and severally.  See ante, at 5.  And not only is it not
guaranteed to be used to compensate victims, but the impo-
sition  of  over  $26  million  in  disgorgement  and  approxi-
mately  $8  million  in  civil  monetary  penalties  in  this  case 
seems to ensure that victims will be unable to recover any-
thing  in  their  own  actions.  As  long  as  courts  continue  to 
award  “disgorgement,”  both  courts  and  the  SEC  will  con-
tinue to have license to expand their own power. 

The majority’s decision to tame, rather than reject, dis-
gorgement will also cause confusion in administrative prac-

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if he were permitted to retain it.”  Restatement of Restitution §160, at 
640–641.