Opinion ID: 223605
Heading Depth: 2
Heading Rank: 2

Heading: Ancillary Remedies Under Section 13(b) of the FTC Act

Text: Section 13(b) of the FTC Act provides: in proper cases the [FTC] may seek, and after proper proof, the court may issue, a permanent injunction. 15 U.S.C. § 53(b). While the provision's express text refers only to injunctive relief, courts have consistently held that the unqualified grant of statutory authority to issue an injunction under [S]ection 13(b) carries with it the full range of equitable remedies, including the power to grant consumer redress and compel disgorgement of profits. FTC v. Gem Merch. Corp., 87 F.3d 466, 468 (11th Cir.1996); see also FTC v. Freecom Commc'ns, Inc., 401 F.3d 1192, 1202 n. 6 (10th Cir.2005); FTC v. Pantron I Corp., 33 F.3d 1088, 1102 (9th Cir.1994); FTC v. Sec. Rare Coin & Bullion Corp., 931 F.2d 1312, 1314-15 (8th Cir.1991); FTC v. Amy Travel Serv., Inc., 875 F.2d 564, 571-72 (7th Cir.1989); FTC v. Sw. Sunsites, Inc., 665 F.2d 711, 718 (5th Cir.1982). We join these courts and hold that Section 13(b) of the FTC Act permits courts to grant ancillary equitable relief, including equitable monetary relief. Accord Verity, 443 F.3d at 66 (assuming without deciding the same). In Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946), the Supreme Court held that the Emergency Price Control Act of 1942  which permitted a federal administrator to seek a permanent or temporary injunction, restraining order, or other order  authorized the administrator to obtain not just injunctive relief but also a money judgment. The Court provided two independent reasons for its conclusion. First, the Court explained: [An order for disgorgement] may be considered an equitable adjunct to an injunction decree. Nothing is more clearly a part of the subject matter of a suit for an injunction than the recovery of that which has been illegally acquired and which has given rise to the necessity for injunctive relief.... [W]here, as here, the equitable jurisdiction of the court has properly been invoked for injunctive purposes, the court has the power to decide all relevant matters in dispute and to award complete relief even though the decree includes that which might be conferred by a court of law. Id. at 399, 66 S.Ct. 1086 (internal citations and footnote omitted). [2] Second, relying on the text of the Emergency Price Control Act, the Court reasoned that a money judgment could be an other order that is appropriate and necessary to enforce compliance with the act. Id. at 400, 66 S.Ct. 1086. The Court subsequently made clear that the two bases for its holding in Porter were indeed independent. In Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960), the Court concluded that a provision of the Fair Labor Standards Act that authorized the district court to restrain violations of [the statute] carried with it the power to award backpay to employees who had been wrongfully discharged. After citing Porter's holding that a district court empowered to enjoin statutory violations may award such ancillary remedies as necessary to afford complete relief, the Court went on to note: The applicability of this principle is not to be denied, either because the Court there considered a wartime statute, or because, having set forth the governing inquiry, it went on to find in the language of the statute affirmative confirmation of the power to order reimbursement. Mitchell, 361 U.S. at 291, 80 S.Ct. 332; accord SEC v. Texas Gulf Sulphur Co., 446 F.2d 1301, 1307-08 (2d Cir.1971) (finding in the securities law context that equitable ancillary relief may be awarded, despite the fact that the statute referenced only a permanent or temporary injunction). Like the provision at issue in Mitchell, Section 13(b) contains no reference to other orders. Nonetheless, the principle that the comprehensiveness of [the district court's] equitable jurisdiction is not to be denied or limited in the absence of a clear and valid legislative command, Mitchell, 361 U.S. at 291, 80 S.Ct. 332, quoting Porter, 328 U.S. at 398, 66 S.Ct. 1086, applies with equal force to actions under Section 13(b). By empowering courts to issue injunctive relief, Section 13(b) invokes the equitable jurisdiction of the court. A money judgment is thus permitted as a form of ancillary relief because, once its equitable jurisdiction has been invoked, the court has the power to decide all relevant matters in dispute and to award complete relief. Porter, 328 U.S. at 399, 66 S.Ct. 1086. Bronson disputes this conclusion by pointing out that unlike Section 13(b), Section 19 of the FTC Act, 15 U.S.C. § 57b(b), expressly provides for monetary damages. [3] Bronson contends that the broad language of Section 19 limits Section 13(b) to its terms. We are unpersuaded. Section 19 does not purport to limit Section 13(b). Quite the contrary, Section 19 states that [n]othing in this section shall be construed to affect any authority of the Commission under any other provision of law. 15 U.S.C. § 57b(e). Moreover, Bronson's suggested reading of Section 19 would impose an untenable restriction on Section 13(b) given that [n]othing is more clearly a part of the subject matter of a suit for an injunction than the recovery of that which has been illegally acquired and which has given rise to the necessity for injunctive relief. Porter, 328 U.S. at 399, 66 S.Ct. 1086. In sum, Section 13(b) of the FTC Act permits courts to award not only injunctive relief but also ancillary relief, including monetary relief.