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The FTC has two major enforcement mechanisms available to it: The normal administrative one where the agency initiates an administrative proceeding, makes a jud
by xenadu02 4y ago
The FTC has two major enforcement mechanisms available to it: The normal administrative one where the agency initiates an administrative proceeding, makes a judgement, then more or less must restart the process with a court case to enforce that judgement. The second mechanism allows it to go directly to a court.
Exactly what the FTC is allowed to ask for is a bit convoluted because the law isn't very clearly written. One reading says they can do the common sense thing by demanding profit from illegal conduct be returned and impose punitive damages - especially on repeat offenders, along with imposing penalties for damage done to the overall market. The other reading says they can only ask for money to reimburse specific consumers for specific damages (so as a consumer your time, aggravation, etc are worth $0; damage to your competitors who were operating fairly don't count). And by the more restrictive reading the direct-to-court route only allows them to seek an injunction, no damages.
Unfortunately SCOTUS recently said the FTC is not allowed to seek anything except an injunction via the direct-to-court path and if that case is any indicator it is likely courts will also prohibit punitive damages and profit disgorgement via the administrative route as well. That severely restricts the ability of the FTC to punish companies.
For example a recent case involved DreamCloud mattresses that claimed they were made in the USA with 100% USA materials... when in fact some of their mattresses were pure imports and others were made in the USA of imported materials. Under the new court rulings the FTC has to show how this harmed the purchasers of the mattresses and can only seek money to compensate those consumers for those damages. The FTC can no longer impose penalties for the obviously flagrant conduct, for the harm they did to the overall marketplace, for the harm to competitors (both those who do and do not manufacture in the USA), etc. Anything that doesn't have a directly measurable monetary value is irrelevant. And if DreamCloud does the same thing again it hardly matters because the FTC is limited to the same remedies.
We need Congress to pass an act cleaning up the FTC's enforcement powers.
- hirundo 4y ago> We need Congress to pass an act cleaning up the FTC's enforcement powers. Which is the constitutional design: Article 1. Section 1. All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives. In West Virginia v. EPA SCOTUS delivered a brush-back pitch, constraining the above to "major questions". Where that line is drawn very much sets the limits of the administrative state. Taken with restraint versus expansively it can make the difference between a small government constrained in the detail of its rulemaking by the size of the legislature, and an authoritarian government with a consitutionally unlimited inventory of unelected rule makers.
- notacoward 4y agoHow did we get from enforcement powers (GP) to legislative powers (you)? They're not the same thing. It might have seemed like a good excuse to fulminate - see guidelines about that BTW- about the "administrative state" but it's really kind of a big non sequitur.
- hirundo 4y ago> How did we get from enforcement powers (GP) to legislative powers (you)? They're not the same thing. Right here: GP: Exactly what the FTC is allowed to ask for is a bit convoluted because the law isn't very clearly written. It would be nice if enforcement and legislative powers were clearly distinct, but particularly in ambiguous cases, they overlap. The scope of that ambiguity is large enough to make a large difference in the scope of the federal government, for good or not.
- deleted 4y ago[deleted]