© Reuters. FILE PHOTO: A police officer is seen in front of the United States Supreme Court building in Washington.
By Lawrence Hurley WASHINGTON (Reuters) – US Supreme Court justices expressed concern Wednesday in a case involving a high-profile payday lender that the Federal Trade Commission has overreached. your authority in seeking illicit profits from companies that engage in deceptive practices. The judges heard arguments in a dispute involving businessman and car driver Scott Tucker, who is serving a prison sentence for crimes related to the same underlying conduct at issue in court. Tucker’s attorneys have said the FTC lacked the authority to seek restitution under a section of a law called the Federal Trade Commission Act that allows the agency to sue violators of the law and authorizes judges to issue injunctions. permanent judicial. The legal question is whether judges have the authority under that provision to order defendants to return money that consumers gave up. Both conservative and liberal justices questioned whether the FTC was using the correct provision of the law to seek ill-gotten gains, noting that there is another section of the law that could allow the agency to seek refunds, although it might be more difficult to do so. . Conservative judges skeptical about the power of independent federal agencies expressed similar concerns about the FTC’s use of its enforcement power. “With good intentions, the agency pushes the boundaries and extends the legal language to do good or prevent evil. The problem is that this results in a transfer of power from Congress to the executive branch on whether to exercise this authority,” the judge said. conservative Brett. Kavanaugh said. Liberal Judge Elena Kagan noted that the FTC’s use of the provision in question appeared to be based on convenience. “It’s clearly better from the agency’s perspective,” Kagan said. Tucker and his company, AMG Capital Management, are appealing a ruling by the San Francisco-based United States Court of Appeals for the Ninth Circuit that approved the FTC’s authority to recover $ 1.27 billion in illicit proceeds. AMG offers consumers online high-interest short-term payday loans that are automatically renewed. He was sued by the FTC in 2012 for improper disclosures about the terms of the loans. AMG agreed to stop the practices that the FTC had opposed, but refused to return the money. If the court chooses not to curb the agency’s authority, it would be because until recently the courts have sided with the FTC on the issue since the provision was enacted in 1973. “My question is, still, is it close and the lower courts have been uniform for 50 years. We cannot undo everything that was decided, “said liberal Judge Stephen Breyer. The FTC and its supporters have said that a ruling in favor of Tucker would seriously reduce his ability to repair the financial damage caused by scammers. Tucker in 2018 was sentenced to 16 years and eight months in prison after being convicted of violating federal loan and extortion laws. After several states filed lawsuits over the loans, prosecutors said, Tucker entered into bogus relationships with Native American tribes. By claiming his companies were tribal-owned, prosecutors said, Tucker was able to protect the companies from lawsuits through tribal sovereign immunity. The Supreme Court ruling will affect another case the justices agreed to hear in which the FTC seeks $ 5.2 million in illicit profits from another company, the Credit Bureau Center. The Supreme Court’s consideration of legal disputes comes at a time when the United States is awash with scams, with some taking advantage of fears about the spread of the coronavirus to scam unsuspecting consumers. Robocalls flood landlines promoting fake medical devices and other misleading offers. Since they often originate overseas, US law enforcement has a difficult time fighting scammers.