Equitable Monetary Relief Under the FTC Act: An Opportunity for a Marginal Improvement

47 Pages Posted: 6 Mar 2020

See all articles by James C. Cooper

James C. Cooper

George Mason University - Antonin Scalia Law School, Faculty

Bruce H. Kobayashi

George Mason University - Antonin Scalia Law School

Date Written: March 3, 2020

Abstract

Optimal remedies should be grounded in consumer harm. The caselaw interpreting the FTC's ability to obtain equitable monetary relief, however, has strayed far from this benchmark. Rather than requiring the FTC to show the marginal impact of deception, courts presume that everyone exposed to deception is harmed based on the fiction that the FTC has proven materiality. This approach is likely to overstate consumer harm in most circumstances involving a legitimate product, which will reduce the amount of beneficial marketplace information available to consumers. Several cases that challenge the FTC's legal authority to use 13(b) to obtain equitable monetary relief are awaiting certiorari determinations, which have led some to call for Congressional intervention to fix the statutory problem. Regardless of the outcome of this process, we see this turn of events as an opportunity for the FTC to recalibrate its consumer protection remedies to more closely mirror consumer harm. It should do so by focusing on the marginal impact of deception, a task that could be accomplished through Congressional action or on the FTC's own initiative. Regardless of the path, this marginal improvement would be an important one for consumers.

Keywords: FTC, Remedies, Consumer Protection, Advertising, Sanctions

JEL Classification: L510, K20, K23, K21, K29

Suggested Citation

Cooper, James C. and Kobayashi, Bruce H., Equitable Monetary Relief Under the FTC Act: An Opportunity for a Marginal Improvement (March 3, 2020). George Mason Law & Economics Research Paper No. 20-06, Available at SSRN: https://ssrn.com/abstract=3549899 or http://dx.doi.org/10.2139/ssrn.3549899

James C. Cooper (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-9582 (Phone)

Bruce H. Kobayashi

George Mason University - Antonin Scalia Law School ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8034 (Phone)
703-993-8088 (Fax)

HOME PAGE: http://mason.gmu.edu/~bkobayas

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