The Supreme Court’s recent decision in AMG Capital Management v. Federal Trade Commission was not a Foreign Corrupt Practices Act case.
Nor was the issue presented directly related to the FCPA.
Nevertheless, AMG Capital Management was FCPA relevant because once again the Supreme Court bench slapped a wayward enforcement agency and reminded the legal community of the following basic point: a law means what it says and what Congress intended it to mean – not what an enforcement agency wishes a law said.
The statute at issue in AMG Capital Management was Section 13(b) of the Federal Trade Commission Act which authorizes the FTC to obtain, “in proper cases,” a “permanent injunction” in federal court against “any person, partnership, or corporation” that it believes “is violating, or is about to violate, any provision of law” that the Commission enforces.
The question presented in the case was whether this statutory language authorizes the FTC to seek, and a court to award, equitable monetary relief such as restitution or disgorgement.
In a unanimous decision authored by Justice Stephen Beyer, the court concluded no.
The relatively short decision is heavy on the specifics of the relevant statutory scheme and one argument the FTC advanced in support of its position is that it uses Section 13(b) to “win equitable monetary relief directly in court with great frequency.”
The court however was not persuaded and stated that its task was not to decide whether the FTC’s use of Section 13(b) was “desirable” but rather to “answer a more purely legal question: did Congress, by enacting §13(b)’s words, “permanent injunction,” grant the Commission authority to obtain monetary relief directly from courts, thereby effectively bypassing the process set forth in [other relevant statutes].”
The FTC also argued “that Congress has in effect twice ratified that interpretation in subsequent amendments to the Act.” Once again the court was not persuaded and stated that when “Congress has not comprehensively revised a statutory scheme but has made only isolated amendments . . . [i]t is impossible to assert with any degree of assurance that congressional failure to act represents affirmative congressional approval of [a court’s] statutory interpretation.”
Restating a general point made in several other recent Supreme Court decisions involving enforcement agency overreach (see here), the court stated: “if the Commission believes that authority too cumbersome or otherwise inadequate, it is, of course, free to ask Congress to grant it further remedial authority.”
The Supreme Court has never decided an FCPA case and given how the DOJ and SEC enforce the FCPA (largely through resolution vehicles which bypass judicial scrutiny and generally not charging individuals in connection with most corporate enforcement actions) likely will not in the foreseeable future.
However, it is interesting to think what would happen if the Supreme Court did indeed hear an FCPA case based on some of the most expansive enforcement theories.
Even though the current Supreme Court is often ideologically divided, the Court has shown remarkable consistency in recent years in rejecting (often times unanimously) overly expansive interpretations of a statute by an enforcement agency by relying on old-fashioned statutory analysis and resort to legislative history when needed.
For instance, and drawing on the language from the AMG Capital Management case, it doesn’t matter if banning facilitation payments is desirable or consistent with so-called best practices, what matters is that the FCPA as written expressly exempts facilitation payments consistent with Congressional intent to do so. Likewise, it doesn’t matter if it is desirable for the FCPA’s “foreign official” element to capture employees of so-called SOEs, what matters is that the FCPA as written does not expressly capture SOE’s consistent with Congressional intent. (See here and here).
Other specific examples could also be cited, but the general points re-emphasized by the Supreme Court in AMG Capital Management remains the same: (i) a law means what it says and what Congress intended for it to mean, not what an enforcement agency wishes a law said; and (ii) if an enforcement agency does not like what a law says from a policy perspective, the remedy is to persuade Congress to amend the law and not for the enforcement agency to expansively enforce the law per its wishes.
For additional analysis of the AMG Capital Management decision, see here from Debevoise & Plimpton.
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