In 2008, a federal district court, in an action brought under section 13(b) of the FTC Act, issued a permanent injunction against three dietary supplement companies and affiliates, finding that they had engaged in misleading and materially false marketing with respect to certain weight loss supplements. In 2017, the district court granted the FTC’s motion to hold three of the defendants in contempt of that injunction, and ordered disgorgement of over $40 million. That contempt award was upheld on appeal in 2019.
Two years later, before the full $40 million had been paid out, the Supreme Court decided AMG Capital Management, LLC v. FTC, which limited the FTC’s authority to seek equitable monetary remedies directly in district court under section 13(b) of the FTC Act. The defendants then moved for relief from the contempt judgment, arguing that it was impermissible under AMG. The district court denied the motion, and this week, the Eleventh Circuit affirmed. AMG, it explained, reaffirmed the authority of district court’s to award prospective injunctive relief, as the court had done here, and where a court permissibly enters an injunction, it retains inherent contempt powers to remedy violations of that injunction.
