Supreme Court to hear appeal from tow truck Scott Tucker
The United States Supreme Court Thursday agreed to hear a call by Kansas City payday loan mogul Scott Tucker, who challenges the Federal Trade Commission’s power to demand restitution, as the agency did in his case when it obtained a $ 1.3 billion against him.
Lower courts have issued mixed opinions on whether the FTC, a federal oversight agency, can order people and businesses to return the money they got from consumers through scam plans.
The Supreme Court consolidated Tucker’s appeal with another case that poses similar questions, which the justices will hear in oral argument later this year.
“We are eager to prove to the Supreme Court that the FTC law allows us to fully protect consumers by ensuring that money illegally taken from them is legitimately returned to them,” said the FTC General Counsel, Alden Abbott, in a written statement.
Tucker and several business entities related to his payday loan operation were sued by the FTC in 2012 following an investigation 10 years earlier. The FTC accused the entire company of making small dollar loans to consumers on deceptive terms and then using unfair practices to collect those debts.
In 2016, a Nevada federal judge sided with the FTC and ordered Tucker and his businesses to collectively pay $ 1.3 billion to repay borrowers duped by the payday loan program. The penalty was a record for the FTC.
Tucker’s appeal argues that while the Federal Trade Commission Act, the law that created the agency, allows it to seek injunctions and restraining orders from judges to force companies to stop deceiving consumers, it shouldn’t not have the possibility of obtaining compensation.
Tucker appealed the Nevada judge’s ruling to the 9th Circuit Court of Appeals, which in 2018 upheld the judge’s ruling. Several other calling circuits supported the 9th Circuit’s view.
The 7th Circuit Court of Appeals, however, took the opposite position in a separate case, saying the FTC is not allowed to seek restitution.
“The question of whether the Commission can obtain such relief against the defendants should not vary depending on their geographic location,” Tucker’s appeal said.
Tucker’s position has the support of business advocates and small governments like the American Chamber of Commerce and the Washington Legal Foundation, who have filed friend of court briefs arguing against the FTC.
That same year, the FTC got its sanction against Tucker, New York federal prosecutors charged him with criminal racketeering, claiming his payday lending activity amounted to a $ 2 billion scheme that exploited 4, 5 million borrowers. Jury convicted Tucker and judge sentenced him to sixteen years and eight months in prison.
Tucker also appealed his criminal conviction, but the The 2nd Circuit Court of Appeals rejected his argument last month.