Andris Pukke, et al. v. Federal Trade Commission, et al.

In the exercise of their power to impose civil contempt sanctions, the courts have balanced the competing concerns of necessity and potential arbitrariness by allowing summary adjudication of direct contempts committed in the presence of the court but requiring “elaborate and reliable factfinding” for out-of-court contempts involving disobedience of injunctions. Int’l Union, United Mine Workers of America v. Bagwell, 512 U.S. 821, 833-834 (1994). The first question presented is whether the district court denied petitioners due process by imposing one post-trial civil “compensatory” sanction of $120.2 million on all of them and a second of $172 million on one of them for violating a 14-year-old injunction in a different case, without receiving or giving them an opportunity to rebut any evidence and without factfinding.

The district court froze petitioners’ funds so they would be available for monetary relief to respondent under section 13(b) of the Federal Trade Commission Act (“FTCA”), 15 U.S.C. § 53(b), and denied petitioners access to those funds to hire trial counsel. As a result, two petitioners were compelled to defend themselves at trial pro se, the third petitioner defaulted, and the district court ultimately found petitioners liable for violating the FTCA. However, because this Court subsequently held in AMG Capital Management, LLC v. FTC, 141 S. Ct. 1341 (2021), that respondent had no authority under section 13(b) to seek or obtain monetary relief, the district court had no authority to freeze petitioners’ assets in the first place.