Appeals Court Upholds $1.3 Billion Award Against Scott Tucker

The Ninth Circuit Court of Appeals upheld a $1.3 billion award against Scott Tucker’s loan companies, rejecting Tucker’s arguments that the loan agreements were not unfair or deceptive.

In the published opinion, U.S. Circuit Judge Diarmuid F. O’Scannlain wrote that Tucker’s loan agreement “was likely to deceive a consumer acting reasonably under the circumstances” and thus violated the Federal Trade Commission Act’s prohibition against “unfair or deceptive acts or practices in or affecting commerce.” Consequently, the panel was “satisfied that the district court did not err in entering summary judgment against Tucker as to the liability phase.”

In a concurring opinion, U.S. Circuit Judge Carlos T. Bea added that the court had an “unfortunate interpretation of the Federal Trade Commission Act” that misconstrues the act’s authorization of injunction to “empower district courts to compel defendants to pay monetary judgments.”

This interpretation, however, “wrests from Congress its authority to create rights and remedies.” Judge Bea argues that the appellate court therefore “should rehear this case en banc to relinquish what Congress withheld.”

The court ruling only upheld the $1.3 billion award against Tucker, which does not impact Tucker’s criminal conviction.