What happens when obstacles foreclose claims and threaten to leave parties without adequate relief? Or, when the cause of action escapes conventional classification? Or, when Supreme Court decisions frustrate private litigation causing pressure for public enforcement by agencies? Or, when individuals engage in novel forms of wrongdoing that the law may fail to reach? It becomes hard to resist the siren call of equity and its powerful remedies. This trend includes sweeping national injunctions, constructive trusts, and more. Disgorgement is also one such remedy, and its popularity is rising in terms of private and public applications and challenges. It is a gain-based profits remedy rooted in both restitution law and equity power. My earlier work focused on private law implications of this powerful form of relief, including its ability to fill gaps between common law causes of action. That research identified dangers including exceeding unjust enrichment’s purpose by punishing without punitive power and without proper procedural guards. Without restraint, the remedy threatens to destroy. With restraint, disgorgement holds promise for capturing unjust gains and deterring egregious wrongs.

In this work, I draw lessons from public law applications of disgorgement. Imprecise statutory language leaves space for agency discretion. Administrative agencies have increasingly sought this remedy to right alleged wrongs. It is a formidable administrative agency weapon. The allure of disgorgement, coupled with alternative administrative obstacles, has caused several agencies, including the Securities and Exchange Commission (“SEC”) and the Federal Trade Commission (“FTC”), to creep beyond their agency power. Potential agency creep occurs when the agency exceeds its statutory authority on the scope of conduct covered and the bounds of the remedy, in either the type or the severity of relief. Without sufficient checks on the agency, enforcement power expands. The Supreme Court has taken interest by granting certiorari in a series of cases implicating disgorgement relief and agency power.

This article explores these cases and underlying statutes. It examines the Supreme Court’s efforts to endorse but rein in certain agency powers and remedies. Meanwhile other agencies continue to pursue disgorgement aggressively under parallel statutory language that may draw future challenges. Supreme Court limits on various agencies’ disgorgement power are piecemeal. Substantively, some of the Court’s reasoning belies equity principles and fails to honor statutory purposes aimed at empowering agencies to vindicate rights. Such catalysts will likely lead to incomplete, and potentially flawed, legislative reforms. Ultimately, I argue that this interbranch process and dialogue serves valuable separation-of-powers purposes and, ideally, should help refine remedial goals and enforcement tools. Each branch must heed the interbranch signals to avoid overreach and impose its own scrutiny and limits, while also aiming to conform to substantive contours of restitution law. The catch is to ensure that such developments do not sever disgorgement’s foundational ties to unjust enrichment and to ensure it fits within modern and historic equity.


96 St. John's L. Rev. (2022)


agency, statutory interpretation, purposivism, restitution, unjust enrichment, disgorgement, unjust gain, wrongful profits, remedies, wrongdoing, FTC, Federal Trade Commission, SEC, Securities Exchange Commission, FDA, Food and Drug Administration, CFTC, Commodities Futures Trading Commission

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