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FEDERAL TRADE COMMISSION, Appellee, v. SECURITY RARE COIN & BULLIO... Page 3 of 6 The FTC brought an action against Security Coin, alleging that its promotion and sale of coins as low-risk investments during 1985 and 1986 violated section 5(a) of the Federal Trade Commission Act, 15 U.S.C. Sec. 45 (a). The suit sought a permanent injunction and other equitable relief under section 13(b) of the Act, 15 U.S.C. Sec. 53(b). The district court concluded that Security Coin had violated section 5(a) of the Act by misrepresenting that its coin prices reflected their market value, misrepresenting the true nature of its buy-back policy, and misrepresenting the investment value of modern-date dimes, quarters, and half dollars and certain foreign gold coins. The district court entered a permanent injunction against these business practices and awarded equitable monetary relief. II. 5 Security Coin argues several issues on appeal. First Security Coin contends that the district court does not have the power to grant rescission under section 13(b) of the Act. Security Coin next argues that consumer reliance on its buy-back policy was not pleaded by the FTC and should not have been a basis for the district court's decision. Moreover, Security Coin argues that each customer's actual reliance must be proved before the customers can recover any loss caused by Security Coin's deceptive trade practices. 6 Section 5(a)(1) of the Act, 15 U.S.C. Sec. 45(a)(1), prohibits"unfair or deceptive acts or practices in commerce." To remedy violations of section 5(a), section 13(b) of the Act provides "[t]hat in proper cases the Commission may seek, and after proper proof, the court may issue, a permanent injunction." Security Coin points to the language of section 13(b) to support its contention that the district court did not have the power to grant equitable remedies beyond injunctive relief. Security Coin refers to section 5(I ) of the Act, 15 U.S.C. Sec. 45(I ), which provides for "other and further equitable relief," to show that when Congress wishes to authorize forms of equitable relief other than an injunction, it knows how to do so. 7 The language of section 13(b) empowers the district court to grant a permanent injunction in a proper case. Nothing in the wording of the statute expressly precludes ancillary equitable relief. Where Congress allows resort to equity for the enforcement of a statute, all the inherent equitable powers of the district court are available for the proper and complete exercise of the court's equitable jurisdiction, unless the statute explicitly, or"by a necessary and inescapable inference," limits the scope of that jurisdiction. Porter v. Warner Holding Co., 328 U.S. 395, 397-98, 66 S.Ct. 1086, 1088-89, 90 L.Ed. 1332 (1946). See also Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 291-92, 80 S.Ct. 332, 334-36, 4 L.Ed.2d 323 (1960). Applying this principle, several courts of appeals have held that section 13(b) authorizes district courts to grant ancillary equitable relief in proper cases. F.T.C. v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1026 (7th Cir.1988) (the authority to grant permanent injunctive relief also includes the authority to grant all other equitabie reliefl; F.T.C. v. United States Oil & Gas Corp., 748 F.2d 1431, 1432, 1434 (11th Cir.1984) (Congress did not limit district court's inherent equitable powers); F.T.C. v. H.N. Singer, Inc., 668 F.2d 1107, 1113 (9th Cir.1982) (Congress gave the district court authority to grant any ancillary relief necessary to accomplish complete justice). Section 13(b) does not limit the full exercise of the district court's inherent equitable power. Finding those decisions persuasive, we adopt their http://www.altlaw.org/v1/cases/477126 12/5/2008