The saga of Scott Tucker took a turn in his favor on Thursday.

Convicted in 2017 of money laundering, racketeering, and violating the Truth In Lending Act in relation to his payday lending practices through AMG Capital Management, LLC, the former sports car champion was sentenced to 16 years and eight months in federal prison in 2018. The Federal Trade Commission also sought relief for Tucker’s victims by successfully suing for the repayment of nearly $1.3 billion through AMG.

Citing the use of Section 13(b) in the Federal Trade Commission Act, lawyers for Tucker filed an appeal that questioned the FTC’s authority to force a company like AMG to pay restitution through Section 13(b), arguing it was as an administrative shortcut that was improperly wielded to capture and return the $1.3 billion in question. The initial appeal was rejected by the Ninth Circuit court.

Tucker’s appeal reached the Supreme Court, where it was argued in January and received a ruling on Thursday that agreed with Tucker’s legal team and curbed the FTC’s ability to use Section 13(b) as a tool to order companies like AMG to repay its victims.

Associate Supreme Court Justice Stephen Breyer provided the court’s opinion on the matter, which absolves Tucker and AMG from the $1.3 billion debt repayment.

“Section 13(b) of the Federal Trade Commission Act authorizes the Commission to obtain, ‘in proper cases,’ a ‘permanent injunction’ in federal court against ‘any person, partnership, or corporation’ that it believes ‘is violating, or is about to violate, any provision of law’ that the Commission enforces,” he wrote.

“The question presented is whether this statutory language authorizes the Commission to seek, and a court to award, equitable monetary relief such as restitution or disgorgement. We conclude that it does not.”

Justice Breyer went into detail on how the Supreme Court took issue with the FTC’s approach to seizing Tucker’s $1.3 billion.

“Petitioner Scott Tucker controlled several companies that provided borrowers with short-term payday loans,” he continued. “The companies, operating online, would show a potential customer a loan’s essential terms. When the companies explained those terms, they misled many customers. The companies’ written explanations seemed to say that customers could normally repay a loan by making a single payment. And that payment would cost a person who, for example, borrowed $300 an extra $90.

“But in fine print the explanations said that the loan would be automatically renewed unless the customer took affirmative steps to opt out. Thus, unless the customer who borrowed $300 was aware of the fine print and actively prevented the loan’s automatic renewal, he or she could end up having to pay $975, not $390. Between 2008 and 2012, Tucker’s businesses made more than 5 million payday loans, amounting to more than $1.3 billion in deceptive charges.

“In 2012 the Federal Trade Commission filed suit and claimed that Tucker and his companies were engaging in ‘unfair or deceptive acts or practices in or affecting commerce.’ In asserting that Tucker’s practices were likely to mislead consumers, the Commission did not first use its own administrative proceedings. Rather, the Commission filed a complaint against Tucker directly in federal court. The Commission, relying upon 13(b), asked the court to issue a permanent injunction to prevent Tucker from committing future violations of the Act. Relying on the same provision, the Commission also asked the court to order monetary relief, in particular, restitution and disgorgement. The Commission moved for summary judgment.

“The District Court granted the Commission’s summary judgment motion. The court also granted the Commission’s request for an injunction and directed Tucker to pay $1.27 billion in restitution and disgorgement. The court ordered the Commission to use these funds first to provide ‘direct redress to consumers’ and then to provide ‘other equitable relief’ reasonably related to Tucker’s alleged business practices. Finally, the court ordered the Commission to deposit any remaining funds in the United States Treasury as disgorgement. On appeal, Tucker argued that 13(b) does not authorize the monetary relief the District Court had granted.

“Two [Ninth Circuit] judges, while recognizing that precedent in many Circuits supported that use of 13(b), expressed doubt as to the correctness of that precedent. Tucker then sought [a review by a higher ruling body] in this Court. In light of recent differences that have emerged among the Circuits as to the scope of 13(b), we granted his petition.”

The FTC made several arguments in an attempt to persuade the Supreme Court to leave its use of Section 13(b) intact, but its ruling favored Tucker:

“We must conclude, however, that 13(b) as currently written does not grant the Commission authority to obtain equitable monetary relief. For these reasons, we reverse the Ninth Circuit’s judgment, and we remand the case for further proceedings consistent with this opinion.”

Justice Breyer also clarified that the FTC is not powerless in this matter and welcomed it to seek other avenues outside of Section 13(b) to force companies like AMG to pay restitution.

In a reaction from acting FTC chair Rebecca Kelly Slaughter posted on Politico, the ruling was not met favorably.

“The Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,” she said. “We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”