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Federal Trade Commission v. Consumer Defense, LLC

United States Court of Appeals, Ninth Circuit

June 17, 2019

Federal Trade Commission, Plaintiff-Appellee,
v.
Consumer Defense, LLC, a Nevada limited liability company; Consumer Link, Inc., a Nevada corporation; Benjamin R. Horton, in his individual and corporate capacity; Defendants, and Preferred Law, PLLC, a Utah professional limited liability company; American Home Loan Counselors, a Utah limited liability company; Consumer Defense Group, LLC, FKA Modification Review Board, LLC, a Utah limited liability company; Consumer Defense, LLC, a Utah limited liability company; Brown Legal, Inc., a Utah corporation; AM Property Management, LLC, a Utah limited liability company; FMG Partners, LLC, a Utah limited liability company; Zinly, LLC, a Utah limited liability company; Jonathan P. Hanley, in his individual and corporate capacity; Sandra X. Hanley, in her individual and corporate capacity; American Home Loans, LLC, a Utah limited liability company, Defendants-Appellants, Thomas W. McNamara, Receiver-Appellee.

          Argued and Submitted September 14, 2018 San Francisco, California

          Appeal from the United States District Court for the District of Nevada D.C. No. 2:18-cv-00030-JCM-PAL James C. Mahan, District Judge, Presiding.

          Karra J. Porter (argued) and Sarah E. Spencer, Christensen & Jensen, P.C., Salt Lake City, Utah, for Defendants-Appellants.

          Imad D. Abyad (argued), Attorney; Joel Marcus, Deputy General Counsel; Alden F. Abbott, General Counsel; Gregory A. Ashe and Adam M. Wesolowski, Attorneys; J. Reilly Dolan, Acting Director; Bureau of Consumer Protection; Federal Trade Commission, Washington D.C.; for Plaintiff-Appellee.

          No appearance for Receiver-Appellee.

          Before: Johnnie B. Rawlinson, Paul J. Watford, and Michelle T. Friedland, Circuit Judges.

         SUMMARY[*]

         Federal Trade Commission

         The panel affirmed the district court's order entering a preliminary injunction freezing all of the defendants' assets in connection with Consumer Defense Global's loan modification business operations in an action initiated by the Federal Trade Commission (FTC) alleging violations of the FTC Act and Regulation O, 12 C.F.R. Part 1015 - Mortgage Assistance Relief Services.

         The parties agreed that the FTC brought the action pursuant to the second proviso of Section 13(b) of the FTC Act, which allows the FTC to seek injunctive relief without initiating administrative action, but disputed whether the FTC was required to demonstrate a likelihood of irreparable harm to obtain relief.

         The panel held that although in the ordinary case a showing of irreparable harm was required to obtain injunctive relief, no such showing was required when injunctive relief was sought in conjunction with a statutory enforcement action where the applicable statute authorized injunctive relief. The panel further held that circuit precedent to that effect did not present an irreconcilable conflict with the holding in Winter v. Natural Resource Defense Council, Inc., 555 U.S. 7, 20 (2008), and remained valid. The panel concluded that the district court committed no error in granting the motion for a preliminary injunction without requiring the FTC to make the traditional showing of irreparable injury.

         The panel addressed challenges to the district court's jurisdiction and the scope of the injunction in a concurrently filed memorandum disposition.

          OPINION

          RAWLINSON, Circuit Judge.

         This appeal stems from an action initiated by the Federal Trade Commission (FTC) alleging violations of the Federal Trade Commission Act, 15 U.S.C. § 45, and Regulation O, 12 C.F.R. Part 1015 - Mortgage Assistance Relief Services (the MARS Rule). Defendants-Appellants Preferred Law, PLLC; American Home Loan Counselors; Consumer Defense Group, LLC; Consumer Defense, LLC; Brown Legal, Inc.; AM Property Management, LLC; FMG Partners, LLC; Zinly, LLC; Jonathan P. Hanley; Sandra X. Hanley; and American Home Loans, LLC (collectively, Consumer Defense Global) appeal the district court's order entering an injunction freezing all of the defendants' assets in connection with Consumer Defense Global's loan modification business operations.[1]

         Consumer Defense Global contends that the district court erred as a matter of law because the court presumed irreparable harm, rather than requiring that the FTC demonstrate a likelihood of irreparable harm. We have ...


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