Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-24-01273/USCOURTS-ca7-24-01273-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

In the

United States Court of Appeals

For the Seventh Circuit ____________________ 

Nos. 23-3310, 24-1273 & 24-1289 

FEDERAL TRADE COMMISSION, 

Plaintiff-Appellee, 

v.

DAY PACER LLC, et al., 

Defendants-Appellants,

and

MARGARET E. CUMMING, in her capacity as personal representative of the Estate of David T. Cumming, 

Defendant-Appellant. 

____________________ 

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:19-cv-01984 — Lindsay C. Jenkins, Judge. 

____________________ 

ARGUED OCTOBER 22, 2024 — DECIDED JANUARY 3, 2025 

____________________ 

Before BRENNAN, JACKSON-AKIWUMI, and KOLAR, Circuit 

Judges. 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
2 Nos. 23-3310, 24-1273 & 24-1289 

BRENNAN, Circuit Judge. The National Do Not Call Registry 

saves millions of consumers from unwanted communications. 

When telemarketers contact those on the registry, steep penalties can attach. The defendant companies here—Day Pacer 

LLC and EduTrek L.L.C.—as well as the individuals who ran 

them were responsible for millions of telemarketing calls to 

consumers on the registry. As a result, the Federal Trade 

Commission brought a civil enforcement action against them. 

The district court found the defendants liable on summary

judgment and awarded the Commission over $28 million in 

civil penalties. The defendants appeal the court’s liability 

findings and damages award. 

We agree the defendants are liable and affirm the court on 

that front. For the companies, there is no genuine dispute of 

material fact that their practices are prohibited by the regulations, nor that they should have known their actions were deceptive. As for the individuals, all either knew or should have 

known of the companies’ illegal acts, and all had authority to 

prevent them. 

But we reverse and remand the decision to substitute an 

individual defendant’s estate upon his death and the damages award. The Commission’s suit here was a penal action, 

which never survives a party’s death. Additionally, the district court did not consider all mandatory statutory factors, so 

its award was an abuse of discretion. 

I 

We first review the regulatory backdrop to this case. In 

passing the Federal Trade Commission Act, Congress prohibited “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 3

commerce.” 15 U.S.C. § 45(a)(1). The Telemarketing and Consumer Fraud and Abuse Prevention Act was added in 1994, 

providing “consumers necessary protection from telemarketing deception and abuse.” Id. § 6101(5). 

The Commission has statutory authority to create rules defining unfair and deceptive acts. Id. § 57a(a)(1). It promulgated the Telemarketing Sales Rule (TSR) to implement the 

Telemarketing and Consumer Fraud and Abuse Prevention 

Act. See 16 C.F.R. pt. 310. The TSR defines telemarketing as a 

“plan, program, or campaign which is conducted to induce 

the purchase of goods or services ... by use of one or more 

telephones.” Id. § 310.2(hh). 

Relevant here, the TSR prohibits telemarketing communications when the consumer’s number is on the National Do 

Not Call Registry, subject to only two exceptions. Id.

§ 310.4(b)(1)(iii)(B). The telemarketer must either have (1) 

prior express written agreement demonstrating the telemarketer is allowed to call, or (2) an established business relationship with the consumer. Id. A party is also prohibited from 

providing “substantial assistance or support to any seller or 

telemarketer when that person knows or consciously avoids 

knowing that the seller or telemarketer” is violating the TSR. 

Id. § 310.3(b). 

The Commission can recover civil penalties from TSR violators who had “actual knowledge or knowledge fairly implied on the basis of objective circumstances that such act is 

unfair or deceptive and is prohibited by such rule.” 15 U.S.C. 

§ 45(m)(1)(A). The maximum civil penalty is adjusted for inflation periodically, ranging from $16,000 to $42,530 per violation during the period at issue here. See 16 C.F.R. § 1.98(d).

When fashioning a penalty, the district court may not 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
4 Nos. 23-3310, 24-1273 & 24-1289 

reflexively award the statutory maximum. It must consider 

“the degree of culpability, any history of prior such conduct, 

ability to pay, effect on ability to continue to do business, and 

such other matters as justice may require.” 15 U.S.C. 

§ 45(m)(1)(C).

Day Pacer LLC, and its predecessor EduTrek L.L.C., were 

companies that generated sales leads. Both purchased 

consumers’ contact information from websites, usually jobsearch platforms, where the consumers had entered their information. The companies would then personally call those 

consumers or contract with other organizations—termed 

“IBT Partners”—to call them, gauging the consumers’ interest 

in educational opportunities. If consumers expressed interest, 

the companies would sell their contact information to forprofit educational institutions. 

Between 2014 and 2019, the companies placed approximately 3.7 million calls to consumers on the registry. Additionally, the IBT Partners purportedly transferred another 

nearly half-million calls to the defendants from consumers on 

the registry, totaling approximately 4.2 million calls. 

During that same period, the companies received multiple 

complaints, including threatened lawsuits, from do-not-call 

consumers. Organizations from which the companies purchased information, and schools to which they sold the data, 

also lodged complaints, claiming that Day Pacer and EduTrek 

engaged in illegal or unethical practices. Finally, in April 

2016, the Commission notified the companies that it was investigating their activities for possible violations of the FTC 

Act. 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 5

Raymond Fitzgerald and David Cumming, who served as 

managing members, were equity owners of both companies. 

As managing members, they had control over the businesses’ 

activities, and were empowered to “do and perform all other 

acts as may be necessary or appropriate to the conduct of the 

[entities’] business.” 

Ian Fitzgerald was involved with Day Pacer and EduTrek 

in various capacities throughout the years.1 He was the director of human resources at EduTrek and then became the president of Day Pacer in June 2016. This latter role gave him 

control over the entity’s business and personnel decisions. He 

continued to serve as Day Pacer’s president until that company dissolved in 2019. 

In March 2019, the Commission sued the companies, Day 

Pacer and EduTrek, and the above-named individuals, alleging two counts. Count I asserted the defendants personally 

called, or caused others to call, consumers on the registry, violating the TSR. See 16 C.F.R. § 310.4(b)(1)(iii). Count II alleged 

the defendants provided “substantial assistance” to the IBT 

Partners, who themselves violated the TSR. See id. § 310.3(b). 

The Commission sought monetary and injunctive relief. 

All parties moved for summary judgment. The district 

court issued a written opinion and order in which it first addressed a procedural issue that arose during motion practice.

Cumming had passed away in early 2022, so the Commission

sought to substitute his estate as a party. Our circuit permits 

substitution if the action is primarily remedial, rather than penal. See Smith v. No. 2 Galesburg Crown Fin. Corp., 615 F.2d 407, 

1 Because Raymond and Ian share a last name, we refer to them by 

their first names.

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
6 Nos. 23-3310, 24-1273 & 24-1289 

413–15 (7th Cir. 1980), overruled on other grounds by Pridegon v. 

Gates Credit Union, 683 F.2d 182, 194 (7th Cir. 1982). The district court found that the penalties sought under the TSR were 

remedial, so it substituted the Estate for Cumming. 

The court next found Day Pacer and EduTrek (“LLC Defendants”) liable for calls made to consumers on the registry. 

It rejected three main arguments against liability. The LLC 

Defendants first argued they never actually sold anything to 

consumers, instead acting as mere intermediaries. Thus, they 

claimed they were not “telemarketers” under the TSR. But the 

court found that the TSR defines telemarketing more broadly 

as any “plan, program, or campaign” “conducted to induce 

the purchase of goods or services,” which described the companies’ activities. See 16 C.F.R. § 310.2(hh). 

Second, the LLC Defendants asserted they did not have 

“knowledge fairly implied on the basis of objective 

circumstances” that the TSR prohibited their activities. See 15 

U.S.C. § 45(m)(1)(A). But the court found that even if the 

companies did not subjectively know the TSR applied, there 

was no reasonable basis for them not to know its 

applicability—especially considering they knew an 

analogous statute governed. Third, the LLC Defendants

contended they had received prior express consent from 

consumers to be called. The court responded that consent 

given to vendors from whom the companies purchased the 

information was not sufficient; consumers must consent to 

each separate caller. Additionally, consumer consent after the 

call was placed was too late, as callers must have written 

consent before placing the call. 

The court also found the companies liable under Count II, 

for “substantially assisting” one of its IBT Partners in 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 7

violating the TSR. Although there were multiple IBT Partners, 

the Commission sought summary judgment as to only one, as 

it needed to prove just a single instance to prevail on Count 

II. 

The last liability issue concerned Raymond, Ian, and Cumming (“Individual Defendants”). To hold them liable for the 

companies’ actions, the Commission was required to demonstrate these individuals had control or authority to control the 

practices, and that they knew or should have known about 

the violations. Given the authoritative positions each individual had and their knowledge of the multiple complaints the 

companies received, the district court found these elements 

were satisfied. 

The court next addressed relief. It said it was “inclined” to 

grant injunctive relief against the LLC Defendants, as well as 

Raymond and Ian (“Day Pacer Defendants”), but required 

supplemental briefing on each party’s current state of affairs. 

It also expressed an “inclination” to award a $28.6 million 

penalty—representing the companies’ gross revenue from the 

period of malfeasance—against all defendants. But it reserved 

the final award for after the parties provided updated 

information. And because Cumming was deceased, the court 

concluded he had no ongoing role in the affairs of the LLC 

Defendants and intended to deny injunctive relief as to the 

Estate.

A few months later, the court issued a permanent injunction prohibiting the Day Pacer Defendants from engaging in 

any telemarketing, whether or not prohibited by the TSR. It 

then stayed the injunction pending appeal only to the extent 

that it prohibited them from calling other businesses. Finally, 

the court issued a four-page order imposing the full $28.6 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
8 Nos. 23-3310, 24-1273 & 24-1289 

million penalty, with joint and several liability, on all defendants. The order was silent as to a few of the required statutory 

factors, most notably the parties’ ability to pay. See 15 U.S.C. 

§ 45(m)(1)(C).

II

The defendants bring two challenges to the district court’s 

liability finding. First, the LLC Defendants argue that the 

court improperly granted summary judgment against the 

companies. Second, they posit that even if the LLC Defendants were liable for the telemarketing calls, the court still erred 

in holding all three Individual Defendants liable for the companies’ actions. 

Both liability challenges are reviewed de novo, 

“construing the evidence in the light most favorable to the 

non-moving partes.” Navratil v. City of Racine, 101 F.4th 511, 

518 (7th Cir. 2024). Summary judgment is appropriate when 

“there is no genuine dispute as to any material fact and the 

movant is entitled to judgment as a matter of law.” FED. R.

CIV. P. 56(a). 

A 

The LLC Defendants raise three main arguments as to 

why the companies were not liable for the calls. They first assert the TSR did not prohibit their activities, as the calls were 

“purely informational.” Second, they believe there was still a 

genuine issue of material fact whether the companies knew or 

should have known that the TSR outlawed their calls. Third, 

they claim that the companies telemarketed only to individuals who had consented to the calls. We address each argument 

in turn.

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 9

The companies were not telemarketing at all, they assert, 

as their calls were “purely informational.” They did not offer 

to sell any goods or services to the do-not-call consumers directly. But, as the Commission points out, the regulation’s 

definition of “telemarketing” is not so limited. Rather, a party

violates the regulation any time it is involved in “a plan, program, or campaign which is conducted to induce the purchase 

of goods or services.” 16 C.F.R. § 310.2(hh). Even though the 

companies never sold educational services on the contested 

calls, their business models were structured around a “plan” 

to obtain caller information to sell to for-profit universities, 

who would then attempt to sell educational services. 

Consider the possible consequence of the LLC Defendants’ reading of the regulations: Nothing would stop a company from establishing a sister organization to generate its 

leads from do-not-call individuals. That lead-generation organization would be able to obtain the necessary express consent for the principal organization to then place telemarketing 

calls. But the regulations do not permit such a loophole. Instead, they define “telemarketing” more broadly than just the 

act of selling goods or services. 

The companies argue next that they did not know, and 

had no reason to know, that the TSR prohibited their calls. 

The Commission counters that actual knowledge is not 

needed, as the statute only requires knowledge under an objective standard. 

Subjective knowledge that actions violate the TSR is not 

necessary for liability to attach. Rather, it is enough to have 

“actual knowledge or knowledge fairly implied on the basis 

of objective circumstances that such act is unfair or deceptive 

and is prohibited by such rule.” 15 U.S.C. § 45(m)(1)(A). The 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
10 Nos. 23-3310, 24-1273 & 24-1289 

LLC Defendants point to three pieces of evidence they say 

show the companies did not have the requisite knowledge. 

None of the three are persuasive. 

Ian and Raymond asserted in declarations they believed 

that selling services directly over the phone would violate the 

TSR, but serving as an intermediary for educational institutions would not. Their beliefs may show the companies did 

not have actual knowledge of wrongdoing. But it is not objectively reasonable merely to believe that a law does not 

prohibit their activities. Ignorance of the law’s reach is not a 

defense. 

Cumming posited in an affidavit that he “did some research” on the TSR’s applicability to the companies’ activities, 

ultimately concluding that the law did not prohibit the calls 

made. But that research was not proffered during the summary judgment proceedings. Although a party’s affidavit can 

serve as a vehicle for introducing facts at summary judgment, 

the party “cannot rest ‘upon conclusory statements in affidavits; [he] must go beyond the pleadings and support [his] contentions with proper documentary evidence.’” Foster v. PNC 

Bank, Nat’l Ass’n, 52 F.4th 315, 320 (7th Cir. 2022) (quoting 

Weaver v. Champion Petfoods USA Inc., 3 F.4th 927, 934 (7th Cir. 

2021)). Because Cumming did not cite any documentary evidence for summary judgment, the assertion in his affidavit 

was not entitled to any weight. 

One evidentiary matter remains bearing on the companies’ objective knowledge. That concerns Ian and Raymond’s 

affidavit statements that the Utah Division of Consumer Protection investigated Day Pacer for violating a Utah law similar 

to the TSR. They submit that the state ultimately did not find 

Day Pacer in violation of that law. If the state had cleared Day 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 11

Pacer of wrongdoing under a law materially similar to the 

TSR, that may have made it objectively reasonable to conclude there was no violation of federal law. But this dispute 

fails for the same reason as Cumming’s research: no evidence 

related to the Utah investigation was introduced at summary 

judgment. The district court was not bound to accept bare 

statements in affidavits unsupported by “proper documentary evidence.” Weaver, 3 F.4th at 934. 

In contrast, the Commission produced admissible evidence demonstrating that it was not objectively reasonable for 

the LLC Defendants to believe that the TSR did not prohibit 

their calls. One of EduTrek’s 2014 contracts expressly prohibited its contractors from violating the TSR, showing that defendants were aware of the law and its potential applicability. 

The Individual Defendants also admitted they knew that the 

Telephone Consumer Protection Act (TCPA) and its accompanying regulations governed their activities. See 47 U.S.C. 

§ 227. The defendants offered no explanation for how it was 

reasonable to conclude the TCPA applied to their businesses, 

yet the essentially equivalent TSR did not.2

In sum, although the defendants may have survived summary judgment on whether they had actual knowledge of 

TSR violations, they were not entitled to proceed to trial given

the statute’s objective standard here.

2 The TCPA prohibits “the initiation of a telephone call or message for 

the purpose of encouraging the purchase or rental of, or investment in, 

property, goods, or services, which is transmitted to any person.” 47 

U.S.C. § 227(a)(4). It is hard to see how there is not significant overlap with 

the TSR’s prohibition against any “plan, program, or campaign which is 

conducted to induce the purchase of goods or services or a charitable contribution.” 16 C.F.R. § 310.2(hh).

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
12 Nos. 23-3310, 24-1273 & 24-1289 

The last argument against the LLC Defendants’ liability is 

that the companies limited any telemarketing to consumers 

who solicited or consented to the calls. The Commission responds that the companies did not obtain the form of consent 

required by the regulation. 

The TSR requires “express agreement, in writing” from 

any consenting consumer. 16 C.F.R. § 310.4(b)(1)(iii)(B)(1). But 

that agreement does not provide carte blanche for all telemarketers to then call that consumer. Rather, the agreement only 

authorizes “calls made by or on behalf of a specific party” 

named in the agreement. Id. The defendants argue this exception was met in two ways. 

First, they submit that the consumers provided consent to 

the websites from which the defendants purchased the consumers’ information, and that this consent was broad enough 

to apply to the defendants. In support, they contend the companies provided millions of URLs purporting to document 

consent. The Commission responds that when it tested the 

URLs, they either led to a blank webpage, or did not demonstrate consent as to the companies.3 It then alerted the defendants in its proposed statement of material facts of the 

problems with the URLs. The defendants disputed that the 

URLs were broken and faulted the Commission for not using 

a certain method to retrieve the webpages. But even after being put on notice of the problems with the links, the 

3 The Commission says it tested 750 of the 11,308,260 links provided, 

and all 750 were defective. It then provided a declaration in which its expert explained that 750 is a proper sample size from which to extrapolate 

these results to the rest of the population. Defendants argue that extrapolation was impermissible—why, they do not say—but put on no evidence 

to support that claim. 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 13

defendants provided no evidence—via screenshots, PDFs, or 

the like—proving consumer consent. They thus did not meet 

their burden of demonstrating express written agreement. 

For the second consent argument, the defendants assert

that consumers acquiesced after initially speaking to the 

companies. But consent can be proved only by “express 

agreement, in writing.” 16 C.F.R. § 310.4(b)(1)(iii)(B)(1). 

Therefore, under the plain text of the regulation, oral consent 

does not qualify. The district court correctly concluded that 

the defendants did not have consumer consent to place the 

calls.

Related to consent, the LLC Defendants argue that the 

Commission did not adequately show the companies had 

knowledge that they lacked consumer consent. But that puts 

a burden on the FTC where one does not exist. The TSR requires the telemarketer, not the Commission, to “demonstrate 

that the seller has obtained” express consent. 16 C.F.R. 

§ 310.4(b)(1)(iii)(B)(1). And express consent in the telemarketing context is “an affirmative defense for which the defendant 

bears the burden of proof.” Wakefield v. ViSalus, Inc., 51 F.4th 

1109, 1118–19 (9th Cir. 2022) (interpreting the similar consent 

provision of the TCPA). Thus, that the Commission could 

only “point to a handful of complaints” is irrelevant. The LLC 

Defendants had the burden to establish express consent, and 

as shown above, they did not carry it here.

Although no party raised this issue on appeal, an additional topic related to the companies’ liability arose at oral 

argument. The district court found the entities liable for the 

millions of “outbound telephone calls” they placed to consumers. The TSR defines an “outbound telephone call” as one 

“initiated by a telemarketer to induce the purchase of goods 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
14 Nos. 23-3310, 24-1273 & 24-1289 

or services or to solicit a charitable contribution.” 16 C.F.R. 

§ 310.2(x). Because this provision lacks the broad “plan, program, or campaign” language present in the general telemarketing provision, one could argue that an outbound telephone 

call is illegal only if that call itself induces the purchase of a 

good or service.

But this reading does not carry the day for the LLC Defendants in this case. As discussed previously, telemarketing 

is defined broadly as “a plan, program, or campaign which is 

conducted to induce the purchase of goods or services.” Id.

§ 310.2(hh). And a telemarketer is one “who, in connection 

with telemarketing, initiates or receives telephone calls to or 

from a customer.” Id. § 310.2(gg). One thus qualifies as a telemarketer any time he calls a customer within the broad definition of telemarketing. Throughout the TSR, the phrases 

“outbound telephone call” and “telemarketer” are used in the 

same sentence, and by referencing telemarketing—a term defined in the regulation—those references incorporate that definition.

In addition, the regulations differentiate a seller—who 

“provides, offers to provide, or arranges for others to provide 

goods or services to the customer in exchange for consideration”—from a telemarketer. Id. § 310.2(ee). The latter is defined more broadly as one who engages in a “plan, program, 

or campaign” to induce the purchase of services. Id.

§ 310.2(gg). If the TSR had wanted to limit liability for outbound calls only to calls that actually offer to sell services, it 

could have defined outbound calls as those placed by sellers, 

not by the more broadly defined telemarketers. When considering that the regulation prohibits outbound calls placed by 

telemarketers, not just sellers, we are satisfied that it does not 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 15

permit calls by lead generators such as Day Pacer and 

EduTrek. 

B 

The defendants argue that even if the companies were liable for TSR violations, the individuals were not. To impose 

individual liability for an entity’s TSR violations, the Commission “must prove (1) that the practice violated the [FTC

Act]; (2) that the individual ‘either participated directly in the 

deceptive acts or practices or had authority to control them’; 

and (3) that the individual ‘knew or should have known about 

the deceptive practices.’” F.T.C. v. Credit Bureau Ctr., LLC, 937 

F.3d 764, 769 (7th Cir. 2019) (quoting F.T.C. v. World Media Brokers, 415 F.3d 758, 764 (7th Cir. 2005)). The first element is not 

addressed here, as that was satisfied in holding the companies 

liable.

For the second element, Raymond and Cumming’s Estate

dispute the degree of actual control the individuals exercised 

over the companies’ decisions. Although our circuit has not 

dealt in depth with the “authority to control” element, the 

Second Circuit’s recent analysis is instructive. In F.T.C. v. Moses, the court held an individual liable for entities’ deceptive 

practices when he “held a 50 percent ownership stake” in 

them, and “served as their co-director and general manager.” 

913 F.3d 297, 307 (2d Cir. 2019). Important to this liability finding was that the individual “admitted to having the power to 

hire and reprimand employees including those responsible 

for the Corporate Defendants’ violations.” Id. So, although 

there may have been a dispute about “whether he 

exercised authority to control the Corporate Defendants’ conduct,” there was no legitimate basis to deny that “he possessed authority to control it.” Id. at 308. 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
16 Nos. 23-3310, 24-1273 & 24-1289 

So too here. Raymond and Cumming were the largest equity owners of both EduTrek and Day Pacer. For EduTrek, 

Raymond held a 72% interest and Cumming 21%. For Day 

Pacer, Raymond held a 66% interest and Cumming 19.5%. 

Even though Cumming’s ownership interest fell short of that 

of a “controlling shareholder,” it is undisputed that he and 

Raymond were managers of both companies. Managers were 

entitled to “do and perform all ... acts as may be necessary or 

appropriate to the conduct of the [companies’] business.” 

These broad powers necessarily include “the power to hire 

and reprimand employees including those responsible for the 

Corporate Defendants’ violations.” Moses, 913 F.3d at 307. Accordingly, even if there was a genuine dispute over whether 

Raymond and Cumming exercised authority over the companies’ deceptive practices, the record undercuts a claim that 

they did not possess authority over them.

The defendants also dispute that Raymond and Cumming 

should have known about the entities’ deceptive practices.

But both were aware that the companies had been sued multiple times for calling consumers on the registry. It strains credulity that “only a handful of complaints” were insufficient 

to put them on notice of possible TSR violations. That position 

is further belied by Raymond’s representation of the entities 

in the lawsuits. There is also no dispute that both individuals 

were aware of non-lawsuit complaints filed against the companies due to calling numbers on the registry. The record thus 

shows that Raymond and Cumming knew, or at least should 

have known, of the companies’ deceptive actions. So, the district court correctly held them individually liable. 

As an aside, the Estate also argues that the district court 

should have allowed it to remedy Cumming’s litigation errors 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 17

before ruling in the Commission’s favor at summary judgment. Precedent forecloses this argument. When a party is 

substituted for a deceased person under Federal Rule of Civil

Procedure 25(a), the new party “tracks the positions of the 

original litigant[].” Brook, Weiner, Sered, Kreger & Weinberg v. 

Coreq, Inc., 53 F.3d 851, 852 (7th Cir. 1995). Specifically, if the 

deceased party “failed to comply with its discovery obligations, leading the judge to deem a critical fact established,” 

the successor has no right to change that decision. Id. The Estate was not entitled to a second bite at the apple. 

Now to Ian Fitzgerald. He argues that 61% of the violations occurred from March 22, 2014, to July 31, 2016, but he 

had no authority to control the Corporate Defendants’ operations before June 2016. The Commission responds that, beginning in 2010, Ian was the president of Raymond’s holding 

company that owned EduTrek and Day Pacer. It also points 

out that Ian was subjectively aware of complaints the companies received. 

There is little argument against Ian’s liability for Day 

Pacer’s calls after he became president of the company in June 

2016. As a corporate officer, he had authority to control Day 

Pacer’s decisions. See World Media Brokers, 415 F.3d at 764 (authority to control can be shown by “assuming duties as a corporate officer”). He also disputes that he should have known 

about Day Pacer’s deceptive practices. But it is undisputed 

that the company received complaints, including lawsuits, 

from consumers on the registry after Ian became president. 

And the company was notified multiple times by vendors of 

practices that the vendors flagged as illegal. Thus, even if Ian 

did not subjectively know about all these complaints, a president of a telemarketing business should know of these 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
18 Nos. 23-3310, 24-1273 & 24-1289 

lawsuits and violations, which is all that is needed to meet the 

objective knowledge requirement.

As to the companies’ activities before Ian became president, however, the Commission did not demonstrate that he 

had authority to control the entities’ actions. Again, there is 

no genuine dispute that Ian did not “kn[o]w ... about the deceptive practices.” Credit Bureau Ctr., 937 F.3d at 769. In response to a 2015 lawsuit filed by a do-not-call consumer 

against EduTrek, Ian told other employees in an email that 

“[w]e need to make sure our system is not calling DNC numbers ever.” 

Yet even with this email, there is no evidence that Ian had 

authority to direct the companies’ actions before he became 

president in June 2016. Before then, the Commission agrees, 

he served as director of human resources for the two entities. 

No evidence was put forth showing how a human resources 

role would provide Ian control over the companies’ decisions 

on legal compliance. The Commission submits that Ian 

should be liable as president of Raymond’s holding company, 

which itself owned an interest in the entities. But serving as 

the holding company’s president is one step removed from 

being a shareholder in its subsidiaries. So, there is no “substantial inference” that Ian could control the deceptive acts. 

F.T.C. v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1205 (10th Cir. 

2005). There is no evidence that Ian took over Raymond’s voting powers, nor that he had any direct say in the entities’ operations. The Commission therefore failed to carry its burden 

of demonstrating that Ian “participated directly in the deceptive acts or practices or had authority to control them.” Credit 

Bureau Ctr., 937 F.3d at 769 (quoting World Media Brokers, 415 

F.3d at 764). 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 19

Last, the Commission contends that Ian’s pre-2016 liability 

stems from his equity ownership in Day Pacer, which was established in September 2015. Ian owned a 9.5% interest in the 

entity through his limited liability company. This ownership 

interest is not “controlling,” so in isolation falls short of creating a “substantial inference” that the owner has authority to 

control the entity’s decisionmaking. See Freecom, 401 F.3d at 

1205. And unlike Raymond and Cumming, he was not designated as a manager of the entity, so his powers did not include 

hiring and reprimanding those responsible for TSR violations. 

In sum, Ian’s equity ownership of Day Pacer does not demonstrate authority to control its decisions. He is thus only 

personally liable for the entity’s actions after he assumed an 

officer position. 

III

The Estate argues next that even if Cumming was individually liable for the companies’ TSR violations, the district 

court improperly substituted it into the litigation upon his 

death. See FED. R. CIV. P. 25(a). The Commission responds that 

the Estate was properly substituted in as a party. 

We review the district court’s substitution decision de 

novo for legal issues, while factual findings are reviewed for 

clear error. Russell v. City of Milwaukee, 338 F.3d 662, 665 (7th 

Cir. 2003). 

Our circuit holds that “actions for penalties do not survive” a party’s death, yet remedial actions do. Smith v. No. 2 

Galesburg Crown Fin. Corp., 615 F.2d 407, 414–15 (7th Cir. 

1980), overruled on other grounds by Pridegon v. Gates Credit Union, 683 F.2d 182, 194 (7th Cir. 1982); see also Parchman v. SLM 

Corp., 896 F.3d 728, 738 (6th Cir. 2018) (same). The distinction 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
20 Nos. 23-3310, 24-1273 & 24-1289 

between penal versus remedial turns on three factors: “(1) 

whether the purpose of the action is to redress individual 

wrongs or wrongs to the public; (2) whether recovery runs to 

the individual or to the public; (3) whether the authorized recovery is wholly disproportionate to the harm suffered.” 

Smith, 615 F.2d at 414; Parchman, 896 F.3d at 738. 

First, the Commission asserts that the purpose of the action is safeguarding individual rights, not protecting the public as a whole. The Estate argues that the focus must be on the 

specific enforcement action, rather than the statutory scheme 

writ large. And, the Estate continues, this action was brought 

primarily to redress wrongs to the public. The Estate relies on 

Smith for its view, but that decision did not take such a narrow 

approach. Rather, Smith expressly considered the “statutory 

scheme” and “the entire focus of the legislation.” 615 F.2d at 

414. 

The Sixth Circuit’s analysis in Parchman on this score is instructive, as it dealt with the analogous TCPA.4 See 47 U.S.C. 

§ 227. That circuit held that the TCPA’s purpose, as clarified 

in express congressional findings, was to “protect individuals 

from the harassment, invasion of privacy, inconvenience, nuisance, and other harms associated with unsolicited, 

4 As discussed above, the TSR and TCPA prohibit many of the same 

telemarketing activities. See supra note 2. The TCPA makes illegal any 

communications to consumers on the registry “for the purpose of encouraging the purchase or rental of, or investment in, property, goods, or services,” while the TSR forbids any “plan, program, or campaign which is 

conducted to induce the purchase of goods or services.” 47 U.S.C. 

§ 227(a)(4); 16 C.F.R. § 310.2(hh). Due to this overlap, TCPA cases may be 

persuasive in the TSR context, at least in discerning the statute’s overarching purpose—the aim of the first Smith factor. 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 21

automated calls.” 896 F.3d at 738. Simply because “the harm 

is widely shared does not mean it is a general public wrong.” 

Id. at 739. Rather, the harms are “felt by identifiable individuals, as individuals.” Id. And our circuit, when deciding how 

broadly to construe the TCPA in favor of consumers, has 

joined other circuits in describing the statute as remedial due 

to its emphasis on consumer protection. Physicians Healthsource, Inc. v. A-S Medication Sols., LLC, 950 F.3d 959, 967 (7th 

Cir. 2020); Gager v. Dell Fin. Servs., LLC, 727 F.3d 265, 271 (3d 

Cir. 2013); Physicians Healthsource, Inc. v. Boehringer Ingelheim 

Pharms., Inc., 847 F.3d 92, 96 (2d Cir. 2017). 

So too here, the congressional findings behind the TSR 

state that consumers “are estimated to lose $40 billion a year 

in telemarketing fraud,” and that “consumers are victimized 

by other forms of telemarketing deception and abuse.” 15 

U.S.C. § 6101(3)–(4).5 Responding to these concerns, Congress 

enacted “legislation that will offer consumers necessary protection from telemarketing deception and abuse.” Id.

§ 6101(5). These congressional findings show the TSR was 

promulgated with the same consumer-centric focus as the 

TCPA. This factor thus cuts in favor of finding this action remedial.

Second, the Estate and the Commission agree that the recovery here flows to the government, which points toward 

finding the action penal, not remedial. See Smith, 615 F.2d at 

414; Parchman, 896 F.3d at 740. 

5 The Commission promulgated the TSR to carry out 15 U.S.C. 

§§ 6101–6108. See 16 C.F.R. § 310.1 (identifying the statutory source of the 

TSR).

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
22 Nos. 23-3310, 24-1273 & 24-1289 

Third, Smith provides that an action is likely penal when 

its authorized recovery is greatly disproportionate to the 

harm inflicted. 615 F.2d at 414. The core dispute here is 

around the term “authorized.” The Estate argues that the authorized penalty is the statutory maximum, over $107 billion. 

This represents the maximum per-violation penalty, multiplied by nearly 4.2 million illegal calls. The Commission responds that the statute requires the court to consider various 

factors in imposing the penalty, so it cannot just automatically 

award the statutory maximum. Instead, it submits that we 

should look only to the award the district court fashioned. 

But the Commission’s assertion is incorrect. Smith borrowed its three-part test from a Sixth Circuit case with the 

same factors. See 615 F.2d at 414 (citing Murphy v. Household 

Fin. Corp., 560 F.2d 206, 209 (6th Cir. 1977)). And Murphy’s 

third prong was “whether the recovery authorized by the statute is wholly disproportionate to the harm suffered.” 560 F.2d 

at 209 (emphasis added). Further, the Supreme Court case 

Murphy relied on discussed “[p]enal laws,” not just penal 

awards. See Huntington v. Attrill, 146 U.S. 657, 667–68 (1892).

We must therefore look to the recovery authorized by the statute in discerning whether the action is remedial or penal, not 

simply the ultimate award.

The Commission is correct, however, that at least for this 

statute, we cannot consider only the statutory maximum. The 

district court is not permitted to award that maximum in all 

instances. Rather, it must consider all statutory factors when 

fashioning its award. See 15 U.S.C. § 45(m)(1)(C). So, if it reflexively awarded only the maximum, such an award would 

not be “authorized.” A court is “authorized” to act only if it 

has “official permission” or “formal approval.” OXFORD 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 23

ENGLISH DICTIONARY (3d ed. 2014); see also WEC Carolina Energy Sols. LLC v. Miller, 687 F.3d 199, 204 (4th Cir. 2012) (defining “authorization” as “formal warrant, or sanction”). The 

court does not have “official permission” or “sanction” to 

award the statutory maximum in all cases, without adjusting 

that award as the statutory factors require. Doing so would 

constitute an abuse of discretion.

The statutory maximum cannot be the only consideration. 

Yet, when read in light of other provisions in the FTC Act, 

under § 45(m) the district court may grant an award that is 

not tied to any underlying harm. See Maracich v. Spears, 570 

U.S. 48, 65–68 (2013) (instructing that statutory provisions 

should “be construed within the context of the [Act] as a 

whole”). Section 57b allows courts to “grant such relief as the 

court finds necessary to redress injury to consumers or other” 

parties injured by deceptive practices. 15 U.S.C. § 57b(b). But 

this provision allows damages only to compensate for 

concrete harms, barring “the imposition of any exemplary or 

punitive damages.” Id. The damages are only compensatory 

because this provision is strict liability: plaintiffs can recover 

regardless of the defendant’s mental state.

To the contrary, § 45(m) imposes a mens rea requirement. 

The defendant must have “actual knowledge or knowledge 

fairly implied on the basis of objective circumstances” that he 

violates the law. Id. § 45(m)(1)(A). This knowledge requirement explains why there is no limitation on damages only to 

“redress injury to consumers.” See Motorola Sols., Inc. v. Hytera 

Commc’ns Corp., 108 F.4th 458, 496–97 (7th Cir. 2024); Eisenhour v. County, 897 F.3d 1272, 1281 (10th Cir. 2018) (discussing 

the connection between mens rea and punitive damages). 

Thus, the government is not prohibited from seeking punitive 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
24 Nos. 23-3310, 24-1273 & 24-1289 

damages, allowing the court to punish each violation with an 

award in the tens of thousands of dollars. See 16 C.F.R. § 1.98.

Although the court may not award the statutory maximum in 

all instances, it is authorized to impose damages “wholly disproportionate to the harm suffered.” Smith, 615 F.2d at 414. 

This factor accordingly cuts in favor of finding the action penal.

In sum, we recognize that the statute’s purpose may be remedial. But the recovery flows to the federal treasury and, 

once § 45(m) is read against other provisions of the FTC Act, 

it is apparent that the authorized recovery can be disproportionate to any harm. See ANTONIN SCALIA &BRYAN A.GARNER,

READING LAW: THE INTERPRETATION OF LEGAL TEXTS 167–69 

(2012) (discussing the need to construe a statute as a whole). 

These two factors demonstrate that the action is penal. Under 

Smith, the district court’s damages award did not survive

Cumming’s death, so the Estate was improperly substituted.

IV

The defendants challenge the district court’s damages 

award in three ways. First, they assert the $28 million civil 

penalty was excessive, as it is grossly disproportionate to any 

harm suffered from the telemarketing calls. They also claim 

the court’s calculation was procedurally improper, as it did 

not consider required statutory factors. The Commission 

counters by arguing the court did not abuse its discretion in 

determining the award. 

Second, the defendants take issue with the district court’s 

decision to make the award joint and several. They argue that 

the award instead should have been assessed against each individual. The Commission responds that the district court 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 25

already performed an individualized assessment at the liability phase, so it did not need a second analysis at the penalty 

stage. Third, the Day Pacer Defendants claim the district court 

improperly considered all transfers made by IBT Partners in 

fashioning its award, despite only making factual findings as 

to one of them. The Commission responds the transferred 

calls were properly considered, and even if not, they made an 

immaterial difference in the court’s award. 

A 

Our court reviews the district court’s civil penalty award 

for abuse of discretion. S.E.C. v. Williky, 942 F.3d 389, 393 (7th 

Cir. 2019). Reversal if proper only if “the record contains no 

evidence upon which the court could have rationally based its 

decision; the decision is based on an erroneous conclusion of 

law; the decision is based on clearly erroneous factual findings; or the decision clearly appears arbitrary.” Id. (quoting 

United States v. Z Inv. Props., LLC, 921 F.3d 696, 698 (7th Cir. 

2019)). 

The defendants first argue the district court erred by imposing a penalty equal to gross income, rather than basing it 

on harm inflicted. We disagree. Our court dealt with a similar 

issue in United States v. Dish Network L.L.C., 954 F.3d 970 (7th 

Cir. 2020). There, DISH violated the TSR, the TCPA, and a 

host of similar state laws for contacting do-not-call consumers. Id. at 973. The district court awarded $280 million in damages against DISH, which represented 20% of the company’s 

annual profits. Id. at 980. We ruled that this award was impermissible, as it was based “entirely on DISH’s ability to pay.” 

Id. Some of the statutes at issue there—the TCPA and certain

state laws—did not list “ability to pay as even a permissible 

factor,” so the damages issue was remanded for further 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
26 Nos. 23-3310, 24-1273 & 24-1289 

consideration. Id. Our court cautioned that, even under statutes that permit considering defendants’ ability to pay, to ensure any penalty is “within a constitutionally allowable range 

... the best way to do this is to start from harm rather than 

wealth,” adjusting that number as the district court sees fit. Id. 

In Dish, our court said that the legal system typically “bases civil damages and penalties on harm done.” Id. But it 

pointed out that lawmakers “can change this norm,” usually 

by permitting courts to consider other factors. Id. That is precisely what § 45(m) did. When fashioning an award, the court 

must consider four mandatory factors, none of which is consumer harm. 15 U.S.C. § 45(m)(1)(C). As discussed above, see 

supra Section III, the provision’s punitive nature means the 

court is not limited to fashioning an award only to compensate for demonstrable harm. A different section of the FTC Act 

accomplishes that. Id. § 57b(b).6 Rather, the section at issue 

here was meant to impose a greater punishment on violators 

who had knowledge—either “actual” or “fairly implied”—of 

their wrongdoing. Id. § 45(m)(1)(A).7

6 This section directs courts to fashion an award that is “necessary to 

redress injury to consumers or other persons, partnerships, and corporations resulting from the rule violation or the unfair or deceptive act or 

practice.” 15 U.S.C. § 57b(b). To the contrary, § 45(m) does not contain any 

language limiting awards to consumer redress.

7 The defendants’ argument that the district court’s award conflicts 

with AMG Capital Management, LLC v. FTC, 141 S. Ct. 1341 (2021), is misplaced. That case held that the FTC Act’s provision authorizing injunctive 

relief does not allow a court to award equitable monetary relief. Id. at 1347

(citing 15 U.S.C. § 53(b)). It did not address whether disgorgement would 

be proper under the provision at issue here, § 45(m). 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 27

To be sure, Dish held that the FTC Act does not permit the 

defendant’s wealth “to be the sole factor” in fashioning an 

award. 954 F.3d at 980. This is true, as § 45(m) directs the court 

to consider numerous other ones. That leads us to the defendants’ second challenge to the award: that the district court did 

not consider all mandatory factors. Section 45(m)(1)(C) requires the court to consider “degree of culpability, any history 

of prior such conduct, ability to pay, effect on ability to continue to do business, and such other matters as justice may 

require.” When statutes mandate consideration of factors, a 

district court must “sufficiently explain its decision to show 

us that it considered” them. Patton v. MFS/Sun Life Fin. Distribs., Inc., 480 F.3d 478, 490 (7th Cir. 2007). “A rote statement 

that the judge considered all relevant factors will not always 

suffice.” United States v. Cunningham, 429 F.3d 673, 679 (7th 

Cir. 2005). 

In its initial summary judgment order, the court requested 

additional briefing on the defendants’ ability to pay, as well 

as “the effect any penalty would have on” the entities’ ability 

to continue to do business. The Estate filed a brief that included a section discussing its ability to pay and its assets, 

which all other defendants “joined.” Although the non-Estate 

defendants did not divulge their assets in this round of briefing, the district court could have considered their financial 

estimates provided earlier in the litigation. But in its $28.6 million damages award order, the district court did not discuss 

the defendants’ ability to pay. Nor did it address their financial wherewithal elsewhere in the record.

The court also did not make any findings as to the companies’ ability to do business. While Raymond asserted that Day 

Pacer is no longer in operation, the Commission noted that 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
28 Nos. 23-3310, 24-1273 & 24-1289 

the entity still had an active corporate registration. If Day 

Pacer was truly non-operational, the district court did not 

need to dwell on this factor. But because the record is silent as 

to its status, we do not know whether that factor should have 

played a larger role in the damages award calculation. That 

these two factors are missing makes it impossible to conclude 

the district court “considered the relevant factors,” Patton, 480 

F.3d at 490, and was an abuse of discretion. 

Third, the Day Pacer Defendants submit that the district 

court improperly considered all calls placed by the IBT Partners when fashioning its award, even though it made express 

findings only as to one, Bluewater. The companies themselves 

were responsible for 3,669,914 illegal calls, while the IBT Partners transferred another 498,597 illegal calls to the LLCs. But 

there were dozens of IBT Partners, with Bluewater accounting

for only a small fraction of those nearly half-million illegal 

calls. 

The district court imputed all IBT Partners’ illegal calls to 

the defendants for purposes of calculating the award, despite 

making factual findings only as to Bluewater. But the defendants cannot be held liable for actions on which the district 

court did not make findings. On remand, the district court 

should consider solely the companies’ 3,669,914 calls, as well 

as Bluewater’s share of the 498,597 inbound transfer calls. 

We do not take a position on whether the dollar amount 

of the award, standing alone, constituted an abuse of discretion. Rather, we hold only that the district court abused its 

discretion in the procedures used to arrive at the award.

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 29

B 

The defendants assert the district court erred in imposing 

joint and several liability, rather than performing an individualized assessment for each defendant. The Commission

responds that the district court already performed an individualized assessment at the liability phase, so it did not need a 

second analysis at the penalty stage. 

The defendants’ argument runs headlong into our precedent. This court has repeatedly held individuals jointly and 

severally liable without undertaking individual § 45(m) analyses for each defendant. See World Media Brokers, 415 F.3d at 

763–66; F.T.C. v. Bay Area Bus. Council, Inc., 423 F.3d 627, 632, 

635–38 (7th Cir. 2005). Joint and several liability is appropriate 

whenever a plaintiff can “establish that each defendant acted 

in concert to ‘produce a single, indivisible injury.’” Harper v. 

Albert, 400 F.3d 1052, 1061–62 (7th Cir. 2005) (quoting Watts v. 

Laurent, 774 F.2d 168, 179 (7th Cir. 1985)). And defendants act 

in concert when there exists an “agreement to cooperate in a 

particular line of conduct or to accomplish a particular result.” RESTATEMENT (SECOND) OF TORTS § 876 cmt. a. If multiple defendants “jointly cause harm, each defendant is held 

liable for the entire amount of the harm; provided, however, 

that the plaintiff recover only once for the full amount.” Honeycutt v. United States, 581 U.S. 443, 447–48 (2017). 

Here, each injury—communication to a do-not-call consumer—is indivisible as to each defendant. And as established when holding each individual liable for the companies’

actions, Raymond and Ian cooperated to achieve each injury.

They were on extensive email chains with one another, discussed complaints against the companies together, and formulated business plans together. Accordingly, the district 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
30 Nos. 23-3310, 24-1273 & 24-1289 

court appropriately imposed joint and several liability on Ian 

and Raymond after finding them individually liable for the 

entities’ acts.8

Although joint and several liability is appropriate when 

the injury is indivisible, as discussed in Section II.B, Ian is not 

liable for calls placed before he became president of Day 

Pacer. The Commission has shown it has data available to determine when all calls occurred. As such, the district court 

should review that information and impose liability for preJune 2016 TSR violations solely on the entities and Raymond.

V 

The Day Pacer Defendants assert that the district court’s 

injunction is too broad. The court prohibited them from “participating in Telemarketing or assisting others engaged in Telemarketing, whether directly or through an intermediary.” It 

defined telemarketing as “any plan, program, or campaign 

which is conducted to induce the purchase of goods or services by use of one or more telephones, and which involves a 

telephone call, whether or not covered by the Telemarketing 

Sales Rule.”

Instead, the Day Pacer Defendants believe the court 

should have enjoined them only from (1) calling consumers 

on the registry and (2) telemarketing calls related to for-profit 

education companies. They further argue that the injunction 

as written would interfere with their livelihoods. The Commission responds that injunctions are often not limited to 

8 Cumming also participated, but recall we have concluded that the 

Estate was improperly substituted. Therefore, the Estate cannot be jointly 

and severally liable for the award.

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
Nos. 23-3310, 24-1273 & 24-1289 31

preventing the exact harm giving rise to the injunction, but 

usually sweep in additional activity. 

We review the district court’s injunction for abuse of discretion. S.E.C. v. Yang, 795 F.3d 674, 681 (7th Cir. 2015). The 

court has wide latitude in fashioning broad equitable relief. 

Indeed, it “is not limited to prohibiting the illegal practice in 

the precise form in which it is found to have existed in the 

past. ... [I]t must be allowed effectively to close all roads to 

the prohibited goal, so that its order may not be by-passed 

with impunity.” F.T.C. v. Ruberoid Co., 343 U.S. 470, 473 (1952).

The Fourth Circuit recently dealt with a district court order enjoining similar misconduct. The defendant had violated 

the TSR by fraudulently selling foreign rental properties. 

F.T.C. v. Pukke, 53 F.4th 80, 97–98 (4th Cir. 2022). The district 

court enjoined him from “any and all telemarketing activity 

whatsoever,” not just telemarketing violating the TSR. See In 

re Sanctuary Belize Litig., 482 F. Supp. 3d 373, 469 (D. Md. 

2020). The Fourth Circuit affirmed the injunction over an 

overbreadth challenge, noting that the Commission can “seek 

injunctions framed ‘broadly enough to prevent [defendants]

from engaging in similarly illegal practices in future advertisements.’” Pukke, 53 F.4th at 110 (quoting F.T.C. v. ColgatePalmolive Co., 380 U.S. 374, 395 (1965)). 

The district court’s relief here, while broad, was not an 

abuse of discretion. Given the defendants’ flagrant misconduct—illegally calling millions of registry consumers—a 

broad injunction was warranted. 

Raymond and Ian complain that the injunction improperly restricts their ability to earn a living. For instance, Raymond asserts he is still a partner at a law firm, and the terms 

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32
32 Nos. 23-3310, 24-1273 & 24-1289 

of the injunction would prohibit him from selling services to 

potential clients. Ian points out that he owns a new telemarketing business, but that this business sells goods and services 

only to other businesses—an activity not prohibited by the 

TSR. Without question, the district court’s injunction may inhibit the defendants’ ability to earn money legitimately. But 

that consequence should have been contemplated before placing millions of illegal telemarketing calls.

The district court acted within its wide discretion in prohibiting not only calls that violate the TSR, but also communications that may possibly result in a violation. Indeed, the 

injunction effectively “close[s] all roads to the prohibited 

goal,” even if it includes some legal activity. Ruberoid Co., 343 

U.S. at 473. 

* * *

The judgment of the district court is affirmed, other than 

its calculation of damages and its decision to substitute the 

Estate as a party. Those two sections of its summary judgment 

orders are reversed, and we remand the case for further proceedings consistent with this opinion.

Case: 24-1273 Document: 44 Filed: 01/03/2025 Pages: 32