No. 19- 

IN THE 

Supreme Court of the United States 

————— 

FEDERAL TRADE COMMISSION, 

PETITIONER 

v. 

CREDIT BUREAU CENTER, LLC AND MICHAEL BROWN 

————— 

ON PETITION FOR A WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT 

————— 

PETITION FOR A WRIT OF CERTIORARI 

AND APPENDIX 

————— 

ALDEN F. ABBOTT* 

General Counsel 

JOEL MARCUS 

Deputy General Counsel 

for Litigation 

MICHAEL BERGMAN 

THEODORE (JACK) METZLER 

MATTHEW M. HOFFMAN 

Attorneys 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Ave. NW 

Washington, D.C. 20580 

(202) 326-2505 

aabbott@ftc.gov 

* Counsel of Record 
QUESTION PRESENTED 

Under Section 13(b) of the Federal Trade Commission 

Act, 15 U.S.C. 53(b), the Commission may sue those who 

violate the laws under its purview in federal district court. 

The statute authorizes district courts in such cases to issue 

“a permanent injunction.” Seven courts of appeals have 

held that district courts exercising that authority may 

enter an injunction that requires defendants to return to 

the victims of their wrongdoing funds obtained through 

their illegal activity. One has held the opposite. 

The question presented is: 

Whether Section 13(b) authorizes district courts to enter an injunction that orders the return of unlawfully obtained funds. 

(I) 
 

 

II 

PARTIES TO THE PROCEEDING BELOW 

The caption contains the name of all the parties in the 

court of appeals. 
 

 

 

III 

TABLE OF CONTENTS 

Page 

Opinions Below ...................................................................... 2 

Jurisdiction ............................................................................. 2 

Statutes Involved ................................................................... 2 

Statement ............................................................................... 2 

Reasons For Granting The Petition ................................. 10 

I. This Case Presents A Square Circuit Split 

On An Important And Recurring Issue. ............... 11 

II. The Court Of Appeals’ Decision Is Incorrect. ...... 13 

III. The Question Presented Merits Plenary 

Review And This Case Is The Ideal Vehicle 

To Resolve It. ............................................................ 22 

Conclusion ............................................................................ 26 

APPENDIX TABLE OF CONTENTS 

Court of Appeals Opinion 

(Aug. 21, 2019) ................................................................ 1a 

District Court Opinion 

(June 26, 2018) ............................................................. 65a 

District Court Judgment 

(June 26, 2018) ........................................................... 101a 

District Court Final Judgment and Order 

(June 26, 2018) ........................................................... 103a 

Relevant Statutory Provisions ...................................... 135a 
 

IV 

TABLE OF AUTHORITIES 

Page 

Cases: 

California v. American Stores Co., 

495 U.S. 271 (1990) .................................................. 15, 16 

FTC v. Amy Travel Serv., Inc., 

875 F.2d 564 (7th Cir. 1989) ...................................... 3, 17 

FTC v. Bronson Partners, LLC, 

654 F.3d 359 (2d Cir. 2011) ........................................ 4, 11 

FTC v. Direct Mktg. Concepts, Inc., 

624 F.3d 1 (1st Cir. 2010) ........................................... 4, 11 

FTC v. Freecom Commc’ns, Inc., 

401 F.3d 1192 (10th Cir. 2005) .................................. 4, 12 

FTC v. H.N. Singer, Inc., 

668 F.2d 1107 (9th Cir. 1982) .............................. 3, 12, 17 

FTC v. Penn State Hershey Med. Ctr., 

838 F.3d 327 (3d Cir. 2016 ............................................... 3 

FTC v. Ross, 743 F.3d 886 (4th Cir. 2014) ..................... 4, 12 

FTC v. Sec. Rare Coin & Bullion Corp., 

931 F.2d 1312 (8th Cir. 1991) .............................. 3, 12, 17 

FTC v. U.S. Oil & Gas Corp., 

748 F.2d 1431 (11th Cir. 1984) ............................ 3, 12, 17 

Kansas v. Nebraska, 

135 S. Ct. 1042 (2015) .............................................. 19, 20 

Kokesh v. SEC, 137 S. Ct. 1635 (2017) ................... 11, 23, 24 

Lorillard v. Pons, 434 U.S. 575 (1978) .............................. 16 

Meghrig v. KFC Western, Inc., 

516 U.S. 479 (1996) .............................................. 8, 18, 19 

Miller v. French, 530 U.S. 327 (2000) ................................ 20 

Mitchell v. Robert DeMario Jewelry, Inc., 

361 U.S. 288 (1960) ...................................... 4, 5, 8, 15, 21 
 

V 

NLRB v. Bell Aerospace Co., 

416 U.S. 267 (1974) ........................................................ 20 

North Haven Bd. of Educ. v. Bell, 

456 U.S. 512 (1982) ........................................................ 17 

Osborn v. Bank of the United States, 

22 U.S. 738 (1824) .......................................................... 14 

Porter v. Warner Holding Co., 

328 U.S. 395 (1946) .................................... 4, 5, 10, 15, 20 

SEC v. Chenery Corp., 

332 U.S. 194 (1947) ........................................................ 20 

SEC v. Fischbach Corp., 

133 F.3d 170 (2d Cir. 1997) ............................................ 24 

SEC v. Manor Nursing, 

458 F.2d 1082 (1972) ....................................................... 16 

SEC v. Texas Gulf Sulphur, 

446 F.2d 1301 (1971) ....................................................... 16 

Texas Dept. of Housing & Community 

Affairs v. Inclusive Communities Project, Inc., 

135 S. Ct. 2507 (2015) .................................................... 17 

United States v. Lane Labs-USA, Inc., 

427 F.3d 219 (3d Cir. 2005) ...................................... 19, 20 

United States v. Oakland Cannabis Buyers’ 

Co-Op., 532 U.S. 483 (2001) .......................................... 20 

United States v. Rx Depot, Inc., 

438 F.3d 1052 (10th Cir. 2006) ...................................... 20 
VI 

Statutes, Court Rules, Legislative Materials: 

Federal Trade Commission Act 

15 U.S.C. 45(a) ................................................................. 2 

15 U.S.C. 45(b) ........................................................... 2, 20 

15 U.S.C. 45(l) ...................................................... 7, 12, 21 

15 U.S.C. 53(b) ........................................................... 3, 20 

15 U.S.C. 56 ...................................................................... 1 

15 U.S.C. 57a .................................................................. 20 

15 U.S.C. 57b .................................................................... 8 

15 U.S.C. 57b(a) ............................................................. 13 

15 U.S.C. 57b(e)..................................................... 8, 9, 21 

28 U.S.C. 2462 ...................................................................... 23 

29 U.S.C. 217 .......................................................................... 5 

42 U.S.C. 6972(a) ................................................................. 18 

7th Cir. R. 40(e)...................................................................... 7 

Pub. L. No. 103-312, § 10 (1994) ........................................ 17 

Pub. L. 109-455, § 3 (2006).................................................. 17 

S. Rep. No. 93-151 (1973) ...................................................... 3 

S. Rep. No. 103-130 (1993).................................................. 17 

Other Authorities: 

Black’s Law Dictionary (10th ed. 2014) ............................ 14 

FTC, Semiannual Federal Court Litigation Status 

1 Dan B. Dobbs, Law of Remedies (2d ed. 1993) 

1 Howard C. Joyce, A Treatise on the Law 

Report (June 30, 2019) .................................................. 13 

§ 1.1 ................................................................................. 15 

§ 2.9 .................................................................................. 15 

Relating to Injunctions (1909) 

§ 2 .................................................................................... 15 

 § 2a ................................................................................... 15 
 

VII 

2 Joseph Story, Commentaries on Equity 

Jurisprudence: As Administered in 

England and America (1836) 

§ 861 ................................................................................. 14 

§ 862 ................................................................................ 14 

 

 

 

IN THE 

Supreme Court of the United States ————— 

FEDERAL TRADE COMMISSION, 

PETITIONER 

v. 

CREDIT BUREAU CENTER, LLC AND MICHAEL BROWN 

————— 

ON PETITION FOR A WRIT OF CERTIORARI 

TO THE UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT 

————— 

PETITION FOR A WRIT OF CERTIORARI 

The Federal Trade Commission, pursuant to the authority of 15 U.S.C. 56(a)(3)(A), respectfully petitions for a 

writ of certiorari to review a judgment of the United States 

Court of Appeals for the Seventh Circuit.1 

————— 

1

 The Commission rarely exercises its authority to represent itself 

before this Court, having done so only four times previously since 

Congress granted that authority 44 years ago. The Commission takes 

this step now not only because the decision of the court of appeals is at 

odds with the holdings of seven other circuits and this Court’s precedents, but also because of the extraordinary importance of the issue 

presented. The decision of the court of appeals threatens the FTC’s 

ability to carry out its mission by eliminating one of its most important 

and effective enforcement tools. 

(1) 
2 

OPINIONS BELOW 

The opinion of the court of appeals (App., infra, 1a-63a) 

is reported at 937 F.3d 764. The opinion of the district court 

(App., infra, 65a-99a) is reported at 325 F. Supp. 3d 852. 

JURISDICTION 

The judgment of the court of appeals, accompanied by a 

denial of rehearing, was entered on August 21, 2019. On 

November 8, 2019, Justice Kavanaugh extended the time 

within which to file a petition for a writ of certiorari to and 

including December 19, 2019. The jurisdiction of this Court 

is invoked under 28 U.S.C. 1254(1). 

STATUTES INVOLVED 

Pertinent provisions of the Federal Trade Commission 

Act, 15 U.S.C. 41 et seq., are reproduced in the appendix to 

the petition (App., infra, 135a-143a). 

STATEMENT 

This case presents a square conflict among the circuits, 

explicitly acknowledged by the court below, on a recurring 

issue of law essential to effective enforcement of the Federal Trade Commission Act. 

1. Section 5 of the Federal Trade Commission Act prohibits “unfair methods of competition” and “unfair or deceptive acts or practices” in or affecting commerce, and 

“empower[s] and direct[s]” the Federal Trade Commission 

to “prevent” such conduct. 15 U.S.C. 45(a). Before 1973, 

the Commission generally could enforce these prohibitions 

only through administrative proceedings, in which the 

Commission’s sole remedy was an order to cease and desist 

from the unlawful practices. 15 U.S.C. 45(b). 

In 1973, Congress added Section 13(b) to the FTC Act, 

giving the Commission new authority to enforce Section 5 

directly in federal district courts. Section 13(b) authorizes 
 

3 

two distinct types of lawsuits. The bulk of the statute is 

devoted to actions for “a temporary restraining order or a 

preliminary injunction” in aid of an administrative proceeding. 15 U.S.C. 53(b). For example, when the Commission 

reviews the legality of a merger, Section 13(b) authorizes it 

to seek a preliminary injunction blocking the merger pending the completion of administrative proceedings. See, e.g., 

FTC v. Penn State Hershey Med. Ctr., 838 F.3d 327, 353-

354 (3d Cir. 2016). 

Section 13(b) also provides that “in proper cases the 

Commission may seek, and after proper proof, the court 

may issue, a permanent injunction” directly in federal 

district court. 15 U.S.C. 53(b). This proviso authorizes the 

Commission to file standalone enforcement actions without 

also undertaking an administrative proceeding. Congress 

added Section 13(b) to give the Commission the ability “to 

merely seek a permanent injunction in those situations in 

which it does not desire to further expand upon the prohibitions of the Federal Trade Commission Act through the 

issuance of a cease-and-desist order,” and it expected that 

by allowing such actions “Commission resources will be 

better utilized, and cases can be disposed of more efficiently.” S. Rep. No. 93-151, at 31 (1973). 

2. Until the decision in this case, the courts of appeals 

(including the Seventh Circuit) had uniformly held for 

more than 35 years that a district court’s authority to grant 

a permanent injunction under Section 13(b) includes the 

authority to require wrongdoers to return money that they 

illegally obtained.2

 Those decisions follow from this Court’s 

2

 See FTC v. H.N. Singer, Inc., 668 F.2d 1107 (9th Cir. 1982); FTC v. 

U.S. Oil & Gas Corp., 748 F.2d 1431, 1432, 1434 (11th Cir. 1984); FTC v. 

Amy Travel Serv., Inc., 875 F.2d 564, 571-572 (7th Cir. 1989); FTC v. 

Sec. Rare Coin & Bullion Corp., 931 F.2d 1312, 1314-1315 (8th Cir. 
 

 

4 

decisions in Porter v. Warner Holding Co., 328 U.S. 395 

(1946), and Mitchell v. Robert DeMario Jewelry, Inc., 361 

U.S. 288 (1960), holding that a district court exercising 

authority to enjoin violations of a regulatory statute may 

order violators to return their unlawful gains absent a clear 

congressional directive to the contrary. 

Porter addressed a federal rent control statute that authorized the government to sue for a “permanent or temporary injunction, restraining order, or other order” to 

enforce the statute. 328 U.S. at 397. The Court held that 

the district court’s remedial authority under the statute 

was not limited to prohibiting future violations; it also 

included the authority to order the refund of unlawfully 

collected rents. Ibid. 

The Court explained that by authorizing an injunction, 

the statute invoked the district court’s equitable jurisdiction, which made “all the inherent equitable powers of the 

District Court . . . available for the proper and complete 

exercise of that jurisdiction.” Id. at 398. Those powers 

“assume an even broader and more flexible character” 

where the statute protects the public interest, and may be 

limited only by “a clear and valid legislative command,” 

expressed “in so many words, or by a necessary and inescapable inference.” Ibid. 

Applying those principles, the Court found it “readily 

apparent” that the district court could enter an injunction 

that required the return of illegally collected rents. Ibid. 

“Nothing is more clearly a part of the subject matter of a 

suit for an injunction than the recovery of that which has 

1991); FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1202 n.6 (10th 

Cir. 2005); FTC v. Direct Mktg. Concepts, Inc., 624 F.3d 1, 15 (1st Cir. 

2010); FTC v. Bronson Partners, LLC, 654 F.3d 359, 365 (2d Cir. 2011); 

FTC v. Ross, 743 F.3d 886, 890-892 (4th Cir. 2014). 
5 

been illegally acquired and which has given rise to the 

necessity for injunctive relief.” Id. at 399. 

In Mitchell, the Court applied the same principles to 

uphold a monetary judgment entered under a provision of 

the Fair Labor Standards Act that empowered district 

courts to “restrain” violations. See 29 U.S.C. 217. The 

Court explained that “[w]hen Congress entrusts to an 

equity court the enforcement of prohibitions contained in a 

regulatory enactment, it must be taken to have acted cognizant of the historic power of equity to provide complete 

relief in light of the statutory purposes.” Mitchell, 361 U.S. 

at 291-292. The Court found it insignificant that the labor 

statute did not include the additional phrase “other order,” 

as the rent-control statute in Porter did. That clause was 

not necessary to the monetary judgment, but simply provided “confirmation” of the district court’s authority to 

order the payment of wages lost as a result of the violation. 

Id. at 296. 

3. The Commission depends heavily on Section 13(b) in 

carrying out its mandate to protect consumers and competition. It brings dozens of cases every year seeking a permanent injunction and the return of illegally obtained 

funds. As a result of Section 13(b) cases, the Commission 

has returned billions of dollars to consumers who have 

fallen victim to a wide variety of illegal scams. In some 

cases, courts order defendants to return money directly to 

consumers. Other times, the court orders money to be paid 

to the Commission itself, which then attempts to distribute 

recovered funds to injured consumers. Agency records 

show that from 2016 to 2019, the Commission returned 

approximately $977 million directly to consumers in Sec-
 

6 

tion 13(b) cases. Billions more were returned to consumers 

directly from defendants.3 

4. This case arises out of a scam perpetrated by respondents Michael Brown and his company, Credit Bureau 

Center, LLC. Respondents offered consumers a “free” 

credit report, but those who accepted were unwittingly 

enrolled in a credit-monitoring service for $30 per month. 

Respondents drove consumers to their websites through an 

affiliate that posted bogus ads for rental apartments on 

Craigslist. The ads and subsequent emails falsely offered 

desirable properties at attractive prices and instructed 

applicants to obtain a credit report from respondents. 

Duped consumers submitted more than 500 complaints to 

the FTC, other law enforcement agencies, and the Better 

Business Bureau, and suffered over $6 million in losses. 

The Commission sued under Section 13(b), seeking to 

halt continuing violations and return the unlawful gains to 

consumers. The district court awarded summary judgment 

to the Commission. It entered a permanent injunction 

barring future violations of the FTC Act and requiring 

respondents to repay $5.2 million, the net amount they 

took from consumers after deducting amounts recovered 

from settling codefendants. App., infra, 103a-134a. 

The district court directed that those sums be used to 

compensate injured consumers as “restitution.” App., 

infra, 88a-89a. The judgment specifies that the money 

“may be deposited into a fund administered by the Commission or its designee to be used for equitable relief, including consumer redress and any attendant expenses for 

3

 When it is not possible to identify victims, or distribution costs 

would exceed the available funds, the FTC remits money to the Treasury. In the 2016-2019 period, that happened with about $15 million, a 

small fraction of the funds recovered under Section 13(b). 
7 

the administration of any redress fund.” Id. at 127a. If 

“direct redress to consumers is wholly or partially impracticable or money remains after redress is completed,” the 

Commission may seek court approval to apply any remaining money to “other equitable relief ” reasonably related to 

Brown’s unlawful practices. Ibid. Only if funds remain 

after that may they “be deposited to the U.S. Treasury.” 

Ibid. 

5.a. On appeal, the Seventh Circuit affirmed the finding 

of liability but reversed the monetary judgment. The court 

overruled its longstanding precedent to hold that Section 

13(b) does not authorize monetary relief. The court acted 

pursuant to a circuit rule permitting a panel to overrule 

circuit precedent or create a circuit split so long as a majority of the active judges does not vote for rehearing en 

banc. See 7th Cir. R. 40(e). The court acknowledged that its 

decision created a split with the seven other courts of appeals that have held that Section 13(b) authorizes monetary relief. App., infra, 3a n.1, 39a. 

Examining Section 13(b)’s authorization to enter “a 

permanent injunction,” the court thought it “obvious” that 

“[r]estitution isn’t an injunction.” App., infra, 12a. The 

court described an injunction as a “forward-facing” remedy 

and restitution as “a remedy for past actions.” Id. at 14a. It 

contrasted the language of Section 13(b) with two other 

provisions of the FTC Act, Sections 5(l) and 19, which it 

characterized as “backward-facing methods to obtain monetary relief for past injury.” Id. at 17a.

 Section 5(l) authorizes the Commission to seek civil 

penalties against parties that violate an administrative 

cease-and-desist order and permits courts in such cases to 

award “mandatory injunctions and such other and further 

equitable relief as they deem appropriate.” 15 U.S.C. 45(l). 
8 

Section 19 authorizes courts to order relief “necessary to 

redress injury” against persons who (1) violate a Commission rule; or (2) have been ordered to cease and desist from 

illegal practices in an administrative proceeding. 15 U.S.C. 

57b. Although Section 19 specifies that its remedies are “in 

addition to, and not in lieu of, any other remedy or right of 

action” available to the Commission, 15 U.S.C. 57b(e), the 

court did not believe that the savings clause prevented it 

from relying on Section 19’s remedies to find that monetary relief is unavailable under Section 13(b). In the court’s 

view, such relief would “effectively nullif[y]” Section 19, and 

it thus declined to read the savings clause to authorize 

what it described as “that self-defeating effect.” App., 

infra, 19a. 

The court next considered the holdings in Porter and 

Mitchell that Congress authorizes monetary remedies 

when it empowers district courts in enforcement lawsuits 

to issue an “injunction” or to “restrain” violations. App., 

infra, 20a-23a, 29a-33a. It concluded that those decisions 

were no longer binding because they had been undermined 

by this Court’s later decision in Meghrig v. KFC Western, 

Inc., 516 U.S. 479 (1996). Meghrig held that the citizen-suit 

provisions of the Resource Conservation and Recovery Act 

(RCRA) did not allow a private party to recover costs incurred to clean up previously contaminated land. The court 

read Meghrig as having adopted a “more limited understanding of judicially implied remedies” than the one espoused in Porter and Mitchell. App., infra, 31a. In particular, whereas Mitchell instructed courts to “provide complete relief in light of the statutory purposes,” 361 U.S. at 

292, after Meghrig, the court of appeals believed that “an 

exploration of statutory purpose is no longer the Supreme 

Court’s polestar in cases raising interpretive questions 
9 

about the scope of statutory remedies.” App., infra, 32a. 

The court viewed this case as “materially indistinguishable” from Meghrig. Id. at 38a. 

b. Chief Judge Wood, joined by Judges Rovner and 

Hamilton, dissented from the denial of rehearing en banc. 

App., infra, 41a-63a. They disagreed with the panel’s conclusion that Congress’s use of the term “injunction” necessarily excludes an order of restitution. Rather, they opined, 

injunctions “come in all shapes and sizes” and may require 

a party to undertake affirmative acts, including “an order 

requiring the enjoined party to return ill-gotten gains, or 

to pay money into a court escrow account, or otherwise to 

turn over property.” Id. at 42a, 43a. 

The dissent argued that the multiple enforcement 

mechanisms provided in the FTC Act do not preclude 

reading Section 13(b) to authorize monetary relief. Rather, 

agencies have “broad discretion in their choice of which of 

several authorized procedural tools they wish to use as 

they carry out their mission.” App., infra, 45a. The dissent 

found that Section 19’s savings clause (15 U.S.C. 57b(e)) 

“says it all: the non-exhaustive examples of relief Congress 

chose to mention in one section do not limit what a court 

may or may not include pursuant to another section—for 

instance, a 13(b) injunction.” App., infra, 62a. Similarly, the 

“other and further equitable relief ” clause in Section 5(l) 

simply “clarifies that courts have a wide range of equitable 

relief available to them” to enforce a cease-and-desist order in addition to the limited mandatory injunction. Ibid. 

The dissent disagreed with the panel’s analysis of Meghrig. App., infra, 52a-55a. It noted that Meghrig involved 

private plaintiffs suing under a very different statutory 

scheme, and that even in that context Meghrig “did not 

purport categorically to exclude from injunctive relief an 
10 

order to make payments.” Id. at 54a. The dissent concluded 

that “[t]he majority’s interpretation upends what the agency and Congress have understood to be the status quo for 

thirty years, and in so doing grants a needless measure of 

impunity to brazen scammers like the defendant in this 

case.” Id. at 62-63a. 

REASONS FOR GRANTING THE PETITION 

The court of appeals’ decision creates a square circuit 

split on an important and recurring question: whether, in a 

suit brought under Section 13(b), a district court may order 

a defendant to both cease its illegal practices and return 

the money it gained as a result of those practices. The 

resolution of that question is critically important to the 

Commission’s ability to carry out its consumer protection 

and antitrust enforcement missions. The court of appeals’ 

decision neuters Section 13(b) within the Seventh Circuit 

and makes the remedies available to the Commission depend on the happenstance of geography. 

The court of appeals’ analysis of Section 13(b) is incorrect. The court’s cramped view that injunctions are strictly 

limited to prohibitions on future misconduct contradicts 

historical understanding of that remedy. Courts and commentators have understood since the founding era that 

injunctions may serve reparative purposes and may include an order requiring the defendant to yield up wrongfully acquired property. That principle informs the controlling decisions in Porter and Mitchell that a statute permitting an injunction invokes “all the inherent equitable powers of the District Court,” including the power to award 

monetary relief. Porter, 328 U.S. at 398. Porter and Mitchell were the law of the land when Congress added Section 

13(b) to the FTC Act, and they remain good law after Me-
11 

ghrig, which involved private litigation under a statute very 

different from Section 13(b). 

The Court should grant this petition notwithstanding 

the grant of certiorari in Liu v. SEC, No. 18-1501, which 

involves whether disgorgement under the securities laws is 

an equitable remedy in light of this Court’s decision in 

Kokesh v. SEC, 137 S. Ct. 1635 (2017), that such orders are 

penal in nature. The answer to that question will not resolve whether Section 13(b) authorizes district courts entering a permanent injunction against illegal conduct to 

order that money taken by that conduct be returned to 

consumers. The question here is distinct from the question 

in Liu, will not be resolved in that case, and warrants independent review. 

I. THIS CASE PRESENTS A SQUARE CIRCUIT SPLIT ON AN 

IMPORTANT AND RECURRING ISSUE. 

The decision of the court of appeals has unsettled the 

longstanding and uniform judicial interpretation that Section 13(b) authorizes district courts to enter injunctions 

requiring the return of illegally obtained funds. The court 

of appeals acknowledged that it was creating a circuit split 

when it held “that section 13(b)’s permanent-injunction 

provision does not authorize monetary relief.” App., infra, 

40a. Every other court of appeals that has decided that 

issue has held the opposite. 

Specifically, the First, Second, Fourth, Eighth, Ninth, 

Tenth, and Eleventh Circuits have all held that Section 

13(b) authorizes district courts to enter injunctions that 

include monetary relief. See FTC v. Direct Mktg. Concepts, 

Inc., 624 F.3d 1, 15 (1st Cir. 2010); FTC v. Bronson Partners, LLC, 654 F.3d 359, 367 (2d Cir. 2011) (“In sum, Section 13(b) of the FTC Act permits courts to award not only 

injunctive relief but also ancillary relief, including mone-
 

12 

tary relief.”); FTC v. Ross, 743 F.3d 886, 890-892 (4th Cir. 

2014) (“[B]ecause there is no affirmative and clear legislative restriction on the equitable powers of the district 

court, ordering monetary consumer redress is an appropriate ‘equitable adjunct’ to the district court’s injunctive 

power.”); FTC v. Sec. Rare Coin & Bullion Corp., 931 F.2d 

1312, 1314-1315 (8th Cir. 1991); FTC v. H.N. Singer, Inc., 

668 F.2d 1107 (9th Cir. 1982); FTC v. Freecom Commc’ns, 

Inc., 401 F.3d 1192, 1202 n.6 (10th Cir. 2005) (“[Section] 

13(b)’s grant of authority to provide injunctive relief carries with it the full range of equitable remedies, including 

the power to grant consumer redress.”); FTC v. U.S. Oil & 

Gas Corp., 748 F.2d 1431, 1432, 1434 (11th Cir. 1984). Unlike the decision below, those courts have continually applied this Court’s decisions in Porter and Mitchell to uphold that authority. 

The issue is critically important: the ability to seek an 

injunction that requires the defendant to return illegally 

obtained funds to consumers is essential to the effective 

enforcement of the FTC Act and other laws enforced by 

the Commission. Stripping district courts of that authority 

would reduce Section 13(b) to a stop sign and would effectively reward fraudsters for their illegal conduct. 

Contrary to the court of appeals’ view, neither Section 

5(l) nor Section 19 of the FTC Act is an adequate alternative to requiring the return of unlawful gains under Section 

13(b). Section 5(l) allows civil penalties, but only against 

parties who have already been ordered by the Commission 

to cease and desist in an administrative enforcement proceeding and who then violate that order. See 15 U.S.C. 

45(l). It does not allow courts to order the return of gains 

from the original misconduct that led to the cease-anddesist order. Section 19 is also of limited utility. Although it 
 

 

13 

authorizes district courts to redress harm to consumers 

from violations of FTC rules, 15 U.S.C. 57b(a)(1), many 

cases do not involve rule violations. Section 19 also allows 

district courts to redress consumer harm in certain cases 

against defendants who have gone through the administrative process and been ordered to cease and desist from 

unfair or deceptive acts or practices. 15 U.S.C. 57b(a)(2). 

That remedy would be illusory in most of the cases that the 

Commission brings under Section 13(b) because defendants would dissipate their ill-gotten gains long before the 

Commission ever got to court. In suits under Section 13(b), 

the district court may freeze assets at the outset of litigation, but Section 19 does not provide similar protection. 

The issue is also recurring. The FTC brings dozens of 

cases each year seeking injunctions that return funds to 

consumers under Section 13(b). As of mid-2019, 55 such 

cases were pending in district courts.4 The question presented here is integral to all of them. Three pending appellate cases raise the same issue, as do two currently pending 

petitions seeking certiorari in this Court. See FTC v. Hoyal 

& Assocs., No. 19-35668 (9th Cir.); FTC v. Abbvie, Inc., No. 

18-2621 (3d Cir.); FTC v. Dorfman, No. 19-11932 (11th Cir.); 

cert. petitions in Publishers Bus. Serv., Inc. v. FTC, No. 19-

507 & AMG Capital Mgmt., LLC v. FTC, No. 19-508. 

II. THE COURT OF APPEALS’ DECISION IS INCORRECT. 

1. The court of appeals’ decision rests on the proposition that “injunction” plainly refers only to forward-looking 

relief and necessarily excludes an order to return money 

4

 See generally FTC, Semiannual Federal Court Litigation Status 

Report, June 30, 2019, https://www.ftc.gov/system/files/attachments/ 

quarterly-litigation-status-report/semiannual_litigation_report_6-30-

19.pdf. 
14 

improperly obtained in the past. It is “obvious,” the court 

held, that “[r]estitution isn’t an injunction.” App., infra, 

12a. That narrow reading of “injunction” was error. 

Contrary to the court of appeals’ reading, it has long 

been understood that an injunction can provide for restitution or other forms of monetary relief to undo harm caused 

by the defendant’s conduct. The leading legal dictionary 

defines “injunction” as “[a] court order commanding or 

preventing an action” and notes that the term encompasses 

a “reparative injunction” which “requir[es] the defendant 

to restore the plaintiff to the position that the plaintiff 

occupied before the defendant committed a wrong.” 

Black’s Law Dictionary 904-905 (10th ed. 2014). Indeed, 

the understanding that injunctions may both prohibit future misconduct and remedy past harm by requiring the 

restoration of wrongfully obtained property dates at least 

to the earliest days of the Republic. Justice Story, for example, explained that although injunctions are “generally 

preventative and protective, rather than restorative,” they 

are “by no means confined to the former,” and “may contain a direction to the party defendant to yield up . . . lands 

or other property, constituting the subject-matter of the 

decree, in favor of the other party.” 2 Joseph Story, Commentaries on Equity Jurisprudence, as Administered in 

England and America §§ 861-862, at 154-155 (1836). Applying that principle in Osborn v. Bank of the United 

States, 22 U.S. 738 (1824), the Court affirmed an injunction 

that forbade enforcement of a state tax law against the 

Bank and directed the state to return money improperly 

seized from the Bank under that law. Id. at 870-871. 

An early-20th-century commentator similarly explained 

that injunctions may “in some cases be used to reinstate 

the rights of persons to property of which they have been 
15 

deprived,” and that “a preventative and a mandatory injunction” can be “made to co-operate so that by a single 

exercise of equitable power an injury is both restrained 

and repaired.” 1 Howard C. Joyce, A Treatise on the Law 

Relating to Injunctions §§ 2, at 5; 2a, at 7 (1909). In the 

modern era, the leading scholar on remedies, Professor 

Dobbs, agrees that an injunction “may attempt to prevent 

harm, or to compel some form of reparation for harm already done,” and that “some injunctive orders both repair 

and prevent harm.” 1 Dan B. Dobbs, Law of Remedies 

§§ 1.1, at 7; 2.9, at 225 (2d ed. 1993). Professor Dobbs specifically notes that an injunction may compel restitution. 

Id. § 1.1, at 7. 

Porter and Mitchell rest on the same principles. As the 

Court explained, “[n]othing is more clearly a part of the 

subject matter of a suit for an injunction than the recovery 

of that which has been illegally acquired and which has 

given rise to the necessity for injunctive relief.” Porter, 395 

U.S. at 399. It therefore requires an affirmative expression 

of Congress “in so many words, or by a necessary and 

inescapable inference,” to exclude that authority when 

Congress has authorized an injunction. Id. at 398; Mitchell, 

361 U.S. at 291. As further discussed below, those principles were well established when Congress granted district 

courts the authority to enter “a permanent injunction” in 

Section 13(b), but Congress did not place any limit on the 

grant of authority. The court of appeals, on the other hand, 

disregarded the established understanding by reading 

“injunction” to exclude monetary remedies. 

This Court has continued to recognize the broad nature 

of injunctions in cases decided after Porter and Mitchell. In 

California v. American Stores Co., 495 U.S. 271 (1990), for 

example, the Court held that an order requiring divestiture 
16 

of unlawfully acquired assets is a form of “injunctive relief ” 

under the Clayton Act. The Court explained that “[o]n its 

face,” a statute authorizing “injunctive relief ” was broad 

enough to encompass an order requiring a company to 

divest itself of illegally acquired assets. Id. at 281. The 

statute stated “no restrictions or exceptions to the forms of 

injunctive relief ” that could be awarded, but instead expressed “Congress’ intention that traditional principles of 

equity govern the grant of injunctive relief.” Ibid. The 

“plain text” of the statute therefore authorized divestiture. 

Id. at 282. As the dissent in this case correctly observed, 

“[a]n order of divestiture is almost identical to an order 

requiring equitable restitution: both require the wrongdoer 

to turn over property that was unlawfully obtained.” App., 

infra, 44a. The court of appeals’ decision, by contrast, 

cannot be squared with American Stores. 

2. When Congress passes a law, it is presumed to understand how courts have interpreted existing laws using 

the same or similar language. See Lorillard v. Pons, 434 

U.S. 575, 580-581 (1978). By the time Congress adopted 

Section 13(b) in 1973, this Court’s decisions in Porter and 

Mitchell were settled law. In addition, the Second Circuit 

had recently held that the authority to enter a “permanent 

or temporary injunction” in the securities laws authorized 

district courts to order the return of ill-gotten gains. See 

SEC v. Texas Gulf Sulphur, 446 F.2d 1301, 1307-1308 

(1971); SEC v. Manor Nursing, 458 F.2d 1082, 1103-1105 

(1972). Congress would have understood that a statute 

empowering district courts to enter “a permanent injunction” in Section 13(b) would be interpreted the same way. 

Further, when Congress amends a statute but chooses 

not to alter an existing statutory interpretation “then presumably the legislative intent has been correctly dis-
 

17 

cerned.” North Haven Bd. of Educ. v. Bell, 456 U.S. 512, 

535 (1982). In 1994, Congress undertook a thorough review 

of the FTC Act in connection with a reauthorization of the 

Commission. By then, multiple courts of appeals had recognized that Section 13(b) authorizes orders to return illgotten gains to consumers.5

 Congress amended Section 

13(b) to expand its venue provisions and authorize nationwide service of process, but did not alter the permanent 

injunction clause. See Pub. L. No. 103-312, § 10 (1994). 

That is “convincing support for the conclusion that Congress accepted and ratified the unanimous holdings of the 

Courts of Appeals.” Texas Dept. of Housing & Community 

Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 

2507, 2520 (2015). Indeed, the relevant Senate Report 

notes that Section 13(b) “authorizes the FTC to file suit to 

enjoin any violation of the FTC [Act]” and “obtain consumer redress,” and explained that the expansion of venue and 

service of process provisions were intended to “assist the 

FTC in its overall efforts.” S. Rep. No. 103-130, at 15-16 

(1993). 

By 2006, when still more courts of appeals had recognized that Section 13(b)’s authority encompasses monetary 

relief, Congress amended Section 5 to give the FTC authority over aspects of foreign commerce and stated in the 

statute that the new authority would include “[a]ll remedies available to the Commission . . . including restitution 

to domestic or foreign victims.” Pub. L. 109-455, § 3 (2006) 

(codified at 15 U.S.C. 45(a)(4)). By then, courts had ordered 

such relief under Section 13(b) hundreds of times, as Congress would have been well aware. 

5

 See H.N. Singer, 668 F.2d at 1112-1113; U.S. Oil & Gas, 748 F.2d at 

1432, 1434; Amy Travel Serv., 875 F.2d at 571-72; Sec. Rare Coin, 931 

F.2d at 1314-15. 
18 

In the decision below, however, the court of appeals 

summarily rejected those strong indications of legislative 

intent, thereby overriding the principles of statutory interpretation the Court has repeatedly set out. App., infra, 

19a-20a. That was error. 

3. The court of appeals further erred in its conclusion 

that this Court’s decision in Meghrig undermined Porter 

and Mitchell and that an order returning ill-gotten gains to 

consumers under Section 13(b) is “materially indistinguishable” from the relief sought in Meghrig. App., infra, 

32a-33a, 38a. 

Meghrig involved a lawsuit filed by a private landowner 

against a prior owner to recover the costs of environmental 

cleanup under a provision of RCRA that permits such a 

suit where contamination presents “an imminent and substantial endangerment to health or the environment.” 42 

U.S.C. 6972(a)(1)(B). In such cases, the statute authorizes 

courts to “restrain” persons who contributed to pollution or 

order them to “take such other action as may be necessary.” Meghrig, 516 U.S. at 484 (quoting 42 U.S.C. 6972(a)). 

When the case was filed, the landowner had already 

cleaned up the land, and the environmental contamination 

therefore presented no danger. The Court held that on 

those facts the statute “does not contemplate the award of 

past cleanup costs,” and that once the land had been remediated, the statute “quite clearly excludes waste that no 

longer presents such a danger.” Id. at 485-486, 488. 

Meghrig does not undermine Porter and Mitchell or 

control this case for several reasons. First, unlike statutes 

that authorize permanent injunctions without qualification 

(like Section 13(b) and those at issue in Porter and Mitchell), RCRA limits a court’s remedial authority to cases of 

imminent and substantial danger. The lawsuit in Meghrig 
19 

failed that statutory condition for suit because the land had 

already been decontaminated; the plaintiff sought “a remedy that compensates for past cleanup efforts.” Id. at 486. 

No similar situation existed in Porter and Mitchell or in 

this case, where the illegal scheme was ongoing at the time 

of suit. Indeed, Meghrig expressly declined to address 

whether “a private party could seek to obtain an injunction 

requiring another party to pay cleanup costs which arise 

after a RCRA citizen suit has been properly commenced.” 

Id. at 488. As the dissent in this case correctly noted, Meghrig “did not purport categorically to exclude from injunctive relief an order to make payments.” App., infra, 54a. 

Second, Meghrig involved a private plaintiff, not (as in 

Porter and Mitchell, and here) a government enforcement 

action. As the Third Circuit noted in rejecting the claim 

that Meghrig limits remedies in government enforcement 

cases, the money sought by the plaintiff “resembles traditional damages far more than . . . restitution.” United 

States v. Lane Labs-USA, Inc., 427 F.3d 219, 231 (3d Cir. 

2005). 

Third, RCRA’s citizen-suit injunctive provision is integrally tied into “the extensive remedial scheme” that might 

have been disrupted by allowing monetary relief for already-remediated land. Id. at 231-232. That was not the 

case in Porter or Mitchell. 

Finally, nothing in Meghrig purports to undermine the 

principles established in Porter. Although the Court did not 

accept a government argument that relied partly on Porter, 

see Meghrig, 516 U.S. at 487, it did not suggest that it was 

overruling or limiting the earlier decision. And since Meghrig was decided, the Court has relied upon Porter without qualification multiple times. In particular, in Kansas v. 

Nebraska, 135 S. Ct. 1042 (2015), the Court relied on Porter 
20 

in support of its authority to impose a monetary remedy 

under its equitable authority to apportion interstate water 

rights. Id. at 1052-1053, 1057. The Court noted that 

“[w]hen federal law is at issue and ‘the public interest is 

involved,’ a federal court’s ‘equitable powers assume an 

even broader and more flexible character than when only a 

private controversy is at stake.’” Id. at 1053 (quoting Porter, 328 U.S. at 398); see also United States v. Oakland 

Cannabis Buyers’ Co-Op., 532 U.S. 483, 496-497 (2001); 

Miller v. French, 530 U.S. 327, 340 (2000). 

In light of these factors, other courts of appeals have 

correctly held that “Meghrig did not overrule or limit 

Porter and Mitchell.” United States v. Rx Depot, Inc., 438 

F.3d 1052, 1057 n.3 (10th Cir. 2006); accord Lane Labs, 427 

F.3d at 232 (finding no “indication, either in Meghrig or 

since, that the Court has abandoned the holdings of Porter 

and Mitchell”). In this case, the court of appeals erred by 

relying on Meghrig rather than the directly controlling 

authorities of Porter and Mitchell. 

4. The court of appeals further erred in its conclusion 

that the remedies created by two other enforcement provisions of the FTC Act mean that injunctions under Section 

13(b) cannot order defendants to return money they took 

from consumers. App., infra, 15a-16a. 

The FTC Act gives the Commission multiple ways to 

enforce the laws under its authority: by rulemaking, 

through the administrative cease-and-desist process, and 

through direct enforcement actions in federal court. See 15 

U.S.C. 57a (rulemaking); 45(b) (administrative enforcement); 53(b) (direct action). The choice between those 

enforcement mechanisms lies “in the informed discretion of 

the administrative agency.” SEC v. Chenery Corp., 332 U.S. 

194, 203 (1947); see also NLRB v. Bell Aerospace Co., 416 
 

21 

U.S. 267, 294 (1974). The court of appeals misapplied that 

principle by effectively ruling that when Congress allows a 

type of relief under one statutory enforcement mechanism, 

it necessarily withholds such relief from other mechanisms. 

Section 5(l) of the Act, 15 U.S.C. 45(l), serves the sole 

purpose of supplementing the Commission’s administrative 

enforcement authority. It allows the Commission to sue for 

relief only against violators of a cease-and-desist order 

entered through the administrative process and provides 

remedies tailored for such violations, including civil penalties, “mandatory injunctions,” and “other and further equitable relief.” Ibid. The court of appeals erred in holding 

that without similar clauses Section 13(b) cannot support 

an order returning money to consumers. App., infra, 15a16a. That is the very approach this Court rejected in 

Mitchell when it held that a statute authorizing an injunction need not also provide for “other order[s]” to justify 

monetary relief. 361 U.S. at 296. 

The court of appeals was likewise wrong to hold that 

the monetary relief authorized by Section 19 limits the 

scope of Section 13(b). Congress stated expressly that the 

“[r]emedies provided” in Section 19 “are in addition to, and 

not in lieu of, any other remedy or right of action provided 

by State or Federal law. Nothing in [Section 19] shall be 

construed to affect any authority of the Commission under 

any other provision of law.” 15 U.S.C. 57b(e). Given that 

savings clause, Section 19 cannot properly be read to limit 

the remedies available under Section 13(b). 

Nor does reading Section 13(b) to authorize monetary 

remedies render the procedural requirements to obtain 

monetary relief under Section 19 (as described by the court 

of appeals, App., infra, 16a-17a) “largely pointless.” App., 

infra, 17a. To the contrary, the two sections support the 
 

22 

Commission’s prerogative to choose among the enforcement tools Congress has provided by balancing power 

between the courts and the Commission depending on 

which route the agency takes. When the Commission opts 

for direct action under Section 13(b) to end illegal practices 

and return money to consumers, it cedes to the court the 

determination whether there has been a violation. By contrast, if the Commission chooses to proceed under Section 

19, it retains plenary authority to determine that a particular practice should be prohibited (through rulemaking) or 

that particular conduct is illegal (through the administrative process), but in exchange for having to satisfy the 

procedural requirements of Section 19 before seeking 

judicial redress. The court of appeals’ decision upends that 

balanced remedial scheme by crippling Section 13(b) and 

requiring the Commission to obtain consumer redress only 

via Section 19. That was error. 

III. THE QUESTION PRESENTED MERITS PLENARY REVIEW 

AND THIS CASE IS THE IDEAL VEHICLE TO RESOLVE IT. 

The question presented here is also presented by the 

petitions in No. 19-508, AMG Capital Management v. FTC, 

and No. 19-507, Publishers Business Services v. FTC. In 

his response to the AMG petition, the Solicitor General 

acknowledges that the circuit split would “ordinarily warrant this Court’s review,” but recommends that the Court 

hold that petition based on a perceived “overlap” between 

the issue here and the question presented in No. 18-1501, 

Liu v. SEC (petition granted Nov. 1, 2019).6 The Court 

should not hold this petition but grant it and hold AMG 

6

 The Solicitor General’s brief in opposition in No. 19-507, Publishers 

Business Services, Inc. v. FTC, recommends that the petition be 

denied or in the alternative held for Liu. 
23 

pending resolution of this case. The question presented 

here is ripe for review, distinct from Liu, and unlikely to be 

answered by the Court’s disposition of that case. At the 

same time, the circuit split has a continuing adverse effect 

on the Commission’s ability to protect consumers, and this 

case presents an ideal vehicle to resolve it. 

1. The question presented in Liu is: “Whether the Securities and Exchange Commission may seek and obtain 

disgorgement from a court as ‘equitable relief ’ for a securities law violation even though this Court has determined 

that such disgorgement is a penalty.” That question follows 

from the Court’s recent decision that “SEC disgorgement 

constitutes a penalty” within the meaning of the 5-year 

statute of limitations for civil penalties, 28 U.S.C. 2462. 

Kokesh v. SEC, 137 S. Ct. 1635, 1638 (2017). Whether SEC 

disgorgement is properly considered an “equitable” remedy in light Kokesh will not resolve the question here, namely, whether the authority in Section 13(b) of the FTC Act to 

enter a “permanent injunction” authorizes an order to 

return to consumers money illegally taken from them. 

Indeed, the petitioners’ merits brief in Liu demonstrates that the issues presented there will not determine 

the outcome here. The brief ’s argument focuses on (1) the 

SEC’s statutory authority to obtain “disgorgement”; (2) 

the Court’s decision in Kokesh that SEC disgorgement is 

penal; (3) whether penal remedies are within the traditional scope of equity; and (4) the effect of holding in Liu’s 

favor. Liu Pet. Br. 15-19 & 35-40, 19-26, 26-33, 40-43. To 

make the case that SEC disgorgement orders are penal 

and not “equitable,” the brief takes pains to distinguish 

disgorgement orders that do not return money to victims 

from orders that provide restitution to injured parties. Id. 

at 6, 25, 30-31, 34 & n.16. 
 

 

24 

Unlike the SEC disgorgement orders at issue in Liu, 

neither this Court nor any other has held that orders including monetary relief under the FTC Act are punitive. 

Indeed, the judgments in Liu and this case starkly illustrate the differences between SEC disgorgement and the 

relief awarded under Section 13(b). The court in Liu ordered $26.7 million in disgorgement and did not require 

that the SEC use the money to compensate injured investors.7 Liu Pet. App. 62a. Here, by contrast, the judgment 

directs that the monetary relief be used for “consumer 

redress and any attendant expenses for the administration 

of any redress fund.”8 Such compensatory orders are typical in Section 13(b) cases; as discussed above, virtually all 

of the money the FTC recovers is repaid to injured consumers. 

Thus, no matter how the Court resolves its holding in 

Kokesh that SEC disgorgement is a penalty with the contention that relief under the securities laws must be “equitable,” the decision in Liu will not answer whether Section 

13(b) authorizes district courts to order monetary relief for 

compensatory purposes. 

2. That question has been definitively answered in eight 

circuits, with only the decision below diverging from the 

others.9 It is ripe for review now. The issue has been thor7

 That approach appears typical of SEC disgorgement cases. In 

Kokesh, this Court observed that “in many cases, SEC disgorgement is 

not compensatory” and that courts have required disgorgement “regardless of whether the disgorged funds will be paid to such investors 

as restitution.” 137 S. Ct. at 1644 (quoting SEC v. Fischbach Corp., 133 

F.3d 170, 176 (2d Cir. 1997)). 

8

 The order provides for disgorgement to the Treasury only as a last 

resort. App., infra, 127a. 

9

 The question is pending in one court with no binding precedent on 

the issue, see FTC v. Abbvie Inc., No. 18-2621 (3d Cir.). 
25 

oughly examined in multiple decisions in the courts of 

appeals for more than 30 years and is unlikely to benefit 

from further percolation. Because it will not be answered 

in Liu, holding this petition would serve no purpose other 

than delay while a serious impediment to Commission 

enforcement persists. 

Until the split is resolved, the FTC Act will mean one 

thing in the Seventh Circuit and something different in 

seven other circuits. In the Seventh Circuit, unlike the 

others, Section 13(b) will be useless to return money taken 

from consumers by scam artists like respondents. The 

circuit split will also cause unnecessary and timeconsuming litigation over forum: defendants have already 

sought to force enforcement cases against them into courts 

in the Seventh Circuit. The upshot is Commission resources spent on procedural fencing rather than enforcement action. Given the consequences to Commission enforcement and to the consumers it seeks to protect, the 

Court should not delay resolution of the issue, but should 

grant the petition in this case. 

If—following Liu—the Court were simply to remand 

this case (and AMG), the split and its consequences to 

consumers would likely persist for years with little prospect of righting itself. 

3. This case is an ideal vehicle to resolve the circuit 

split. The issue was squarely presented and dispositive in 

the court of appeals and there are no procedural or other 

impediments to its resolution in this Court. The same is not 

true in the other pending petitions. In Publishers Business 

Services, the petitioners waived the issue by failing to raise 

it properly below. See Brief in Opp’n, No. 19-507, at 4. 

Although the petition in AMG would otherwise present an 

appropriate vehicle, the Solicitor General’s view that the 
26 

case be held pending Liu makes this case the most suitable 

candidate for review. The best course would be to grant the 

Commission’s petition and hold AMG pending its resolution. 

CONCLUSION 

The petition should be granted. 

Respectfully submitted, 

ALDEN F. ABBOTT 

General Counsel 

JOEL MARCUS 

Deputy General Counsel 

for Litigation 

MICHAEL BERGMAN 

THEODORE (JACK) METZLER 

MATTHEW M. HOFFMAN 

Attorneys 

 FEDERAL TRADE COMMISSION 

DECEMBER 2019 
APPENDIX 
 

 

 

APPENDIX 

UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT 

——————— 

Nos. 18-2847 & 18-3310 

——————— 

FEDERAL TRADE COMMISSION, 

Plaintiff-Appellee, 

v. 

CREDIT BUREAU CENTER, LLC, 

AND MICHAEL BROWN, 

Defendants-Appellants. 

Decided August 21, 2019 

Before MANION, SYKES, and BRENNAN, Circuit Judges. 

SYKES, Circuit Judge. Michael Brown is the sole owner 

and operator of Credit Bureau Center, a credit-monitoring 

service. (We refer to both collectively as “Brown.”) Brown’s 

websites used what’s known as a “negative option feature” 

to attract customers. The websites offered a “free credit 

report and score” while obscuring a key detail in much 

smaller text: that applying for this “free” information 

automatically enrolled customers in an unspecified $29.94 

monthly “membership” subscription. The subscription was 

for Brown’s credit-monitoring service, but customers 

learned this information only when he sent them a letter 

after they were automatically enrolled. Brown’s most successful contractor capitalized on the confusion by posting 

Craigslist advertisements for fake rental properties and 

telling applicants to get a “free” credit score from Brown’s 

websites. 

1a 
2a 

The Federal Trade Commission eventually took notice. 

It sued Brown under section 13(b) of the Federal Trade 

Commission Act (“FTCA”), 15 U.S.C. § 53(b), alleging that 

the websites and referral system violated several consumer-protection statutes. The Commission sought a permanent injunction and restitution. Relevant here, the district 

judge found that Brown was a principal for his contractor’s 

fraudulent scheme and that the websites failed to meet 

certain disclosure requirements in the Restore Online 

Shopper Confidence Act (“ROSCA”). Id. § 8403. The judge 

entered a permanent injunction and ordered Brown to pay 

more than $5 million in restitution to the Commission. 

Brown now concedes liability as a principal for his contractor’s Craigslist scam. And he doesn’t dispute that his 

own websites failed to meet some of ROSCA’s disclosure 

requirements. So we have no trouble affirming the judge’s 

decision to hold him liable for both. We also affirm the 

issuance of a permanent injunction. Brown’s argument 

there rests on an erroneous understanding of the Eighth 

Amendment’s Excessive Fines Clause. 

But the restitution award is a different matter. By its 

terms, section 13(b) authorizes only restraining orders and 

injunctions. But the Commission has long viewed it as also 

authorizing awards of restitution. We endorsed that starkly 

atextual interpretation three decades ago in FTC v. Amy 

Travel Service, Inc., 875 F.2d 564, 571 (7th Cir. 1989). Since 

Amy Travel, the Supreme Court has clarified that courts 

must consider whether an implied equitable remedy is 

compatible with a statute’s express remedial scheme. See 

Meghrig v. KFC W., Inc., 516 U.S. 479, 487–88 (1996). And 

it has specifically instructed us not to assume that a statute 

with “elaborate enforcement provisions” implicitly authorizes other remedies. Id. at 487. 
 

3a 

Applying Meghrig’s instructions, we conclude that section 13(b)’s grant of authority to order injunctive relief 

does not implicitly authorize an award of restitution. Every 

reason Meghrig gave for not finding an implied monetary 

remedy applies here. Most notably, the FTCA has two 

detailed remedial provisions that expressly authorize restitution if the Commission follows certain procedures. Our 

current reading of section 13(b) allows the Commission to 

circumvent these elaborate enforcement provisions and 

seek restitution directly through an implied remedy. 

Stare decisis cannot justify adherence to an approach 

that Supreme Court precedent forecloses. Accordingly, we 

overrule Amy Travel and hold that section 13(b) does not 

authorize restitutionary relief.1

 Because the Commission 

brought this case under section 13(b), we vacate the restitution award. 

I. Background 

In January 2014 Brown contracted with Danny Pierce 

to direct customers to his credit-monitoring service. Brown 

gave Pierce several functionally identical websites with 

names like “eFreeScore.com” and “FreeCreditNation.com” 

to use for referrals. As their names suggest, these websites 

invited people to sign up for a “free credit report and 

score.” But signing up for the free score also automatically 

enrolled applicants in Brown’s credit-monitoring service, 

which charged a monthly subscription fee. 

Brown didn’t tell prospective customers about the credit-monitoring service. His websites almost entirely focused 

on the free credit score and report. Three disclaimers, 

buried in much smaller font, told consumers that applying 

1

 Because this opinion overrules circuit precedent and creates a circuit split, we circulated it under Circuit Rule 40(e) to all judges in 

active service. A majority did not favor rehearing en banc. 
4a 

for the free offer also enrolled them in an unspecified 

“membership” subscription that cost $29.94 each month. 

Customers later learned that this subscription was for 

credit monitoring when Brown sent them a letter after the 

automatic enrollment. 

Pierce did nothing to clear up this confusion. Indeed, 

it’s undisputed that his method for drumming up referrals 

was fraudulent. He subcontracted with Andrew Lloyd, who 

posted Craigslist advertisements for nonexistent rental 

properties at bargain prices. Lloyd invited prospective 

tenants to email the landlord. Posing as the “landlord,” he 

then responded and instructed them to obtain a credit 

report and score through one of Brown’s websites. But 

once applicants got this “free” information—and were 

automatically enrolled in the credit-monitoring service— 

Lloyd stopped replying to emails. 

The plan was effective. Pierce quickly became Brown’s 

most successful recruiter. Over the course of their relationship, Pierce referred more than 2.7 million customers to 

Brown, generating just over $6.8 million in revenue. Unsuspecting customers were understandably upset. They 

flooded Brown’s customer-service operators, questioning 

the monthly subscription charge. They complained that the 

Craigslist advertisements were scams. And many were 

blindsided by the fact that requesting a free credit score 

automatically enrolled them in a costly credit-monitoring 

service. Brown told his customer-service team to deny any 

involvement with Pierce’s operation. And although Brown 

typically agreed to cancel future charges, he often refused 

to issue refunds. He also instructed his representatives to 

offer reduced prices to retain customers. Some customers 

accepted the offer, but others told their credit-card compa-
5a 

nies to cancel Brown’s charges. Credit-card companies 

cancelled more than 10,000 of Brown’s charges. 

Consumers complained to the Commission, which 

opened an investigation. In January 2017 it sued Brown 

under section 13(b) of the FTCA seeking an injunction and 

restitution. The Commission alleged that the Craigslist 

advertisements violated the FTCA’s prohibition on “unfair 

or deceptive acts or practices.” 15 U.S.C. § 45(a). The suit 

also alleged that Brown’s websites violated the same provision of the FTCA, as well as ROSCA, id. § 8403; the Fair 

Credit Reporting Act (“FCRA”), id. § 1681j(g); and the 

Free Credit Reports Rule, 12 C.F.R. §§ 1022.130–.138. 

On the Commission’s motion, the judge issued a temporary injunction, froze Brown’s assets, and appointed a 

receiver to manage his company. Brown and the Commission later filed cross-motions for summary judgment. In 

addition to contesting liability, Brown argued that section 

13(b) doesn’t authorize an award of restitution and, alternatively, that it doesn’t authorize penalties or legal restitution (as opposed to equitable restitution, which requires 

tracing a plaintiff ’s entitlement to a particular account or 

fund). 

The judge ruled for the Commission across the board, 

holding that Brown violated the FTCA as a principal for 

the Craigslist scheme and that the websites violated the 

FTCA, ROSCA, the FCRA, and the Free Credit Reports 

Rule. The judge issued a permanent injunction that imposed extensive conditions on Brown’s continued involvement in the credit-monitoring industry and ordered Brown 

to pay $5,260,671.36 in restitution. He also denied Brown’s 

motion to unfreeze funds to pay his attorneys. 
6a 

II. Discussion 

Brown contests his liability, the permanent injunction, 

and the restitution award. Different standards of review 

apply. For liability, we review the summary judgment de 

novo, viewing the evidence in the light most favorable to 

Brown and drawing reasonable inferences in his favor. 

Holloway v. Soo Line R.R. Co., 916 F.3d 641, 643 (7th Cir. 

2019). We review the judge’s decision to enter a permanent 

injunction for abuse of discretion. SEC v. Yang, 795 F.3d 

674, 681 (7th Cir. 2015). Finally, Brown’s challenge to the 

restitution award raises legal questions, which we review 

de novo. Breneisen v. Motorola, Inc., 656 F.3d 701, 704 (7th 

Cir. 2011). 

A. Liability Issues 

The Commission sued under section 13(b) of the FTCA, 

which by its terms authorizes temporary restraining orders and permanent injunctions to enjoin violations of 

federal trade law. § 53(b)(1). To impose individual liability 

on the basis of a corporate practice, the Commission must 

prove (1) that the practice violated the FTCA; (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.” FTC v. World Media Brokers, 415 F.3d 

758, 764 (7th Cir. 2005). 

Based on the summary-judgment record, the judge 

held that Brown violated the FTCA as a principal for the 

Craigslist marketing scheme contrived by Pierce and 

Lloyd. He also held that Brown’s websites violated the 

FTCA, ROSCA, the FCRA, and the Free Credit Reports 

Rule. Finally, the judge concluded that Brown was individ-
7a 

ually liable for the violations because he owned and operated all aspects of his company. 

While Brown concedes liability for the Craigslist 

scheme, he challenges his liability for the website violations. He asserts that his websites contained no misrepresentations in violation of the FTCA and satisfied ROSCA’s 

disclosure requirements. He also argues that the Commission must enforce the FCRA and the Free Credit Reports 

Rule through an internal adjudication. See 15 U.S.C. 

§ 1681s(a)(1) (stating that FCRA violations “shall be subject to enforcement by the Federal Trade Commission 

under section 5(b) of the Federal Trade Commission Act”). 

It’s unnecessary to consider every theory of liability. 

Brown’s challenges to the injunction and restitution award 

do not turn on which statute his websites violated. And 

section 13(b) permits the Commission to seek relief against 

Brown for violating “any provision of law” it enforces. 

§ 53(b). 

So we start and end with ROSCA, which restricts the 

use of a “negative option feature” to sell goods or services 

on the Internet. § 8403. A negative-option feature is “a 

provision [in an offer] under which the customer’s silence 

or failure to take an affirmative action to reject goods or 

services or to cancel the agreement is interpreted by the 

seller as acceptance of the offer.” 16 C.F.R. § 310.2(w); see 

also § 8403 (incorporating this definition by reference). 

ROSCA prohibits this feature unless the seller “(1) provides text that clearly and conspicuously discloses all material terms of the transaction before obtaining the consumer’s billing information; (2) obtains a consumer’s express 

informed consent before charging the consumer . . . ; and 

(3) provides simple mechanisms for a consumer to stop 

recurring charges.” § 8403. ROSCA violations are “unfair 
8a 

or deceptive acts or practices” under the FTCA, so the 

Commission can use the FTCA’s enforcement regime 

against violators. Id. § 8404. 

There’s no dispute that Brown used a negative-option 

feature to enroll customers in his credit-monitoring service. The only question is whether he complied with 

ROSCA’s disclosure requirements. In the apt words of the 

district judge, Brown’s websites were “virtually devoid of 

any mention of the [credit-monitoring] service aside from 

the statement that the customer is to be billed for it.” 

Moreover, Brown concealed this incomplete disclosure 

behind more prominent language offering a free credit 

score and report. The judge determined that these partial 

and obscure disclosures did not “clearly and conspicuously 

disclose[ ] all material terms of the transaction” or ensure 

that customers gave “express informed consent.” 

§ 8403(1)–(2). 

Brown focuses on the conclusion that the disclosures 

weren’t conspicuous. He parses font sizes, details his websites’ color schemes, and takes a microscope to the Commission’s affidavits in an effort to highlight evidence that 

consumers read and understood the disclosures. But he 

gives only passing attention to the decisive point: His websites didn’t provide certain information that ROSCA requires—namely, that the subscription was for a creditmonitoring service. 

This oversight is fatal to Brown’s defense. Setting aside 

whether his disclosures satisfied the “clear and conspicuous” standard (and on that point we see nothing unsound in 

the judge’s ruling that they did not), Brown violated 

ROSCA if the disclosures failed to provide “all material 

terms of the transaction.” § 8403(1). The service Brown 

provided in exchange for the subscription is clearly a material term. See Material Term, BLACK’S LAW DICTIONARY 
9a 

(10th ed. 2014) (“A contractual provision dealing with a 

significant issue such as subject matter . . . or the work to 

be done.”). And the websites did not tell consumers that 

they were enrolling in a credit-monitoring service. Brown 

seeks refuge in the form letter that he delivered to new 

subscribers, which did provide this information. But 

ROSCA required Brown to disclose the material terms 

“before obtaining the consumer’s billing information.” 

§ 8403. Brown protests that he sent the letter “almost 

instantaneously” upon subscription. But almost instantaneously is still too late under ROSCA. 

Brown next contends that even if corporate liability is 

established, he should not be held personally liable. But it’s 

undisputed that he controlled the websites and was aware 

of their content. That’s enough to establish personal liability for the ROSCA violations. 

B. The Permanent Injunction 

The judge held that Brown’s conduct warranted a permanent injunction, applying our standard under the Securities and Exchange Act. See Yang, 795 F.3d at 681 (asking 

whether “there is a reasonable likelihood of future violations in order to obtain [injunctive] relief ”) (quotation 

marks omitted). The ensuing injunction imposes extensive 

requirements on Brown if he ever operates a creditmonitoring business again. 

We don’t need to decide whether our standard for an injunction under the Securities and Exchange Act also applies to section 13(b) because Brown’s challenge doesn’t 

turn on that question. His attack on the injunction rests 

largely on the Excessive Fines Clause. U.S. CONST. amend. 

VIII. He contends that the injunction is unconstitutionally 

harsh and disproportionate. But he skips a necessary step 

in the analysis—whether the injunction is a “fine” at all. 
10a 

It’s not. The Supreme Court has limited “fines” to “cash 

[or] in-kind payment[s] imposed by and payable to the 

government.” Dep’t of Hous. & Urban Dev. v. Rucker, 535 

U.S. 125, 136 n.6 (2002) (quotation marks omitted); see also 

Zamora-Mallari v. Mukasey, 514 F.3d 679, 695 (7th Cir. 

2008) (“The Board’s removal order . . . is not a ‘fine,’ and 

thus the Excessive Fine Clause of the Eighth Amendment 

does not apply.”). Because an injunction isn’t a fine, the 

permanent injunction doesn’t implicate the Excessive 

Fines Clause. 

Brown also offers an assortment of drive-by arguments, 

all of which are too undeveloped to establish an abuse of 

discretion. See Roger Whitmore’s Auto. Serv., Inc. v. Lake 

County, 424 F.3d 659, 664 n.2 (7th Cir. 2005) (“It is the 

parties’ duty to package, present, and support their arguments . . . .”). We affirm the permanent injunction. 

C. The Restitution Award 

The bulk of Brown’s appeal challenges the restitution 

order. His primary argument is that section 13(b) does not 

authorize an award of restitution. This is fundamentally a 

question of statutory interpretation, but it’s obscured by 

layers of caselaw, so bear with us while we untangle the 

knot. A brief overview of the FTCA’s remedial structure is 

helpful to a proper understanding of section 13(b), so we 

begin there. 

The FTCA gives the Commission several tools to enforce the Act’s prohibition on unfair or deceptive trade 

practices. Under its “cease and desist” power, the Commission adjudicates a case before an administrative law judge, 

who can issue an order prohibiting the respondent from 

engaging in the illegal conduct at issue. See 15 U.S.C. 

§ 45(b). This order becomes final if it survives administrative appeal and judicial review. Id. § 45(g). 
11a 

A final cease-and-desist order empowers the Commission to sue the violator for legal and equitable relief, but 

only if “a reasonable man would have known under the 

circumstances [that the conduct] was dishonest or fraudulent.” Id. § 57b(a)(2), (b). After it becomes final, the order 

also draws a line in the sand for both the respondent and 

anyone else who engages in the prohibited conduct. If the 

respondent later violates the order, the Commission can 

sue for civil penalties and any equitable relief “the court 

finds necessary.” Id. § 45(l). If anyone else engages in the 

prohibited conduct after the order becomes final, the 

Commission can seek civil penalties if it can prove that the 

violator acted with “actual knowledge” that his conduct was 

unlawful. Id. § 45(m)(1)(B). 

The Commission has two other enforcement mechanisms at its disposal. First, it can promulgate rules that 

“define with specificity acts or practices which are unfair or 

deceptive.” Id. § 57a(a)(1)(B). By preemptively resolving 

whether certain conduct violates the FTCA, rulemaking 

permits the Commission to pursue “quick enforcement” 

actions against violators. Nicholas R. Parrillo, Federal 

Agency Guidance and the Power to Bind: An Empirical 

Study of Agencies and Industries, 36 YALE J. ON REG. 165, 

225–26 (2019). Once the Commission promulgates a rule, it 

can seek legal and equitable remedies, including restitution, from violators. See 15 U.S.C. § 57b(a)(1), (b). And if it 

establishes that a violator had “actual knowledge or 

knowledge fairly implied on the basis of objective circumstances” that his conduct violated a rule, the Commission 

can also pursue civil penalties. Id. § 45(m)(1)(A). 

The Commission’s remaining enforcement mechanism 

is different. Under section 13(b) of the FTCA, the Commission can forego any administrative adjudication or rule-
12a 

making and directly pursue a temporary restraining order 

and a preliminary or permanent injunction in federal court. 

§ 53(b). As noted, the Commission sued Brown under this 

provision. 

1. Section 13(b) 

The restitution order against Brown rests on section 

13(b)’s permanent-injunction provision, which states that 

“in proper cases the Commission may seek, and after 

proper proof, the court may issue, a permanent injunction.” 

Id. Brown’s straightforward argument is that section 13(b) 

doesn’t authorize restitution because it doesn’t mention 

restitution. 

We start with the obvious: Restitution isn’t an injunction. “Injunction” is of course a broad term. See Injunction, BLACK’S LAW DICTIONARY (10th ed. 2014) (“A court 

order commanding or preventing an action.”). But statutory authorizations for injunctions don’t encompass other 

discrete forms of equitable relief like restitution. See, e.g., 

Meghrig, 516 U.S. at 484 (“[N]either [a mandatory or prohibitory injunction] contemplates . . . equitable restitution.”) (quotation marks omitted); Owner-Operator Indep. 

Drivers Ass’n v. Landstar Sys., Inc., 622 F.3d 1307, 1324 

(11th Cir. 2010) (“Injunctive relief constitutes a distinct 

type of equitable relief; it is not an umbrella term that 

encompasses restitution or disgorgement.”); see also WalMart Stores, Inc. v. Dukes, 564 U.S. 338, 365 (2011) (holding that an equitable order for backpay isn’t an injunction); 

Nken v. Holder, 556 U.S. 418, 430 (2009) (“Whether [a 

deportation stay] might technically be called an injunction 

is beside the point; that is not the label by which it is generally known.”). 

The Commission doesn’t seriously argue otherwise. It 

instead contends that section 13(b) implicitly authorizes 
13a 

restitution. We endorsed that reading in Amy Travel, 875 

F.2d at 571, which Brown asks us to overturn. We’ll discuss 

Amy Travel in a moment, but we begin with a closer look 

at the FTCA itself. If the Commission’s reading is correct, 

there’s no need to reconsider our precedent. 

Section 13(b) provides: 

Whenever the Commission has reason to believe-- 

(1) that any person, partnership, or corporation is 

violating, or is about to violate, any provision of law 

enforced by the Federal Trade Commission, and 

(2) that the enjoining thereof pending the issuance 

of a complaint by the Commission and until such 

complaint is dismissed by the Commission or set 

aside by the court on review, or until the order of 

the Commission made thereon has become final, 

would be in the interest of the public-- 

the Commission . . . may bring suit in a district 

court of the United States to enjoin any such act or 

practice. Upon a proper showing that, weighing the 

equities and considering the Commission’s likelihood of ultimate success, such action would be in the 

public interest, and after notice to the defendant, a 

temporary restraining order or a preliminary injunction may be granted without bond: Provided, 

however, That if a complaint is not filed within such 

period (not exceeding 20 days) as may be specified 

by the court after issuance of the temporary restraining order or preliminary injunction, the order 

or injunction shall be dissolved by the court and be 

of no further force and effect: Provided further, 

That in proper cases the Commission may seek, and 
 

14a 

after proper proof, the court may issue, a permanent injunction. . . . 

An implied restitution remedy doesn’t sit comfortably 

with the text of section 13(b). Consider its requirement 

that the defendant must be “violating” or “about to violate” 

the law. Requiring ongoing or imminent harm matches the 

forward-facing nature of injunctions. See 11A CHARLES 

ALAN WRIGHT ET AL., FEDERAL PRACTICE AND 

PROCEDURE § 2942, at 47 (3d ed. 2013) (“[I]njunctive relief 

looks to the future and is designed to deter . . . .”). Conversely, restitution is a remedy for past actions. See 1 DAN. 

B. DOBBS, LAW OF REMEDIES § 4.1(1), at 551 (2d ed. 1993) 

(“Restitution is a return or restoration of what the defendant has gained in a transaction.”). Beyond the conceptual 

tension, this requirement raises an illogical implication: It 

would condition the Commission’s ability to secure restitution for past conduct on the existence of ongoing or imminent unlawful conduct. 

Section 13(b)’s second requirement—that the Commission must reasonably believe that enjoining an ongoing or 

imminent violation would be in the public interest—raises a 

similar problem. The public interest in stopping or preventing a violation is distinct from the public interest in 

remedying a past harm. And yet the Commission’s reading 

ties restitution to this inapposite inquiry. 

The rest of section 13(b) is likewise keyed to injunctions, not other forms of equitable relief. For example, the 

statute conditions the district court’s authority to issue a 

temporary restraining order or preliminary injunction on 

injunction-specific requirements—such as “weighing the 

equities and considering the Commission’s likelihood of 

ultimate success”—and dissolves the order or injunction 

within 20 days if the Commission doesn’t issue an adminis-
15a 

trative complaint. § 53(b). These demands don’t apply to 

equitable restitution, which has its own preconditions. See 

Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 

204, 212–15 (2002). 

True, this appeal concerns section 13(b)’s permanentinjunction provision, not the provision governing temporary restraining orders and preliminary injunctions, which 

is tied to the subsequent initiation of an administrative 

proceeding. And we have held that at least some of section 

13(b)’s requirements don’t apply to permanent injunctions. 

See United States v. JS & A Grp., 716 F.2d 451, 456–57 (7th 

Cir. 1983) (holding that the Commission can seek a permanent injunction without initiating an internal adjudication). 

But see FTC v. Shire ViroPharma, Inc., 917 F.3d 147, 156 

(3d Cir. 2019) (requiring the Commission to allege an ongoing or imminent violation to receive a permanent injunction). But that’s beside the point. Even if some of section 

13(b)’s requirements do not apply to permanent injunctions, they inform the meaning of “injunction.” We see no 

contextual support for giving vastly different meanings to 

section 13(b)’s two uses of the word “injunction.” See Hall 

v. United States, 566 U.S. 506, 519 (2012) (“At bottom, 

identical words and phrases within the same statute should 

normally be given the same meaning.”) (quotation marks 

omitted). And in any event, we haven’t drawn an interpretive distinction in the past. See FTC v. Elders Grain, Inc., 

868 F.2d 901, 907 (7th Cir. 1989) (holding that section 

13(b)’s preliminary-injunction provision also authorizes 

implied equitable relief). 

The FTCA’s two other enforcement provisions amplify 

the poor fit between section 13(b) and restitution. Both use 

more than the word “injunction” to authorize other forms 

of equitable relief. As discussed, when a person violates a 
16a 

final cease-and-desist order, the district courts are empowered to “grant mandatory injunctions and such other and 

further equitable relief as they deem appropriate.” § 45(l) 

(emphasis added). And when someone engages in conduct 

prohibited by a rule, the FTCA authorizes “such relief as 

the court finds necessary . . . , [including] the refund of 

money or return of property.” § 57b(b) (emphasis added). 

The absence of similar language in section 13(b) is conspicuous. “[W]here Congress includes particular language 

in one section of a statute but omits it in another section of 

the same Act, it is generally presumed that Congress acts 

intentionally and purposely in the disparate inclusion or 

exclusion.” Nken, 556 U.S. at 430 (quotation marks omitted). This instruction applies with particular force here, 

where Congress simultaneously expanded § 45(l) to allow 

for “other and further equitable relief ” and enacted section 

13(b) without this language. See Trans-Alaska Pipeline 

Authorization Act, Pub. L. No. 93-153, § 408, 87 Stat. 576, 

591 (1973). Moreover, Congress expressly approved restitution as a remedy under § 57b(b) two years after enacting 

section 13(b). See Magnuson-Moss Warranty Act, Pub. L. 

No. 93-637, § 206, 88 Stat. 2183, 2202 (1975). If section 13(b) 

permitted restitution as a general matter, Congress would 

have had no reason to enact § 57b, which authorizes restitution under narrower circumstances. 

Remedial scope isn’t the only difference between section 13(b) and the FTCA’s other enforcement mechanisms. 

The latter procedures also impose a detailed framework 

that the Commission must follow before obtaining a restitution order. This framework counterbalances the FTCA’s 

amorphous “unfair or deceptive practices” standard by 

requiring the Commission to give defendants fair notice, 

either through cease-and-desist orders or rules that “de-
 

17a 

fine with specificity” prohibited acts. §§ 45(b); 57a(a)(1). 

The Commission can bypass these notice requirements 

only if it obtains a cease-and-desist order against a violator, 

brings a suit in court, and then establishes that the prohibited practice “is one which a reasonable man would have 

known under the circumstances was dishonest or fraudulent.” § 57b(a)(2). Finally, the FTCA imposes a three-year 

statute of limitations on bringing actions against most 

violators. § 57b(d). 

Section 13(b) doesn’t offer any of these protections. And 

yet the Commission contends that it provides an unqualified right to the very remedies that the FTCA’s other enforcement provisions give with heavy qualification. Reading an implied restitution remedy into section 13(b) makes 

these other provisions largely pointless. Without a clear 

textual signal, we cannot presume that Congress implicitly 

made such a consequential shift in policy. See Whitman v. 

Am. Trucking Ass’ns, Inc., 531 U.S. 457, 468 (2001) (“Congress . . . does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions . . . .”). 

The tensions we’ve just discussed dissipate if we read 

section 13(b) to mean what it says: The remedy is limited to 

injunctive relief. In fact, giving section 13(b) its plain meaning harmonizes the three enforcement mechanisms. The 

FTCA gives the Commission a pair of backward-facing 

methods to obtain monetary relief for past injury. Its 

cease-and-desist power targets individual violations. See 

§ 45(b). And its rule-enforcement authority under 

§ 57b(a)(1) allows it to more efficiently address widespread 

unfair or deceptive practices. See Parrillo, supra, at 225–26. 

Section 13(b) serves a different, forward-facing role: 

enjoining ongoing and imminent future violations. This 

authority aligns with the predicate requirements it impos-
18a 

es—notably, a reasonable belief that a violation is ongoing 

or imminent and that stopping the violation is in the public 

interest. § 53(b). It also explains the lack of procedural 

protections. As Congress reported when enacting section 

13(b), the Commission’s existing enforcement processes 

couldn’t quickly address ongoing or imminent violations. 

See § 408(a)(1), 87 Stat. 576, 591 (finding that the Commission had “been restricted and hampered because of inadequate legal authority . . . to seek preliminary injunctive 

relief to avoid unfair competitive practices”) (emphasis 

added). Section 13(b) corrected this problem, providing an 

expedited pathway to injunctive relief. See id. § 408(b) 

(noting that the “purpose of [the] act” was to give the 

Commission “the requisite authority to insure prompt 

enforcement of the laws [it] administers by granting statutory authority . . . to seek preliminary injunctive relief ”) 

(emphasis added). 

The Commission’s argument to the contrary rests almost entirely on the saving clause in § 57b(e): “Remedies 

provided in this section are in addition to, and not in lieu of, 

any other remedy or right of action provided by State or 

Federal law. Nothing in this section shall be construed to 

affect any authority of the Commission under any other 

provision of law.” According to the Commission, § 57b(e) 

explains away the tensions that its reading of section 13(b) 

otherwise creates. 

We disagree for two reasons. To start, the Commission’s understanding of the saving clause runs against 

more than a century of interpretive practice. The Supreme 

Court has long instructed that acts “cannot be held to 

destroy [themselves]” through saving clauses. Tex. & Pac. 

Ry. Co. v. Abilene Cotton Oil Co., 204 U.S. 426, 446 (1907); 

accord Adams Express Co. v. Croninger, 226 U.S. 491, 507 
19a 

(1913); Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 299 

(1976); Am. Tel. & Tel. Co. v. Cent. Office Tel., Inc., 524 

U.S. 214, 228 (1998). Put differently, we cannot read a saving clause to “allow specific provisions of the statute that 

contains it to be nullified.” PMC, Inc. v. Sherwin-Williams 

Co., 151 F.3d 610, 618 (7th Cir. 1998). This principle extends 

to claims that a particular statutory provision implicitly 

authorizes new remedies. See Middlesex Cty. Sewerage 

Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 15–16 

(1981) (“It is doubtful that the phrase ‘any statute’ [in a 

saving clause] includes the very statute in which this 

statement was contained.”). As we’ve explained, the Commission’s reading of section 13(b) effectively nullifies § 57b. 

We cannot read § 57b(e) to authorize that self-defeating 

effect. 

And even if the Commission’s reading of the saving 

clause were correct, we couldn’t infer a right to restitution 

in section 13(b). The saving clause preserves only those 

remedies that exist. It does not inform the question whether 

section 13(b) contains an implied power to award restitution. 

The Commission also suggests that Congress “ratified” 

an implied section 13(b) restitution remedy in its 1993 and 

2006 amendments to the FTCA. We disagree. The 1993 

amendment reworked section 13(b)’s venue and service-ofprocess provisions but didn’t alter its remedial scope. The 

2006 amendment fares no better as a prop for the Commission’s argument. It simply empowered the Commission to 

use “[a]ll remedies available to [it] with respect to unfair 

and deceptive acts or practices . . . , including restitution,” 

when prosecuting certain violations in foreign commerce. 

§ 45(a)(4)(B). The Commission contends that the use of 

“restitution” in this provision refers to an implied restitution remedy in section 13(b). But the FTCA expressly 
20a 

authorizes restitution through § 45(l) and § 57b(b). So the 

2006 amendment says nothing about the Commission’s 

authority to seek that remedy under section 13(b). 

In short, nothing in the text or structure of the FTCA 

supports an implied right to restitution in section 13(b), 

which by its terms authorizes only injunctions. Unsurprisingly, the Commission wagers nearly all of its case on stare 

decisis rather than the plain meaning of section 13(b). So 

we turn to that question. 

2. The Road to Amy Travel 

The Commission correctly observes that we addressed 

a materially identical challenge to the scope of section 13(b) 

in Amy Travel, 875 F.2d 564. Brown in turn invites us to 

revisit that decision in light of intervening Supreme Court 

decisions. We of course can do so. “Although we must give 

considerable weight to our prior decisions, we are not 

bound by them absolutely and may overturn circuit precedent for compelling reasons.” Russ v. Watts, 414 F.3d 783, 

788 (7th Cir. 2005). An intervening Supreme Court decision 

that displaces the rationale of our precedent is one such 

reason. See Glaser v. Wound Care Consultants, Inc., 570 

F.3d 907, 915 (7th Cir. 2009). 

Brown’s invitation implicates a line of Supreme Court 

precedents long predating Amy Travel. The prevailing 

interpretation of section 13(b) developed in the shadow of 

two decisions that took a capacious view of implied remedies: Porter v. Warner Holding Co., 328 U.S. 395 (1946), 

and Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288 

(1960). To understand Amy Travel, we must begin with them. 

Porter considered section 205(a) of the Emergency 

Price Control Act of 1942, which limited the rent that certain landlords could collect from their tenants. The act 

empowered district courts to issue a “permanent or tempo-
21a 

rary injunction, restraining order, or other order” against 

persons who collect rents above its limits. Porter, 328 U.S. 

at 397. The Court held that section 205(a) authorizes restitution, offering this reasoning: 

Unless otherwise provided by statute, all the inherent equitable powers of the District Court are available for the proper and complete exercise of [its equitable] jurisdiction. . . . Unless a statute in so many 

words, or by a necessary and inescapable inference, 

restricts the court’s jurisdiction in equity, the full 

scope of that jurisdiction is to be recognized and applied. The great principles of equity, securing complete justice, should not be yielded to light inferences, or doubtful construction. 

Id. at 398 (citations and quotation marks omitted). 

Porter later clarified that implied remedies must be 

“consistent with the statutory language and policy, the 

legislative background and the public interest.” Id. at 403; 

see also id. at 400 (“In framing such remedies under 

§ 205(a), courts must act primarily to effectuate the policy 

of the Emergency Price Control Act and to protect the 

public interest while giving necessary respect to the private interests involved.”). In short, Porter adopted a presumption in favor of implying equitable remedies that 

accord with statutory purpose. But it also recognized that 

an express statement or a “necessary and inescapable 

inference” to the contrary could rebut this presumption. 

Id. at 398. 

Returning to the Price Control Act, the Court held that 

restitution was a proper “other order” under section 

205(a). Id. at 399. It offered two justifications. First, restitution could be an “equitable adjunct to an injunction.” Id. 

Second, restitution advanced the purpose of the statute. 
22a 

See id. at 400 (“[T]he statutory policy of preventing inflation is plainly advanced if prices or rents which have been 

collected in the past are reduced to their legal maximums.”). Still, the Court found that an “inescapable inference” foreclosed one particular remedy. The statute’s separate right of action for damages “provide[d] an exclusive 

remedy relative to damages.” Id. at 401. But “save [this] 

one aspect,” the statute invoked “the broad equitable jurisdiction that inheres in courts.” Id. at 403. 

In Mitchell the Court applied Porter to section 17 of the 

Fair Labor Standards Act (“FLSA”), which gave district 

courts the jurisdiction to “restrain violations” of the statutory prohibition on firing employees for reporting workplace violations. 361 U.S. at 289. After quoting Porter’s 

broad language about equitable remedies, Mitchell reiterated that implied remedies must fit with the statutory 

purpose: “When Congress entrusts to an equity court the 

enforcement of prohibitions contained in a regulatory 

enactment, it must be taken to have acted cognizant of the 

historic power of equity to provide complete relief in light 

of the statutory purposes.” Id. at 291–92. 

Applying Porter’s presumption, the Court drew on its 

understanding of the FLSA’s purpose, which was to 

achieve “minimum labor standards” by using worker complaints as a private enforcement mechanism. Id. at 292. 

The Court reasoned that restitution furthered that purpose. Without it, the “fear of economic retaliation” would 

stifle worker complaints. Id. 

Mitchell then assessed whether anything in the FLSA 

precluded restitution as an implied remedy. The defendants 

pointed to the statute’s ban on awarding unpaid minimum 

wages and overtime compensation as one such provision, 

but the Court disagreed. It found “no indication in the 
 

 

 

 

23a 

language of the [ban], or in the legislative history, that 

Congress intended [it] to have a wider effect.” Id. at 294. 

Porter and Mitchell were typical of their era: The Court 

would resolve ambiguities by identifying a statute’s purpose and “deducing the result most consonant with that 

purpose.” William N. Eskridge Jr., Politics Without Romance: Implications of Public Choice Theory for Statutory Interpretation, 74 VA. L. REV. 275, 282 (1988); see also 

John F. Manning, Foreword: The Means of Constitutional 

Power, 128 HARV. L. REV. 1, 16–17 (2014) (“However clearly 

Congress framed its statutes, the Court could rework them 

to fit with the background policies that inspired them.”). 

Using this interpretive approach, the Court assumed that 

the judiciary could freely craft remedies to fully enforce 

whatever rights Congress had recognized. See Frank H. 

Easterbrook, Foreword: The Court and the Economic 

System, 98 HARV. L. REV. 4, 45–51 (1983). As the Court 

would proclaim four years after Mitchell, “it is the duty of 

the courts to be alert to provide such remedies as are necessary to make effective the congressional purpose.” J. I. 

Case Co. v. Borak, 377 U.S. 426, 433 (1964). 

* * * 

Lower-court interpretations of section 13(b) built on 

Porter and Mitchell. The trail starts with FTC v. H. N. 

Singer, Inc., 668 F.2d 1107 (9th Cir. 1982). There the Ninth 

Circuit held that section 13(b)’s permanent-injunction 

provision implicitly authorizes preliminary injunctions and 

asset freezes.2 Id. at 1113. While its analysis was cursory, 

2

 Shortly before Singer, the Fifth Circuit held that section 13(b)’s 

preliminary-injunction provision implicitly authorizes asset freezes. 

See FTC v. Sw. Sunsites, Inc., 665 F.2d 711, 718 (5th Cir. 1982). But its 

holding appeared to preclude the possibility of restitution in section 

13(b), pointing instead to § 57b for monetary remedies. Id. at 719 
 

 

24a 

Singer channeled Porter and Mitchell. The court held that 

preliminary injunctions and asset freezes advanced section 

13(b)’s purpose by ensuring that assets were available at 

the end of the enforcement process. Singer also rejected 

the defendant’s claim that the express equitable remedies 

in § 57b foreclosed implied remedies in section 13(b), pointing to the saving clause in § 57b(e). 

Singer sparked a line of appellate cases holding that 

section 13(b) is a broad grant of equitable authority. The 

Eleventh Circuit followed Singer’s lead two years later. 

After quoting Porter’s language on implied remedies, the 

court concluded that it “agree[d] with Singer’s interpretation of [section] 13(b)” and without further discussion held 

that section 13(b) authorizes asset freezes. FTC v. U.S. Oil & 

Gas Corp., 748 F.2d 1431, 1434 (11th Cir. 1984) (per curiam). 

Our decision in FTC v. World Travel Vacation Brokers, 

Inc., 861 F.2d 1020 (7th Cir. 1988), was next. There, the 

defendant passingly suggested that section 13(b)’s permanent-injunction provision does not implicitly authorize 

preliminary injunctions. (Recall that the statute’s express 

authorization for temporary restraining orders and preliminary injunctions is tied to the eventual initiation of an 

administrative proceeding.) We held that the defendant 

waived the argument, but we discussed the issue anyway 

“in order to satisfactorily explain our disposition of . . . 

other issues.” Id. at 1026. Because it was dicta, our reasoning was understandably brief. We simply quoted language 

from Singer and noted that we had “no reason to disagree 

(“[T]he exhortation in [Mitchell] to preserve the possibility of complete 

relief . . . makes it appropriate to consider that the final, complete relief 

in this case may entail consumer redress through a [§ 57b] proceeding.”). Predictably, no circuit has materially relied on Southwest Sunsites to support an implied restitution award. 
25a 

with the conclusion of our colleagues of the Ninth and 

Eleventh Circuits that the authority to grant permanent 

injunctive relief also includes the authority to grant interlocutory relief.” Id. Other than distinguishing a prior decision, we did not discuss the matter further. 

Two months after World Travel, we concluded in Elders 

Grain that section 13(b)’s preliminary-injunction provision 

implicitly authorizes rescission. 868 F.2d at 907. Perhaps 

because the parties didn’t dispute the issue, our analysis 

was again cursory. But it was highly consequential. We 

articulated a new standard for inferring equitable remedies: “[T]he statutory grant of the power to issue a preliminary injunction carries with it the power to issue whatever 

ancillary equitable relief is necessary to the effective exercise of the granted power.” Id. Notably absent was any 

inquiry into whether an implied remedy was compatible 

with the statutory text and structure or whether Congress 

precluded the implied remedy. We instead would permit 

whatever implied remedies furthered the exercise of the 

express remedy. 

The effect of this reasoning was evident in our justification for inferring the power to order rescission. We simply 

restated the facts of the case, which involved a transaction 

timed to avoid the Commission’s review, and observed that 

“[t]o reward these tactics by holding that a district court 

has no power under section 13(b) to rescind a consummated transaction would go far toward rendering the statute a 

dead letter.” Id. 

We extended Elders Grain to the permanent-injunction 

provision three months later in Amy Travel. The district 

court had ordered the defendants to pay more than $6 million 

in restitution to the Commission. Amy Travel, 875 F.2d at 

570. The defendants argued on appeal that nothing in sec-
26a 

tion 13(b) authorized monetary relief. We disagreed, explaining that our then-recent decisions in World Travel and 

Elders Grain “thwarted” the defendants’ arguments. Id. at 

571. In particular, we said that the reasoning in Elders 

Grain applied “with equal force” to the permanentinjunction provision. We adopted that expansive formulation, holding that section 13(b)’s “statutory grant of authority to the district court to issue permanent injunctions 

includes the power to order any ancillary equitable relief 

necessary to effectuate the exercise of the granted powers.” Id. at 572. But unlike Elders Grain, we never addressed how an award of restitution was “necessary to 

effectuate the exercise” of the power to issue an injunction. 

We simply noted that restitution was a “proper form[ ] of 

ancillary relief.” Id. at 571. 

Our approach in Amy Travel became the standard. 

Some circuits held, on a similarly brief analysis, that section 13(b) categorically authorizes the court’s “full equitable powers,” including restitution. See FTC v. Gem Merch. 

Corp., 87 F.3d 466, 470 (11th Cir. 1996) (emphasis added); 

FTC v. Sec. Rare Coin & Bullion Corp., 931 F.2d 1312, 

1314–15 (8th Cir. 1991). Others simply cited Amy Travel or 

other decisions to reach the same conclusion. See FTC v. 

Bronson Partners, LLC, 654 F.3d 359, 365 (2d Cir. 2011); 

FTC v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1203 (10th 

Cir. 2005); FTC v. Pantron I. Corp., 33 F.3d 1088, 1102 (9th 

Cir. 1994); see also FTC v. Ross, 743 F.3d 886, 891 (4th Cir. 

2014) (conceding that “arguments about how the structure, 

history, and purpose of the [FTCA] weigh against the conclusion that district courts have the authority to award 

consumer redress . . . are not entirely unpersuasive” but 

allowing restitution because of Porter, Mitchell, and uniform circuit practice). 
 

 

 

27a 

To be sure, these decisions have attracted some judicial 

skepticism. See Shire ViroPharma, 917 F.3d at 156, 161 

n.19 (declining to decide whether section 13(b) authorizes 

monetary relief but concluding that it wasn’t “meant to 

duplicate [§ 45(b)], which already prohibits past conduct”); 

FTC v. AMG Capital Mgmt., LLC, 910 F.3d 417, 429 (9th 

Cir. 2018) (O’Scannlain, J., concurring) (disagreeing with 

the prevailing interpretation). But the view that section 

13(b) implicitly authorizes restitution has largely escaped 

critical examination.3 

We have affirmed restitution awards under section 

13(b) three times since Amy Travel. See United States v. 

Tankersley, 96 F. App’x 419, 422 (7th Cir. 2004); FTC v. 

Think Achievement Corp., 312 F.3d 259, 262 (7th Cir. 2002); 

FTC v. Febre, 128 F.3d 530, 534 (7th Cir. 1997). But Brown 

is the first litigant to question our precedent. 

3. Modern Implied-Remedies Jurisprudence 

The Supreme Court’s understanding of implied remedies evolved after Porter and Mitchell. Though the Court 

continued to presume that courts could “use any available 

remedy to afford full relief ” when a party had a general 

statutory cause of action, over time it began to emphasize 

3

 Chief Judge Wood’s dissent from the denial of rehearing en banc 

relies heavily on FTC v. Bronson Partners, LLC, 654 F.3d 359 (2d Cir. 

2011), but there the Second Circuit summarily followed the lead of 

other circuits in reading section 13(b) to include an implied power to 

order restitution. Id. at 365. The court quickly moved on to, and thoroughly considered, a wholly different question: whether the implied 

restitution remedy is equitable or legal. The lengthy passages quoted 

in the chief judge’s dissent relate to that second-order question. Moreover, Bronson rejected the view that the plain meaning of “injunction” 

encompasses restitution. Id. at 367 (approving restitution because 

“section 13(b) does not limit the district court to awarding only injunctions”) (emphasis added). 
28a 

that this presumption “yields where necessary to carry out 

the intent of Congress or to avoid frustrating the purposes 

of the statute involved.” Gebser v. Lago Vista Indep. Sch. 

Dist., 524 U.S. 274, 284 (1998) (quoting Guardians Ass’n v. 

Civil Serv. Comm’n, 463 U.S. 582, 595 (1983) (White, J., 

op.)); see also California v. Sierra Club, 451 U.S. 287, 297 

(1981) (“The federal judiciary will not engraft a remedy on 

a statute, no matter how salutary, that Congress did not 

intend to provide.”). In particular, the Court now recognizes the importance of Congress’s choice to specify forms of 

relief. See, e.g., Franklin v. Gwinnett Cty. Pub. Sch., 503 

U.S. 60, 69 n.6 (1992) (noting that the presumption in favor 

of relief doesn’t apply “under a statute that expressly enumerated the remedies available to plaintiffs”); see also 

Karahalios v. Nat’l Fed’n of Fed. Emps., 489 U.S. 527, 533 

(1989) (“It is . . . an elemental canon of statutory construction that where a statute expressly provides a remedy, 

courts must be especially reluctant to provide additional 

remedies.”) (quotation marks omitted). 

A prominent example is ERISA. Because Congress has 

established a comprehensive remedial scheme for plaintiffs 

to enforce their rights under an employee-benefits plan, 

the Court has refused to infer additional extracontractual 

damages remedies. See Mass. Mut. Life Ins. Co. v. Russell, 

473 U.S. 134, 146 (1985) (“The presumption that a remedy 

was deliberately omitted from a statute is strongest when 

Congress has enacted a comprehensive legislative scheme 

including an integrated system of procedures for enforcement.”) (quotation marks omitted). And where two environmental-protection statutes provide private rights of 

action for injunctive relief but require plaintiffs to notify 

defendants 60 days before suing, the Court has refused to 

infer a damages remedy or allow plaintiffs to obtain an 
29a 

injunction without the requisite notice. See Nat’l Sea 

Clammers Ass’n, 453 U.S. at 15 (“In the absence of strong 

indicia of a contrary congressional intent, we are compelled 

to conclude that Congress provided precisely the remedies 

it considered appropriate.”). 

These decisions collided with Porter and Mitchell in 

Meghrig v. KFC Western, Inc., 516 U.S. 479 (1996). Because Brown’s challenge centers on Meghrig, it warrants 

close review. There the Court addressed the Resource 

Conservation and Recovery Act of 1976 (“RCRA”), which 

permits private parties to sue handlers of “solid or hazardous waste which may present an imminent and substantial 

endangerment to health or the environment.” 42 U.S.C. 

§ 6972(a)(1)(B). The statute authorizes district courts “to 

restrain” any person who contributes to handling the 

waste, “to order such person to take such other action as 

may be necessary, or both.” § 6972(a). The question in 

Meghrig was whether § 6972(a) also allowed plaintiffs to 

recover waste-cleanup costs as restitution. 

The Supreme Court refused to find an implied restitutionary remedy. “Under a plain reading of this remedial 

scheme,” the Court explained, plaintiffs could receive “a 

mandatory injunction, i.e., one that orders a responsible 

party to ‘take action’ by attending to the cleanup and proper disposal of toxic waste, or a prohibitory injunction, i.e., 

one that ‘restrains’ a responsible party from further violating [the] RCRA.” Meghrig, 516 U.S. at 484. But neither of 

these forward-facing remedies “contemplates the award of 

past cleanup costs, whether these are denominated ‘damages’ or ‘equitable restitution.’ ” Id. 

The Court reinforced its holding by comparing the 

RCRA to the Comprehensive Environmental Response, 

Compensation, and Liability Act of 1980 (“CERCLA”), 42 
30a 

U.S.C. §§ 9601 et seq., which addresses similar toxic-waste 

issues. Meghrig, 516 U.S. at 485. Unlike the RCRA, 

CERCLA expressly authorizes monetary relief. 42 U.S.C. 

§ 9607(a)(4). “Congress thus demonstrated in CERCLA 

that it knew how to provide for the recovery of cleanup 

costs[ ] and that the language used to define the remedies 

under [the] RCRA does not provide that remedy.” Meghrig, 516 U.S. at 485. 

The Court also pointed to the statute’s threshold requirement that a party can sue only when the waste “may 

present an imminent and substantial endangerment to 

health or the environment.” § 6972(a)(1)(B). “The meaning 

of this timing restriction [was] plain” to the Court: 

“[S]ection 6972(a) was designed to provide a remedy that 

ameliorates present or obviates the risk of future ‘imminent’ harms, not a remedy that compensates for past 

cleanup efforts.” Meghrig, 516 U.S. at 485–86. 

Finally, the Court looked to “[o]ther aspects of [the] 

RCRA’s enforcement scheme.” Id. at 486. Unlike 

CERCLA, the RCRA’s citizen-suit provision lacks a statute 

of limitations or a requirement that any recovered costs 

must be reasonable. The Court reasoned that “[i]f Congress had intended § 6972(a) to function as a cost-recovery 

mechanism, the absence of these provisions would be striking.” Id. The RCRA also halts citizen suits when the EPA or 

a state pursues an enforcement action, and it requires plaintiffs to give 90-days’ notice to potential defendants before 

suing. See id. These two requirements made § 6972(a) a 

“wholly irrational mechanism” for remedying past harms. Id. 

The Court then acknowledged the “line of cases holding 

that district courts retain inherent authority to award any 

equitable remedy that is not expressly taken away from 

them by Congress.” Id. at 487 (citing Porter, 328 U.S. 395). 
31a 

But these cases couldn’t support an implied restitution 

remedy. As the Court put it: 

[T]he limited remedies described in § 6972(a), along 

with the stark differences between the language of 

that section and the cost-recovery provisions of 

CERCLA, amply demonstrate that Congress did 

not intend for a private citizen to be able to undertake a cleanup and then proceed to recover its costs 

under [the] RCRA. . . . [W]here Congress has provided elaborate enforcement provisions for remedying the violation of a federal statute, as Congress 

has done with [the] RCRA and CERCLA, it cannot 

be assumed that Congress intended to authorize by 

implication additional judicial remedies for private 

citizens suing under the statute. It is an elemental 

canon of statutory construction that where a statute 

expressly provides a particular remedy or remedies, 

a court must be chary of reading others into it. 

Id. at 487–88 (quotation marks omitted). Notwithstanding 

Porter, the Court held that § 6972(a) does not “contemplate 

the award of past cleanup costs.” Id. at 488. 

Since Meghrig, the Court has adhered to this more limited understanding of judicially implied remedies. See, e.g., 

Great-West, 534 U.S. at 209 (“We have therefore been 

especially reluctant to tamper with the enforcement 

scheme embodied in [ERISA] by extending remedies not 

specifically authorized by its text.”) (quotation marks and 

alteration omitted); Miller v. French, 530 U.S. 327, 340 

(2000) (concluding that the plain meaning of a provision 

expressed the congressional intent to displace equitable 

authority); see also Armstrong v. Exceptional Child Ctr., 

Inc., 135 S. Ct. 1378, 1385 (2015) (holding that the Medicaid 

Act’s provision of a specific remedy and the judicially un-
 

32a 

administrable nature of the relevant statutory provision 

“preclude[d] the availability of equitable relief ” in section 

30(A) of the statute); Gebser, 524 U.S. at 284 (holding that 

courts cannot enlarge the “scope of available remedies” 

under an implied right of action “in a manner at odds with 

the statutory structure and purpose”). Rather than presuming that Congress authorizes the judiciary to supplement express statutory remedies, the Court now recognizes that “the express provision of one method of enforcing a 

substantive rule suggests that Congress intended to preclude others.” Armstrong, 135 S. Ct. at 1385. 

4. Revisiting Amy Travel 

As this perhaps drawn-out discussion shows, an exploration of statutory purpose is no longer the Supreme 

Court’s polestar in cases raising interpretive questions 

about the scope of statutory remedies, and that shift has 

unsettled Porter’s and Mitchell’s instruction to “provide 

complete relief in light of the statutory purposes.” Mitchell, 361 U.S. at 292; see also Singer, 668 F.2d at 1113 

(grounding its reading of section 13(b) on this premise). See 

generally Manning, supra, at 23 (“[W]here ‘the statutory 

language is clear,’ the Court has disclaimed the need even 

‘to reach arguments based on statutory purpose[ ] [or] 

legislative history.’ ” (quoting Boyle v. United States, 556 

U.S. 938, 950 (2009))); WILLIAM N. ESKRIDGE JR., 

INTERPRETING LAW: A PRIMER ON HOW TO READ 

STATUTES AND THE CONSTITUTION 81 (2016) (“We are all 

textualists. That means that a judge must relate all sources 

of and arguments about statutory interpretation to a text 

the legislature has enacted.”). Indeed, the Court has 

“abandoned” its prior understanding that judges must “be 

alert to provide such remedies as are necessary to make 

effective the congressional purpose expressed by a stat-
 

33a 

ute.” Alexander v. Sandoval, 532 U.S. 275, 287 (2001) (quotation marks omitted); accord Ziglar v. Abbasi, 137 S. Ct. 

1843, 1855 (2017). It is now well settled that Congress, not 

the judiciary, controls the scope of remedial relief when a 

statute provides a cause of action. See Armstrong, 135 S. 

Ct. at 1385 (“Courts of equity can no more disregard statutory and constitutional requirements and provisions than 

can courts of law.”) (quotation marks omitted); Thomas W. 

Merrill, The Disposing Power of the Legislature, 110 

COLUM. L. REV. 452, 465–66 (2010). 

Whatever strength Porter and Mitchell retain, Meghrig 

clarifies that they cannot be used as Amy Travel saw 

them—a license to categorically recognize all ancillary 

forms of equitable relief without a close analysis of statutory text and structure. To be sure, the Court still presumes 

that courts retain their “traditional equitable authority.” 

Miller, 530 U.S. at 340. But even under Porter and Mitchell, this authority comes with an important qualifier: “unless otherwise provided by statute.” Porter, 328 U.S. at 

398; Mitchell, 361 U.S. at 291. Unsurprisingly, every appellate court to consider the relationship between Meghrig, 

Porter, and Mitchell recognizes that Meghrig reinforced 

and clarified this qualifier. 

Some circuits have concluded that a statute displaces 

equitable authority when it specifies a particular remedy. 

See Owner-Operator Indep. Drivers Ass’n, Inc. v. Swift 

Transp. Co., 632 F.3d 1111, 1121 (9th Cir. 2011) (finding 

that a statutory provision allowing a person to seek “injunctive relief ” acted “to the exclusion of other equitable 

remedies”); Landstar Sys., 622 F.3d at 1324 (noting that 

the statute at issue authorized only injunctions and concluding that if it “allowed for restitution or disgorgement, 

it would have so stated”). Others more narrowly construe 
34a 

Meghrig as a command that “courts must consider a statute’s remedial scheme” when determining whether a statute displaces equitable authority. See United States v. Lane 

Labs-USA Inc., 427 F.3d 219, 235 (3d Cir. 2005); see also 

United States v. Rx Depot, Inc., 438 F.3d 1052, 1057 (10th 

Cir. 2006) (reading Meghrig as showing that “a statute’s 

particular characteristics” can displace equitable authority). 

The D.C. Circuit thoroughly examined the effect of Meghrig in United States v. Philip Morris USA, Inc., 396 F.3d 

1190 (D.C. Cir. 2005). Harmonizing Meghrig and Porter, it 

held that a statute’s “comprehensive and reticulated scheme, 

along with the plain meaning of the words themselves, serves 

to raise a necessary and inescapable inference, sufficient 

under Porter, that Congress intended to limit relief.” Id. at 

1200 (quotation marks and citation omitted). 

We don’t need to plant ourselves firmly along this doctrinal spectrum to decide this case. It’s inescapable that 

Meghrig not only displaced Amy Travel’s categorical approach to judicially implied remedies but also its interpretation of section 13(b). Every one of Meghrig’s reasons for 

refusing to find restitutionary authority in the RCRA 

applies with equal force to section 13(b). 

Like the RCRA, section 13(b)’s plain text doesn’t contemplate an award of restitution. See Meghrig, 516 U.S. at 

484. It authorizes only temporary restraining orders and 

injunctions. And like the relationship between the RCRA 

and CERCLA, the relationship between section 13(b), 

§ 45(l), and § 57b(b) “is telling.” Id. at 485. Both § 45(l) and 

§ 57b(b) expressly authorize additional equitable remedies. 

§ 45(l) (“mandatory injunctions and such other and further 

equitable relief as [courts] deem appropriate”); § 57b(b) 

(“such relief as the court finds necessary . . . , [including] 
35a 

the refund of money or return of property”). Section 13(b) 

lacks comparable language. 

Meghrig also instructs us to interpret remedial language with reference to “the harm at which it is directed.” 

516 U.S. at 485. While the FTCA’s express restitution 

provisions authorize the Commission to sue for past conduct, to proceed under section 13(b), the Commission must 

reasonably believe that a person “is violating” or “about to 

violate” the law. § 53(b)(1); cf. § 45(b) (empowering the 

Commission to bring a cease-and-desist action when it 

reasonably believes someone “has been or is” violating the 

act). As with the RCRA, “[t]he meaning of this timing 

restriction is plain.” Meghrig, 516 U.S. at 485. Section 13(b) 

“was designed to provide a remedy that ameliorates present or obviates the risk of future ‘imminent’ harms, not a 

remedy that compensates” for past violations. Id. at 486. 

Further, as we’ve explained, section 13(b) is procedurally incompatible with restitution. For example, before invoking section 13(b), the Commission must reasonably believe 

that stopping an ongoing or imminent violation is in the 

public interest. § 53(b)(2). And the statute dissolves a preliminary injunction if the Commission doesn’t begin an 

administrative proceeding before a court-set deadline. 

§ 53(b). But the Commission would have no need for an 

administrative proceeding if it can get complete restitutionary relief through section 13(b)’s permanent-injunction 

provision. In short, section 13(b)’s prerequisites, like those 

in the RCRA, make it a “wholly irrational mechanism” for 

remedying past harms. Meghrig, 516 U.S. at 486. 

Relatedly, unlike § 57b(b), section 13(b) has no statute 

of limitations. The absence of a limitations period in the 

RCRA was “striking” to the Meghrig Court and provided 

strong evidence that the RCRA’s injunction provision did 
36a 

not implicitly authorize restitution. Id. The same is true 

here. 

Section 13(b) also lacks a central feature of the FTCA 

provisions that expressly permit monetary relief: a notice 

requirement. When the Commission brings an administrative cease-and-desist action, it can secure restitution only 

by proving that the violation occurred after its order became final or that “a reasonable man” would have known 

that the conduct was fraudulent. §§ 45(l); 57b(a)(2). And 

notice is also baked into the Commission’s power to promulgate and enforce rules. The Commission must follow 

detailed procedures before promulgating a final rule. See 

id. § 57a(b)(1) (requiring publication of notice and an informal hearing for rulemaking). Moreover, final rules must 

“define with specificity” the prohibited acts. § 57a(a)(1)(B). 

The Supreme Court has held that similar provisions are 

crucial to determining the remedial scope of implied rights 

of action, a closely related context: “It would be unsound 

. . . for a statute’s express system of enforcement to require 

notice to the recipient and an opportunity to come into 

voluntary compliance while a judicially implied system of 

enforcement permits substantial liability without regard to 

the recipient’s knowledge or its corrective actions upon 

receiving notice.” Gebser, 524 U.S. at 289. We face the same 

unsound result here: Reading an implied restitution remedy into section 13(b) allows the Commission to circumvent 

the FTCA’s detailed notice requirements. 

Finally, we note that the difference in plaintiffs— 

private citizens in Meghrig and a federal agency here— 

isn’t material. To be sure, when “the public interest is involved in a proceeding,” a court’s “equitable powers assume an even broader and more flexible character than 

when only a private controversy is at stake.” Porter, 328 
 

37a 

U.S. at 398; accord Kansas v. Nebraska, 574 U.S. 445 

(2015). But the public interest doesn’t turn on the identity 

of the parties involved. 

Virginian Railway Co. v. System Federation No. 40, 

300 U.S. 515, 552 (1937), the authority Porter cited to invoke the “public interest,” is instructive on this point. Even 

though the suit was between a railroad company and a 

union, the Court determined that “[m]ore [was] involved 

than the settlement of a private controversy.” Id. “The 

peaceable settlement of labor controversies . . . is a matter 

of public concern.” Id.; see also id. (“The fact that Congress has indicated its purpose to make negotiation obligatory is in itself a declaration of public interest and policy 

. . . .”). Presaging Porter, the Court observed that “[c]ourts 

of equity may, and frequently do, go much farther both to 

give and withhold relief in furtherance of the public interest than they are accustomed to go when only private interests are involved.” Id.; cf. Gen. Tel. Co. of the Nw., Inc. v. 

EEOC, 446 U.S. 318, 326 & n.8 (1980) (“When the EEOC 

acts, albeit at the behest of and for the benefit of specific 

individuals, it acts also to vindicate the public interest in 

preventing employment discrimination.” (citing Porter, 328 

U.S. at 397–98)). 

Under Virginian Railway Co., both Meghrig and this 

case implicate the public interest. Both involve enforcing 

federal statutory obligations, and both involve matters of 

“public concern”—environmental cleanup and consumer 

protection. Even so, Meghrig did not find an implied right 

to restitution in the RCRA. So the fact that the government is the plaintiff here does not affect the analysis. Consider United States v. Apex Oil Co., in which we examined 

Meghrig’s impact on 42 U.S.C. § 6973(a), the RCRA’s government-suit provision. 579 F.3d 734 (7th Cir. 2009). We did 
38a 

not draw a distinction between the RCRA’s government 

and citizen-suit provisions. Observing that the provisions 

use “identical language,” we concluded that the RCRA 

“entitles the government only to require the defendant to 

clean up the contaminated site at the defendant’s expense.” 

Id. at 737. We then announced that our “[e]arlier cases, . . . 

which allowed an award of clean-up costs on the basis of 

general equitable principles set forth in such cases as 

Mitchell v. Robert De Mario Jewelry, Inc., and Porter v. 

Warner Holding Co., are dead after Meghrig.” Id. (citations omitted). 

Although section 13(b) doesn’t use identical language as 

the RCRA’s citizen-suit provision, Meghrig remains materially indistinguishable. So we must pay close attention to 

its bottom line: “[W]here Congress has provided elaborate 

enforcement provisions for remedying the violation of a 

federal statute, . . . it cannot be assumed that Congress 

intended to authorize by implication additional judicial 

remedies . . . .” Meghrig, 516 U.S. at 487–88 (emphasis 

added) (quotation marks omitted); see also Gebser, 524 

U.S. at 290 (“Where a statute’s express enforcement 

scheme hinges its most severe sanction on notice and unsuccessful efforts to obtain compliance, we cannot attribute 

to Congress the intention to have implied an enforcement 

scheme that allows imposition of greater liability without 

comparable conditions.”) (emphasis added). 

Our limited analysis in Amy Travel doesn’t offer a way 

to distinguish Meghrig. It instead requires us to ignore 

section 13(b)’s text and disregard the FTCA’s “elaborate 

enforcement provisions.” In light of the Court’s commands 

in Meghrig, our holding in Amy Travel is no longer viable. 

Conversely, reading section 13(b) as authorizing only injunctive relief—that is, reading it to mean what it plainly 
39a 

says—harmonizes Meghrig with Porter and Mitchell, 

which also called for a statute-specific and remedy-specific 

inquiry before authorizing an implied form of relief. See, 

e.g., Porter, 328 U.S. at 403 (holding that a separate cause 

of action for damages was enough to preclude courts from 

inferring that remedy elsewhere). 

We recognize that this conclusion departs from the consensus view of our sister circuits. But when deciding 

whether we should overturn precedent, “[w]e are not merely to count noses. The parties are entitled to our independent judgment.” United States v. Hill, 48 F.3d 228, 232 (7th 

Cir. 1995). And we must break from our colleagues. As 

noted, most circuits adopted their position by uncritically 

accepting our holding in Amy Travel, which expanded on 

Elders Grain, which expanded on Singer, which expanded 

on Porter and Mitchell. No circuit has examined whether 

reading a restitution remedy into section 13(b) comports 

with the FTCA’s text and structure. Nor has anyone determined whether § 45 forecloses this remedy. And although some have briefly discussed § 57b, they have done so 

only to find refuge in the saving clause in § 57b(e). Perhaps 

most importantly, no circuit has ever considered the effect 

of Meghrig in a section 13(b) case. 

We are well aware that we need a compelling reason to 

overturn circuit precedent. “However, important as stare 

decisis is, it is equally important for us to respect the statutes that Congress has passed and to correct any problems 

we see in our prior interpretations of those statutes.” Ahng 

v. All-steel, 96 F.3d 1033, 1037 (7th Cir. 1996); see also S. Ill. 

Power Coop. v. EPA, 863 F.3d 666, 673 (7th Cir. 2017) (noting that statutory stare decisis “is not without limits”). 

Even in the realm of statutory interpretation, a Supreme 

Court decision “on an analogous issue that compels us to 
 

40a 

reconsider our position” counts as a compelling reason to 

overturn precedent. Glaser, 570 F.3d at 915. We cannot 

favor our own decisions over those of the Supreme Court. 

Stare decisis alone cannot overcome Amy Travel’s clear 

incompatibilities with the FTCA’s text and structure, Meghrig, and the Supreme Court’s broader refinement of its 

implied remedies jurisprudence. We therefore hold that 

section 13(b)’s permanent-injunction provision does not 

authorize monetary relief.4 

III. Conclusion 

For the foregoing reasons, we VACATE the restitution 

award. In all other respects, we AFFIRM the judgment. 

4

 Because we hold that section 13(b) doesn’t authorize monetary relief, we have no need to consider Brown’s alternative arguments that 

the Commission can’t pursue penalties or legal—as distinct from 

equitable—restitution under section 13(b). See FTC v. AMG Capital 

Mgmt., LLC, 910 F.3d 417, 429 (9th Cir. 2018) (O’Scannlain, J., concurring) (discussing these arguments). We also don’t need to consider the 

district court’s asset-freeze determinations. 
41a 

WOOD, Chief Judge, with whom ROVNER and 

HAMILTON, Circuit Judges, join, dissenting from the denial 

of rehearing en banc. For decades, this court has successfully used a local rule, Circuit Rule 40(e), for two important 

purposes: to highlight a decision to create a conflict in the 

circuits, and to clean up earlier decisions whose soundness 

has been undermined by later legislation, Supreme Court 

activity, or a consensus among our sister circuits. Yet we 

have taken care not to use Rule 40(e) in a way that defeats 

our profound commitment to oral argument—a commitment that sets us apart from most of the other circuits, and 

one that consistently improves the quality of our decisionmaking. The opportunity to ask questions of counsel, to 

hear the questions of fellow judges, and to have a full debate after argument regularly reveals aspects of a case 

that even the most thorough reading of the briefs on one 

judge’s part cannot provide. 

The majority, however, has chosen to use Rule 40(e) in 

the case now before us. It is a singularly inappropriate case 

for that treatment: it overrules not only a long-standing 

decision from this court, FTC v. Amy Travel Serv., Inc., 

875 F.2d 564 (7th Cir. 1989), but it also pays no heed to the 

fact that eight other circuits agree with the Amy Travel 

approach. See Brief of the Federal Trade Commission at 28 

n. 12. Perhaps if a recent Supreme Court decision demanded that sea change, the majority’s opinion would be defensible. But there is no such decision. Instead, the majority 

extrapolates from the line of cases addressing whether a 

private party has an implied right of action to the issue 

presented here: whether a government agency, the Federal 

Trade Commission, which enjoys an express right of action 

under a statute for injunctive relief, is entitled to a restitutionary remedy that is ancillary to, or part of, the injunction. 
42a 

To my knowledge, no court has ever tied the hands of a 

government agency in the way that the majority has done 

here, and the majority cites none. It has taken this step 

without the careful consideration that plenary en banc 

review would have provided. I am reminded of the words 

spoken by Gaius Julius Caesar in 49 B.C.E., as he approached the Rubicon river at the head of his army. He 

knew that the Roman Senate forbade any armed force to 

enter Rome. But he decided to flout that command, and as 

he marched with his troops across the river, he is said to 

have proclaimed “alea iacta est” – the die is cast. And indeed it was. Caesar’s act led to civil war and eventually the 

end of the Roman Republic; he became dictator for life and 

inaugurated the Roman Empire. See, e.g., Meaning Behind 

the Phrase to Cross the Rubicon, https://www.thoughtco. 

com/meaning-cross-the-rubicon-117548. I devoutly hope 

that the majority here has not cast the die in a way that 

will transform Rule 40(e) from an efficiency-promoting rule 

for relatively routine updates to our circuit law into something that erodes our commitment to plenary consideration, along with oral argument, of every fully counseled 

case. Time will tell. But the Rule is surely being misused in 

this case. Perhaps that would not matter if no reasonable 

person could question the correctness of the majority’s 

reasoning. Regrettably, that is not the case. From the materials now before us, I believe that the court is making a 

mistake, and it is doing so in a procedurally inappropriate 

way. 

The central issue in the case relates to the proper interpretation of section 13(b) of the FTC Act, 15 U.S.C. 

§ 53(b), which authorizes the Commission to sue for injunctive relief. Injunctions come in all shapes and sizes: some 

are prohibitory, some are mandatory, some include submis-
43a 

sion to an equitable master, some include reporting requirements, and many include ancillary measures that are 

designed to ensure that the injunction is effective. At least 

since our decision in Amy Travel, the Federal Trade Commission has understood that its authority to seek an injunction from the court includes the authority to seek a measure commanding the defendant to disgorge unlawfully 

acquired money or property. In other words, the injunction 

may include an order from the court for the disgorgement 

type of restitution. 

Obviously the restitution itself is not an “injunction,” 

any more than the master is an “injunction,” or the reporting requirements are an “injunction.” The injunction is the 

order from the court either to do something or to refrain 

from doing something. Black’s Law Dictionary lists 25 

different types of injunctions under that general heading. 

See entry for “injunction,” Black’s Law Dictionary at 904– 

05 (10th ed. 2014). The term “injunction” itself is defined 

simply as “A court order commanding or preventing an 

action.” Id. A “mandatory injunction” is one “that orders 

an affirmative act or mandates a specified course of conduct.” Id. Nothing whatever in section 13(b) deletes from 

the list of possible affirmative acts that an injunction may 

include an order requiring the enjoined party to return illgotten gains, or to pay money into a court escrow account, 

or otherwise to turn over property. That should be enough 

by itself to show the error in the path the majority has 

taken. 

The majority rejects this straightforward reading of 

the statute and argues to the contrary that “the textual 

case in the FTCA against implying restitution in section 

13(b) is overwhelming.” But more than rhetoric is needed 

to establish that point. From my standpoint, if the text is 
44a 

overwhelming at all, I find it overwhelmingly to support 

the power of the FTC to use any of the tools that Congress 

gave it, including the one it used here, which entitles it to 

seek injunctive relief from a court. 

The Supreme Court supported the approach I would 

take in California v. American Stores Co., 495 U.S. 271 

(1990). There the question was whether “divestiture is a 

form of injunctive relief within the meaning of ” section 16 

of the Clayton Act, 15 U.S.C. § 26. 495 U.S. at 275. After 

the FTC had decided not to challenge a merger of certain 

grocery stores in California, the merger was consummated. 

The next day, however, the State of California filed an 

action in federal court alleging that the merger violated 

section 1 of the Sherman Act, 15 U.S.C. § 1, and seeking 

“an injunction requiring American to divest itself of all of 

[the acquired firm’s] assets and businesses in the State of 

California.” 495 U.S. at 276. The district court had granted 

a preliminary injunction along those lines, but the Ninth 

Circuit reversed on the ground that the injunctive relief 

authorized by the statute did not include divestiture. The 

Supreme Court reversed the court of appeals, finding that 

“the statutory language [of section 16] indicates Congress’ 

intention that traditional principles of equity govern the 

grant of injunctive relief.” Id. at 281. An order of divestiture is almost identical to an order requiring equitable 

restitution: both require the wrongdoer to turn over property that was unlawfully obtained. Similarly, the language 

of section 16 of the Clayton Act is not materially different 

from the language of section 13(b) of the FTC Act. In my 

view, the majority’s approach conflicts with the most closely applicable Supreme Court decision. 

This is especially troubling because the majority has 

not pointed to any case in which the Supreme Court has 
45a 

said that a federal agency must avoid one type of remedial 

authority it holds and instead use a different type. That, 

effectively, is what the majority has done here, in its discussion of the various tools the FTC Act provides for enforcement of the prohibition against unfair or deceptive 

trade practices. Ante at 11. The Commission may use its 

“cease and desist” power in an administrative proceeding, 

see FTC Act § 5(b), 15 U.S.C. § 45(b); it may, after providing notice to the Attorney General under section 16 of the 

FTC Act, 15 U.S.C. § 56, sue someone who violates a ceaseand-desist order, see FTC Act § 5(l)–(m), 15 U.S.C. § 45(l)– 

(m); it may promulgate rules that define unfair or deceptive practices, FTC Act § 18, 15 U.S.C. § 57a; or it may (as 

it did here) file a suit in federal court for an injunction, 

FTC Act § 13(b), 15 U.S.C. § 53(b). 

The Supreme Court recognizes that agencies have 

broad discretion in their choice of which of several authorized procedural tools they wish to use as they carry out 

their mission. The best-known example of this practice 

comes from the field of labor law. The National Labor 

Relations Board has both rulemaking power, see 29 U.S.C. 

§ 156, and adjudicatory powers, see 29 U.S.C. § 160. The 

Board does not, however, follow the practice of using its 

rulemaking powers when it announces new rules; it prefers 

to proceed on a case-by-case basis through the adjudicative 

process. See, e.g., Mark H. Grunewald, The NLRB’s First 

Rulemaking: An Exercise in Pragmatism, 41 DUKE L.J. 

273 (1991). Over the years people have challenged this 

choice on the ground that the Board is evading the detailed 

protections for rulemaking that Congress has provided in 

the Administrative Procedure Act, 5 U.S.C. § 553, but the 

Supreme Court has always rejected those arguments. See, 

e.g., NLRB v. Bell Aerospace Co. Div. of Textron, Inc., 416 
46a 

U.S. 267 (1974), confirming the rule from NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969), to this effect. As the 

Bell Aerospace opinion put it, “[t]he views expressed in 

Chenery II and Wyman-Gordon make plain that the Board 

is not precluded from announcing new principles in an 

adjudicative proceeding and that the choice between rulemaking and adjudication lies in the first instance within the 

Board’s discretion. Although there may be situations 

where the Board’s reliance on adjudication would amount 

to an abuse of discretion or a violation of the Act, nothing in 

the present case would justify such a conclusion.” 416 U.S. 

at 294. 

I can think of no principled reason why the Labor 

Board should have that discretion, but the FTC should not. 

The majority argues to the contrary from a line of cases 

that is inapposite. It conflates decisions about which plaintiffs are authorized to bring a suit (the implied-right-ofaction line) with the distinct question about what remedies 

are available to a party that is expressly authorized by 

statute to sue, as the FTC surely is here. The cases on 

which the panel relies all involve private enforcement, 

where the Court has warned us to ensure that we should 

not permit a facile work-around to a complex enforcement 

system. See, e.g., Middlesex Cnty. Sewerage Auth. v. Nat’l 

Sea Clammers Ass’n, 453 U.S. 1, 14 (1981). A case involving public enforcement is quite different. If the agency 

believes that Path A has certain advantages and downsides, 

while Path B has different plusses and minuses, neither 

approach should be read out of the statute. Both are available to the agency, and each one will serve its intended 

functions, constrained by its safeguards. 

The majority thinks that it would be “wholly irrational” 

for Congress to write a statute that provides for restitution 
47a 

as part of a 13(b) temporary restraining order, preliminary 

injunction, or permanent injunction, while also spelling out 

less-streamlined options for the Commission to pursue. But 

this ignores real differences among its options. Perhaps, 

because of the risk of dissipation of ill-gotten gains, the 

Commission might want restitution to begin right away 

while the case is pending, e.g., through payment into a 

court-operated escrow account; in order to do that, it can 

seek a preliminary injunction for the turn-over of funds. In 

another case, the Commission might prefer to use the 

cease-and-desist route and develop the factual record 

through its own administrative processes—ensuring judicial deference to its fact-finding down the road—rather 

than operate under the thumb of a court. 

Branding such a scheme as “wholly irrational” is unwarranted without a more focused examination of why the 

Commission might choose one route or another—a choice, 

I reiterate, that we usually allow agencies to make. Cf. Bell 

Aerospace, 416 U.S. at 294–95 (concluding that agency has 

power to choose adjudication or rulemaking as a means to 

announce new principles while examining agency’s legitimate reasons for pursuing one or the other method of 

proceeding). Such an inquiry requires a deferential look at 

why Congress gave the agency a menu of options. That is 

just what Congress did in the FTC Act. The statute gives 

the Commission the ability to move unilaterally when it 

uses its rulemaking or cease-and-desist powers, and to act 

as a party before the court if it wants a preliminary or 

permanent injunction. It is not up to us to take away that 

which Congress gave. 

Another inapposite line of cases on which the majority 

relies addresses implied private rights of action—a problem we surely do not have here. See, e.g., Alexander v. 
48a 

Sandoval, 532 U.S. 275 (2001). Rather than a private party, 

we have a government agency, and rather than an implied 

right of action, we have an express statutory provision 

authorizing the agency to seek injunctive relief. That 

makes a difference. Indeed, in a number of areas—antitrust, 

securities regulation, RICO—the Supreme Court has begun 

drawing a distinction between the breadth of a private right 

of action and the greater breadth appropriate for public 

enforcement. Thus, in RJR Nabisco Inc. v. European 

Community, 136 S. Ct. 2090 (2016), the Court found that 

private parties (including for this purpose the European 

Community, which had no special governmental status under the applicable law) cannot enforce RICO extraterritorially, but that the U.S. government stands in a different 

position. The Court made the same point in F. Hoffman-La 

Roche Ltd. v. Empagran S.A., 542 U.S. 155 (2004): 

In all three cases [on which the Empagran plaintiffs 

relied], however, the plaintiff was the Government 

of the United States. A Government plaintiff, unlike 

a private plaintiff, must seek to obtain the relief 

necessary to protect the public from further anticompetitive conduct and to redress anticompetitive 

harm. And a Government plaintiff has legal authority broad enough to allow it to carry out this mission. 

15 U.S.C. § 25 . . . . Private plaintiffs, by way of contrast, are far less likely to be able to secure broad 

relief. See California v. American Stores Co., 495 

U.S. 271, 295 (1990) (“Our conclusion that a district 

court has the power to order divestiture in appropriate cases brought [by private plaintiffs] does not, 

of course, mean that such power should be exercised 

in every situation in which the Government would 

be entitled to such relief . . . .”); 2 P. Areeda, 
49a 

Hovenkamp & R. Blair, Antitrust Law ¶¶ 303d– 

303e, pp. 40–45 (2d ed. 2000) (distinguishing between private and government suits in terms of 

availability, public interest motives, and remedial 

scope) . . . . This difference means that the Government’s ability, in these three cases, to obtain relief helpful to those injured abroad tells us little or 

nothing about whether this Court would have 

awarded similar relief at the request of private 

plaintiffs. 

Id. at 170–71. 

The panel’s effort to explain why injunctive relief cannot include an order to disgorge money by reference to 

Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), is no 

more successful. Wal-Mart was a class action case, through 

and through. Most of it deals with the inappropriateness of 

a money-damages action under Federal Rule of Civil Procedure 23(b)(3) for the sprawling and unmanageable class 

that the plaintiffs had proposed. But the Court also addressed the plaintiffs’ back-up position, which was their 

effort to certify a class for backpay claims under Rule 

23(b)(2). Subpart (b)(2) of the rule allows a class if “the 

party opposing the class has acted or refused to act on 

grounds that apply generally to the class, so that final 

injunctive relief or corresponding declaratory relief is 

appropriate respecting the class as a whole.” Note the 

emphasis in this language on general grounds, and relief 

that works for the class as a whole. As the Court pointed 

out, that unity of interests is especially critical in a (b)(2) 

class, because the unnamed class members have no right to 

notice and the chance to opt out of such a class, yet they 

would be bound by the outcome of the lawsuit. Those concerns are miles away from what we have in this case. 
50a 

What the Court said in Wal-Mart is that claims for 

monetary relief cannot be certified “at least where (as 

here) the monetary relief is not incidental to the injunctive 

or declaratory relief.” 564 U.S. at 360. It went on to explain 

itself as follows: 

One possible reading of [Rule 23(b)(2)] is that it applies only to requests for such injunctive or declaratory relief and does not authorize the class certification of monetary claims at all. We need not reach 

that broader question in this case, because we think 

that, at a minimum, claims for individualized relief 

(like the backpay at issue here) do not satisfy the 

Rule. The key to the (b)(2) class is “the indivisible 

nature of the injunctive or declaratory remedy warranted—the notion that the conduct is such that it 

can be enjoined or declared unlawful only as to all of 

the class members or as to none of them.” Nagareda, 84 N.Y.U.L.Rev., at 132. In other words, Rule 

23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each 

member of the class. It does not authorize class certification when each individual class member would 

be entitled to a different injunction or declaratory 

judgment against the defendant. Similarly, it does 

not authorize class certification when each class 

member would be entitled to an individualized 

award of monetary damages. . . . 

Given that structure, we think it clear that individualized monetary claims belong in Rule 23(b)(3). The 

procedural protections attending the (b)(3) class— 

predominance, superiority, mandatory notice, and 

the right to opt out—are missing from (b)(2) not because the Rule considers them unnecessary, but be-
51a 

cause it considers them unnecessary to a (b)(2) 

class. When a class seeks an indivisible injunction 

benefitting all its members at once, there is no reason to undertake a case-specific inquiry into whether class issues predominate or whether class action 

is a superior method of adjudicating the dispute. 

Predominance and superiority are self-evident. But 

with respect to each class member’s individualized 

claim for money, that is not so—which is precisely 

why (b)(3) requires the judge to make findings 

about predominance and superiority before allowing 

the class. 

Id. at 360–63. 

One cannot read this excerpt—lengthy in order to ensure that the full context comes through—without seeing 

that the Court was concerned solely about which type of 

class action should be used where money is concerned. No 

such problem is possible in the case before us. First, since 

there is only one plaintiff—the Commission—we have no 

unnamed class members to worry about. Second, the court 

in our case does not need to worry about individualized 

relief. The FTC is itself entitled to seek relief on behalf of 

those injured by Credit Bureau’s misdeeds. Cf. EEOC v. 

Bd. of Regents of the Univ. of Wis. Sys., 288 F.3d 296, 300 

(7th Cir. 2002) (EEOC may pursue age-discrimination case 

against a state entity on behalf of individual employees, 

even though individual cases would be barred by the state’s 

sovereign immunity). 

Credit Bureau must merely turn over to the FTC a single lump sum representing the total restitution due. This is 

the end of the court’s involvement with the equitable relief 

in this case. As the district court wrote, “[j]udgment in the 

amount of Five Million, Two Hundred Sixty Thousand, Six 
 

 

52a 

Hundred Seventy-One and Thirty-Six Cents (“5,260,671.36”) 

is entered in favor of the Commission against Defendants, 

jointly and severally, as equitable monetary relief. Defendants are ordered to pay to the Commission [$5,260,671.36]. 

Such payment must be made within 7 days of entry of this 

Order . . .” Final Judgment and Order for Permanent Injunction and Other Equitable Relief Against Defendants 

Credit Bureau Center, LLC and Michael Brown (Kennelly, 

J.) (June 26, 2018) (emphasis added). It then falls to the 

Commission to craft a plan to return the ill-gotten gains to 

each person who was harmed, where possible, and then turn 

over the remaining money to the Treasury. See FTC Office 

of Claims and Refunds Annual Report 2017, 

https://www.ftc.gov/system/files/documents/reports/bureauconsumer-protection-office-claims-refunds-annual-report2017-consumer-refunds-effectedjuly/redressreportformatedforweb122117.pdf. There is no risk that an unnamed 

class member’s claim would be lost through the operation 

of the law of preclusion. There is no risk, as in Wal-Mart, 

that the court would need to “reevaluate the roster of class 

members continually,” id. at 364. Nor, in contrast to WalMart, does this case present the problem of internal conflict within a class. Id. at 365. Instead, the restitution issue 

can be resolved in “one stroke.” Id. at 350. In sum, nothing 

in Wal-Mart says that an injunction to turn over wrongfully acquired property (here, in the form of money) to a 

government agency is in any way objectionable. 

I next turn to the Supreme Court’s decision in Meghrig 

v. KFC Western, Inc., 516 U.S. 479 (1996), on which the 

majority relies so heavily. The issue in Meghrig was 

“whether § 7002 of the Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. § 6972, authorizes a 

private cause of action to recover the prior cost of cleaning 
53a 

up toxic waste that does not, at the time of suit, continue to 

pose an endangerment to health or the environment.” 516 

U.S. at 481. In order to answer that question, the Court 

had to construe the citizen-suit provision of RCRA, 42 

U.S.C. § 6972(a). It held that two requirements of section 

6972 defeated plaintiff KFC’s suit: first, the citizen-suit 

provision reaches only imminent and substantial harms, 

not past problems that have been addressed; and second, 

the remedial language focuses only on the restraint of 

ongoing clean-up and disposal problems, not on past cleanup costs (“whether [those] are denominated ‘damages’ or 

‘equitable restitution’ ”). 516 U.S. at 484. 

This was a pure question of statutory interpretation. 

The relevant part of RCRA authorized a citizen suit 

“against any person . . . who has contributed or who is 

contributing to the past or present handling, storage, 

treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.” 42 

U.S.C. § 6972(a)(1)(B) (emphasis added). The Court gave 

that provision its natural reading—that is, as something 

that did not include a remedy for past cleanup costs. Id. at 

485. It emphasized in that connection the importance of the 

imminence requirement, which entirely ruled out any form 

of relief, however labeled, for a fixed sum representing past 

expenditures. Only in that context did the Court reject the 

argument that a plaintiff “could seek equitable restitution 

of money previously spent on cleanup efforts.” Id. at 487. 

General rules about equitable powers were of no importance for a statute that drew the temporal line at problems that are “imminent and substantial.” Id. Interestingly, 

the Court declined to rule on the question “whether a 

private party could seek to obtain an injunction requiring 
 

54a 

another party to pay cleanup costs which arise after a 

RCRA citizen suit has been properly commenced . . . .” Id. 

at 488. That reservation proves that the Court was not 

ruling out equitable turn-over of funds, period. It was 

simply saying that past expenditures were not covered by 

the statute in front of it. 

So even Meghrig itself, a case involving private plaintiffs, did not purport categorically to exclude from injunctive relief an order to make payments. It is thus all the 

more remarkable that the majority interprets Meghrig to 

impose such a limitation on the relief that a government 

plaintiff can seek. As the majority acknowledges, “when 

‘the public interest is involved in a proceeding,’ a court’s 

‘equitable powers assume an even broader and more flexible character than when only a private controversy is at 

stake,’ ” ante at 784, quoting Porter v. Warner Holding Co., 

328 U.S. 395, 398 (1946). But it then goes on to postulate 

that “the public interest doesn’t turn on the identity of the 

parties involved.” Id. That is not accurate. One factor informing the public interest is whether it is the government 

that is seeking relief. See, e.g., Winter v. Nat. Res. Defense 

Council, Inc., 555 U.S. 7 (2008) (attaching great weight to 

Navy’s interest in realistic training of sailors). The FTC’s 

assessment of the public interest here informs the scope of 

any injunctive relief it is seeking. 

The presence of the government as a litigant is especially important to the public-interest component of the 

analysis when the government seeks remedies that (1) lie 

uniquely within its toolbox and (2) are aimed squarely at 

undoing public harms and preventing future ones through 

deterrence. As the Second Circuit has noted in a section 

13(b) case of its own (discussed in further detail below), 

this is precisely what the Commission seeks here by way of 
55a 

an injunction ordering equitable restitution in the form of 

disgorgement. “[D]isgorgement is a distinctly publicregarding remedy, available only to government entities 

seeking to enforce explicit statutory provisions.” FTC v. 

Bronson Partners, LLC, 654 F.3d 359, 372 (2d Cir. 2011) 

(affirming an injunction ordering “restitution” under 13(b) 

authority and discussing the theory underlying what the 

court understood to be equitable disgorgement). 

The Supreme Court has explicitly recognized this feature of disgorgement in the SEC context. “SEC disgorgement is imposed by the courts as a consequence for violating what we described in Meeker as public laws. The violation for which the remedy is sought is committed against 

the United States rather than an aggrieved individual— 

this is why, for example, a securities-enforcement action 

may proceed even if victims do not support or are not parties to the prosecution.” Kokesh v. SEC, 137 S. Ct. 1635, 

198 L.Ed.2d 86 (2017). As the Court acknowledged in 

Kokesh, this understanding of disgorgement permeates the 

case law of our sister circuits as well. See SEC v. Teo, 746 

F.3d 90, 102 (3d Cir. 2014) (“[T]he SEC pursues [disgorgement] independent of the claims of individual investors in 

order to promot[e] economic and social policies”) (cleaned 

up); SEC v. Rind, 991 F.2d 1486, 1491 (9th Cir. 1993) 

(“[D]isgorgement actions further the Commission’s public 

policy mission of protecting investors and safeguarding the 

integrity of the markets”). Here, the FTC is seeking to 

vindicate the public interest through a public-facing remedy aimed at an ongoing harm. That was not the case in 

Meghrig, which was certainly about “environmental cleanup” but which rejected a backward-looking remedy that in 

economic substance sought damages. 
56a 

The majority also asserts that cases decided since Meghrig demonstrate that it represented a sweeping rejection of 

implied remedies. Ante at 33. It cites Great-West Life & 

Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002); Miller v. 

French, 530 U.S. 327 (2000); Armstrong v. Exceptional 

Child Ctr., Inc., 135 S. Ct. 1378 (2015), and Gebser v. Lago 

Vista Ind. Schl. Dist., 524 U.S. 274 (1998), for this proposition. None of those cases, however, addresses the situation 

before us: a governmental plaintiff with an express right of 

action, and an agency that seeks an injunction (also expressly authorized) ordering a wrongdoer to disgorge illgotten gains. 

Great-West was brought by a private party under the 

Employment Retirement Income Security Act (ERISA) to 

compel a plan beneficiary to pay over money recovered 

from a third-party tortfeasor to the plan. The Supreme 

Court held that the petitioners essentially wanted “to impose personal liability on respondents for a contractual 

obligation to pay money—relief that was not typically 

available in equity.” Id. at 210. That took their request 

beyond the bounds of equitable relief; as the Court put it, 

“an injunction to compel the payment of money past due 

under a contract was not typically available in equity.” Id. 

There is not a hint of contract law in our case, and so 

Great-West is not applicable. Miller is equally beside the 

point. There, Congress had acted explicitly to limit the 

equitable power of the district courts to enjoin the automatic stay provided by the Prison Litigation Reform Act. 

530 U.S. at 331. The Supreme Court held that the statute 

did not permit district courts to override that provision 

with a “stay of the stay,” which is what the private litigants 

sought. No such effort to undo a congressional prohibition 

exists in our case. Armstrong and Gebser are even further 
57a 

afield. Armstrong holds only that neither the Supremacy 

Clause (Art. VI, cl. 2 of the Constitution) nor the Medicaid 

Act confers a private right of action on providers of rehabilitation services, whether for injunctive relief or anything 

else. Gebser actually does recognize a limited implied private right of action for sexual harassment of schoolchildren. In short, nothing in Meghrig, and nothing in the 

cases following Meghrig, comes close to holding that a 

government agency acting pursuant to express authority to 

seek injunctive relief cannot ask for a mandatory injunction requiring turn-over of money. 

Given our decision to cast off a precedent that has guided both this court and other courts of appeals for decades, 

I add a word about our now-abandoned decision in Amy 

Travel, which held that the FTC is authorized to obtain 

restitution as part of the injunctive relief covered by section 13(b). I already have explained why I believe that 

ruling to be correct. My comments here address the majority’s effort to trivialize the fact that eight of our sister 

circuits agree with Amy Travel’s holding. They brush off 

this consensus with the accusation that these courts have 

done so unthinkingly. 

I find that charge quite unwarranted. In the interest of 

space, I focus on only one of those other cases: the Second 

Circuit’s opinion in Bronson, 654 F.3d 359 (Lynch, J.). 

There, the FTC brought suit for an injunction against 

Bronson for engaging in deceptive advertising of weightloss products. The district court “entered a permanent 

injunction against Bronson and ordered it to pay $1,942,325 

in monetary equitable relief plus statutory interest.” Id. at 

362. Bronson argued, just as Brown and Credit Bureau 

have here, that section 13(b) did not permit a court to order 

monetary relief. The Second Circuit rejected that argu-
58a 

ment, along with the narrower point that traceability of the 

ill-gotten gains was essential. But it did so only after a 

thorough and thoughtful consideration of Bronson’s argument. 

After first noting that section 13(b) of the FTC Act 

permits the FTC to seek permanent injunctive relief, the 

Second Circuit noted that “courts have consistently held 

that ‘the unqualified grant of statutory authority to issue 

an injunction under [S]ection 13(b) carries with it the full 

range of equitable remedies, including the power to grant 

consumer redress and compel disgorgement of profits.’ ” 

654 F.3d at 365. The Second Circuit explicitly joined that 

consensus, holding that section 13(b) of the FTC Act permits courts to grant ancillary equitable relief, including 

equitable monetary relief. Id. 

The court then turned to the argument that any kind of 

monetary award would be “an impermissible legal, rather 

than equitable, award, because the [district] court failed to 

identify particular funds in the defendants’ hands that 

were specifically traceable to the fraudulently marketed 

products.” Id. at 369. After a lengthy and scholarly discussion of the law of restitution, the Second Circuit concluded 

that the disgorgement ordered in the case before it was a 

permissible adjunct to the injunctive relief authorized by 

section 13(b). This was so because “the district court’s 

award satisfies the requirements of equitable disgorgement . . . .” Id. at 370. 

The court went on to confirm that “disgorgement is a 

well-established remedy in the Second Circuit,” often used 

in actions under section 21(e) of the Securities Exchange 

Act of 1934. That statute, which “authorizes an action to 

enjoin violations of the securities laws, also permits the 

district court to award disgorgement as an equitable ad-
59a 

junct to its injunctive decree.” Id. at 372. Importantly, 

“disgorgement—at least when sought by public agencies 

such as the SEC and the FTC—has several features that 

make it distinct from the remedies available to private 

litigants seeking to press common law claims.” Id. That is 

because “disgorgement is a distinctly public-regarding 

remedy, available only to government entities seeking to 

enforce explicit statutory provisions.” Id. That feature also 

plays a significant role in the case before us. 

The Second Circuit also took note of another distinction 

that I, too have stressed: “public entities [are not] required 

to make any particular effort to compensate the victims 

that they can identify,” because the victim is the government, not the individual persons. Id. at 373. It added, 

“While agencies may, as a matter of grace, attempt to 

return as much of the disgorgement proceeds as possible, 

the remedy is not, strictly speaking, restitutionary at all, in 

that the award runs in favor of the Treasury, not of the 

victims.” Id. In my view, this point underscores why the 

restitutionary payment bears no resemblance to individual 

money damages to the injured parties. 

Whatever else one might want to say about the Second 

Circuit’s analysis in Bronson, it is surely impossible to 

characterize it as a drive-by ruling or one that was not 

carefully considered and thoroughly explained. I find it 

quite persuasive. It demonstrates to me why both we and 

our sister circuits up until this time have understood that 

the injunctions authorized by section 13(b) can include a 

restitutionary component. 

Finally, I want to emphasize that even if we were interpreting this statute on a blank slate, rather than upending 

decades of precedent and creating a split with eight other 

circuits, the majority’s reading of section 13(b) is still not 
60a 

persuasive. The majority grounds its argument in the 

contrast between the injunctive relief explicitly authorized 

in section 13(b) and the remedies available to the agency if 

it opts to use its cease-and-desist powers under section 5 of 

the FTC Act or to punish violators of promulgated rules 

under section 19. (Section 5 of the Act is codified at 15 

U.S.C. § 45, while section 19 is codified at 15 U.S.C. § 57b. 

The majority uses the U.S. Code cites for sections other 

than 13(b); my analysis below uses the same scheme for 

ease of cross-reference with the majority’s opinion.) 

As the majority sees things, we must read 13(b)’s grant 

of injunctive authority extremely narrowly given that 

section 57b(b) specifically mentions “the refund of money 

or return of property” as a form of relief the court can 

order, and 45(l) allows courts to “grant mandatory injunctions and such other and further equitable relief as they 

deem appropriate.” I do not quibble with the overarching 

principle that “it is generally presumed that Congress acts 

intentionally and purposely in the disparate inclusion or 

exclusion [of words in different sections of the same Act].” 

Nken v. Holder, 556 U.S. 418, 430 (2009) (quotation marks 

omitted). But a close look at the two contrasting sections 

reveals that this is not a straightforward case of a list comprised of “A, B, and C” and another consisting of only “A 

and B.” 

I begin with section 57b(b), which lays out remedies for 

violations of final rules. Our first clue that this subsection 

should not be read to limit the scope of injunctive relief in a 

13(b) action is that courts are directed in 57b(b) to “grant 

such relief as the court finds necessary to redress injury to 

consumers or other persons, partnerships, and corporations . . .” (emphasis added). These are largely backwardfacing remedies. As discussed above, courts have long 
61a 

recognized that disgorgement of ill-gotten gains—the sort 

of equitable restitution at issue here—is a forward-looking 

remedy aimed at deterrence. Making consumers whole is a 

possible, but not inevitable, consequence of a disgorgement 

order. “[T]he primary purpose of disgorgement orders is to 

deter violations of the [ ] laws by depriving violators of 

their ill-gotten gains.” Bronson, 654 F.3d at 373, quoting 

SEC v. Fischbach Corp., 133 F.3d 170, 175 (2d Cir. 1997). 

(Notably, section 57b(b) actually prohibits courts from 

imposing “any exemplary or punitive damages.”) Second, 

while section 57b(b) lists some more forward-looking remedies, such as “public notification respecting the rule violation or the unfair or deceptive act or practice,” this language only highlights how strained it is to read section 

57b(b) as a limitation on courts’ 13(b) injunctive authority. 

Would a court issuing a 13(b) injunction be powerless to 

order a violator to post “public notification respecting the 

. . . unfair or deceptive act or practice,” simply because this 

remedy is listed in another subsection? Surely not. 

It is also important to recall that the list in 57b(b) is 

merely illustrative: courts are authorized to order relief 

that “may include, but shall not be limited to,” the listed 

remedies. This subsection is thus a poor candidate (at best) 

for the expressio unius canon. (Compare “Visitors may 

bring pets into the park on weekdays” with “Animals that 

visitors are permitted to bring into the park on weekends 

may include, but shall not be limited to, dogs, cats, snakes, 

monkeys, and alligators.” Could weekday visitors not bring 

dogs?) The savings clause in the same section is the coup 

de grâce for the majority’s reasoning. It cautions that 

“Remedies provided in this section are in addition to, and 

not in lieu of, any other remedy or right of action provided 

by State or Federal law. Nothing in this section shall be 
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construed to affect any authority of the Commission under 

any other provision of law.” Id. § 57b(e) (emphasis added). 

That says it all: the non-exhaustive examples of relief Congress chose to mention in one section do not limit what a 

court may or may not include pursuant to another section—for instance, a 13(b) injunction. 

The list of remedies available to the FTC in a cease-anddesist action, spelled out in section 45(l), also provides little 

help for the majority. True, this section authorizes the FTC 

to “grant mandatory injunctions and such other and further equitable relief as they deem appropriate . . .” But so 

what? Some forms of equitable relief make sense as 

standalone remedies, injunction or no injunction. In contrast, equitable remedies are available under 13(b) only if 

(1) a plaintiff satisfies the demanding burden of demonstrating why an injunction should issue, see eBay Inc. v. 

MercExchange, L.L.C., 547 U.S. 388 (2006); and (2) the 

court is able to justify the relief it is ordering as a proper 

adjunct to the injunctive decree. By allowing courts to 

issue “such other and further equitable relief,” section 45(l) 

clarifies that courts have a wide range of equitable relief 

available to them, no matter whether plaintiffs managed to 

obtain an injunction or, if an injunction has issued, whether 

the remedies are appropriate means of enforcing the decree. Under 45(l), a court could order an accounting or 

some sort of specific performance whether or not the requirements for a mandatory injunction had been satisfied. 

There are further weaknesses in the majority’s reading 

of the statute, but I have said enough to show that its approach is far from the most straightforward even if we did 

not have decades of precedent, eight other circuits, and 

American Stores on the other side. The FTC Act spells out 

a finely crafted system of enforcement powers and remedies. The majority’s interpretation upends what the agency 
63a 

and Congress have understood to be the status quo for 

thirty years, and in so doing grants a needless measure of 

impunity to brazen scammers like the defendant in this 

case. 

I end where I began: This is an important case, and it 

deserves plenary consideration, not the truncated process 

that Rule 40(e) provides for appropriate cases. The court’s 

refusal to rehear this case en banc has, I fear, led us into 

error. I therefore dissent from the decision not to give this 

case plenary en banc consideration. 

 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION 

————— 

FEDERAL TRADE COMMISSION, Plaintiff, 

v. 

CREDIT BUREAU CENTER, LLC, A LIMITED 

LIABILITY COMPANY, FORMERLY KNOWN AS 

MYSCORE LLC, ALSO DOING BUSINESS AS 

EFREESCORE.COM, CREDITUPDATES.COM, AND 

FREECREDITNATION.COM, MICHAEL BROWN, INDIVIDUALLY AND AS OWNER AND MANAGER OF 

CREDIT BUREAU CENTER, LLC, DANNY PIERCE, INDIVIDUALLY, AND ANDREW LLOYD, INDIVIDUALLY, Defendants. 

————— 

Case No. 17 C 194 

June 26, 2018 

————— 

MEMORANDUM OPINION AND ORDER 

MATTHEW F. KENNELLY, District Judge: 

The FTC alleges that Danny Pierce and Andrew Lloyd 

operated a deceptive marketing campaign on behalf of 

Michael Brown and Credit Bureau Center, LLC (CBC). 

The campaign directed consumers to CBC websites. The 

FTC alleges these websites misled consumers into enrolling in a monthly credit monitoring service that cost $29.94 

per month. The FTC contends this conduct violated several 

consumer protection laws. Pierce and Lloyd agreed to 

entry of a preliminary injunction against them, and after 

an evidentiary hearing, the Court issued a preliminary 

injunction against CBC and Brown on February 21, 2017. 

See FTC v. Credit Bureau Center, LLC, 235 F. Supp. 3d 

1054 (N.D. Ill. 2017). The parties have now cross-moved for 

summary judgment. 

65a 
66a 

Background 

The Court briefly reviews the background to this case, 

relying on the parties’ filings and LR 56.1 statements. In 

these statements, the defendants have failed to provide “a 

concise response” to the FTC’s statements of fact using 

“specific references to the affidavits, parts of the record, 

and other supporting materials relied upon[.]” LR 

56.1(b)(3)(B). See also Malec v. Sanford, 191 F.R.D. 581, 585 

(N.D. Ill. 2000) (“The purpose of the 56.1 statement is to 

identify for the Court the evidence supporting a party’s 

factual assertions in an organized manner: it is not intended as a forum for factual or legal argument.”). 

The FTC offers facts describing negative feedback to 

CBC in the form of phone calls, e-mails, and credit card 

chargebacks. The FTC also offers facts that Brown received e-mails from particular parties involved in CBC’s 

business that notified him of the Craigslist advertising 

scheme. Though the defendants’ burden is to rebut these 

facts through contrary evidence that show the existence of 

a genuine factual dispute, the defendants have failed to do 

so. Instead they rely on an unsupported theory that it is 

the customers who were defrauding CBC by lying about 

the websites’ deceptive character and other irrelevant or 

unfounded responses. This does not meet the requirements 

of Local Rule 56.1. Thus the Court deems as admitted 

Defs.’ Resp. to Pl.’s Stmt. of Facts ¶¶ 57-61, 72-73, 80-82, 

89, and 100. 

I. CBC and Brown 

Michael Brown is the owner, director, and sole employee 

of CBC. Independent contractors fulfilled many of CBC’s 

marketing, sales, and customer service functions. CBC 

owned and operated several websites, including Credit-
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Updates.com, FreeCreditNation.com, and eFreeScore.com. 

For a monthly subscription fee, customers can access credit 

scores, credit reports, and a credit monitoring service. 

CBC does this through two lines of business: a “white 

label/co-branding” line, in which other businesses can offer 

CBC’s services under their own name, and an affiliate 

marketing line, in which marketers direct customers to 

CBC sites. Affiliates who marketed CBC’s services were 

compensated based on the volume of customers they referred. The practices of two affiliates are at issue in this 

suit: Danny Pierce and Andrew Lloyd. 

II. Craigslist marketing 

Pierce became an affiliate for CBC in January 2014. As 

an affiliate marketer, Pierce received an identification 

number by which Brown could track the volume of his 

referrals and determine compensation. Several months 

after Pierce began working as an affiliate for CBC, he 

asked Brown to create specific websites to which he could 

direct the customers he referred. CBC created these websites on December 1, 2015. The websites, which are described in detail later in this decision, advertised that consumers could obtain a “free credit score and report.” In 

smaller type, the websites disclosed that signing up for 

these services would enroll the customer in a monthly 

credit monitoring service for $29.94 per month. 

Pierce, working as an affiliate marketer for CBC, contracted out some marketing functions to Andrew Lloyd. 

Lloyd began posting to Craigslist ads of attractive rental 

properties. Interested customers were invited to e-mail the 

“landlord” for additional information. The response e-mails 

were routed to Lloyd, who responded as though he were 

the landlord (which he wasn’t). In the reply, Lloyd would 

ask the customer to obtain a credit report through the 
 

68a 

CBC websites and would promise to set up a tour of the 

rental property once the customer had a credit report in 

hand. If interested, the customer would then sign up for 

CBC’s services and then follow up with the “landlord”— 

but would never receive a reply. (One of these e-mails has 

been attached to this opinion as Appendix I; screenshots of 

one of the CBC websites has been attached as Appendix 

II.) As Pierce later testified, he knew that Lloyd was posting “phony ads,” as Lloyd was “not renting these places 

out,” was “not a realtor” and “doesn’t own the place. . . . He 

has no connection to this property.” D.E. 206, Defs.’ Ex. C 

at 73 (Pierce Dep.). 

The marketing effort proved extremely effective. 

Pierce was the most successful of CBC’s affiliate marketers: his efforts resulted in 2,741,268 visitors to CBC’s websites. (The next largest affiliate produced 369,869 visitors.) 

Pierce’s traffic generated $6.8 million in revenue for CBC. 

But the effort, unsurprisingly, also generated significant customer complaints. Customers complained that they 

were never connected with a landlord after obtaining a 

credit report and that they did not realize that they had 

been enrolled in CBC’s credit monitoring service. A contractor who provided customer services for CBC logged 

numerous calls from dissatisfied customers. CBC also 

received customer e-mails complaining about the Craigslist 

marketing. In response, CBC’s customer service often 

denied that CBC was involved in the marketing effort or 

that CBC paid affiliate marketers for referrals. Many 

customers also asked their credit card company to reverse 

the CBC charges. Brown also received direct e-mails from 

many individuals about the Craigslist marketing program.1 

1

 Because the Court does not rely on any facts contained in customer 

complaints submitted to the Better Business Bureau (BBB), it need 
 

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III. Procedural posture 

Customers also directed their complaints to the FTC, 

which commenced an investigation into CBC. The FTC 

sued CBC, alleging that the Craigslist marketing program 

and the CBC websites violated several consumer protection laws. On January 11, 2017, Judge Sharon Johnson 

Coleman, acting as emergency judge, imposed a temporary 

restraining order on the defendants, restraining them from 

continuing the marketing program and freezing their assets. The FTC then moved for a preliminary injunction. As 

indicated earlier, Pierce and Lloyd agreed to the motion. 

CBC and Brown contested it, but the Court entered a 

preliminary injunction against them on February 21, 2017. 

Discussion 

Both parties have moved for summary judgment. Summary judgment is appropriate if “the movant shows that 

there is no genuine dispute as to any material issue of 

fact.” Fed. R. Civ. P. 56(a). There is a genuine issue of material fact if “the evidence is such that a reasonable jury 

could return a verdict for the nonmoving party.” Anderson 

v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); FTC v. 

World Media Brokers, 415 F.3d 758, 763 (7th Cir. 2005). 

I. Liability of CBC 

The FTC contends that CBC violated section 5 of the 

Federal Trade Commission Act (FTCA), 15 U.S.C. 

§ 45(a)(1); the Restoring Online Shoppers’ Confidence Act 

(ROSCA), 15 U.S.C. § 8403; and the Free Credit Reports 

Rule. 15 U.S.C. § 1681j(g)(1); 12 C.F.R. § 1022.138. The 

Court reviews each contention in turn. 

not resolve whether the BBB complaints or the affidavit submitted by 

Erin McCool, a BBB employee, are admissible. 
70a 

A. FTCA 

The FTCA prohibits “unfair or deceptive acts or practices in or affecting commerce[.]” 15 U.S.C. 45(a)(1). “The 

FTC may establish corporate liability under section 5 with 

evidence that a corporation made material representations 

likely to mislead a reasonable consumer. The FTC is not, 

however, required to prove intent to deceive.” FTC v. Bay 

Area Bus. Council, Inc., 423 F.3d 627, 635 (7th Cir. 

2005) (citations omitted). A misrepresentation is material if 

it makes it more likely that the consumer will choose the 

product being advertised. FTC v. Cyberspace.Com LLC, 

453 F.3d 1196, 1201 (9th Cir. 2006); FTC v. Amy Travel 

Serv., Inc., 875 F.2d 564, 573 (7th Cir. 1989). The FTC contends that CBC violated the FTCA through (1) the 

Craigslist marketing scheme that Pierce and Lloyd carried 

out and (2) the credit report websites that CBC operated. 

(Because the websites are virtually identical, the Court 

refers to “website” in the singular for ease of reference.) 

The FTC has moved for summary judgment on its allegations under the FTCA. 

1. Craigslist marketing 

First, the FTC contends the Craigslist advertising 

campaign violated the FTCA. No reasonable jury could 

find that the Craigslist scheme did not involve unfair or 

deceptive practices, as it was rife with material misrepresentations that were likely to deceive a reasonable consumer. Bay Area Bus. Council, Inc., 423 F.3d at 635. Pierce 

and Lloyd’s marketing effort consisted of two parts, both of 

which were materially misrepresentative. First, they posted to Craigslist advertisements of attractive rental properties with an e-mail address for interested renters to contact. But the properties either did not exist or the market-
71a 

ers did not have authority to rent them. Second, when an 

interested renter asked about a property, Lloyd responded 

with a form e-mail that promised a tour of the property 

once the renter obtained a credit report. But customers 

found that, credit report in hand, there was no landlord 

that would provide a tour. There is, therefore, no genuine 

dispute that the Craigslist scheme was misrepresentative. 

Moreover, the misrepresentations were material, as the 

properties themselves and the requirement that a prospective renter first obtain a credit report before touring the 

property made it more likely that a reasonable consumer 

would choose to request a credit report from CBC. Cyberspace.Com LLC, 453 F.3d at 1201. 

The FTC has established that CBC is liable for the 

Craigslist campaign carried out on its behalf; no reasonable jury could find otherwise. “Principals are liable for the 

misrepresentations of their agents under the FTC Act.” 

FTC v. Lifewatch Inc., 176 F.Supp.3d 757, 779 (N.D. Ill. 

2016) (citing FTC v. World Travel Vacation Brokers, Inc., 

861 F.2d 1020, 1029 (7th Cir. 1988)). “To bind the principal, 

the agent must have either actual authority, apparent authority, or the principal must ratify [the agent’s] actions.” 

Anetsberger v. Me. Life Ins. Co., 14 F.3d 1226, 1234 (7th Cir. 

1994). 

Although the defendants initially contested whether 

Pierce and Lloyd acted as agents with actual authority, 

apparent authority, or CBC’s ratification, they now concede 

that CBC ratified Pierce and Lloyd’s conduct by accepting 

the benefits of their efforts while aware of their misconduct. See Defs.’ Am. Reply in Supp. of Defs.’ Mot. for 

Summ. J. at 1 n.1 (“Defendants will not address the FTC’s 

argument on ratification as to CBC’s corporate liability.”). 
72a 

But even if the defendants had not conceded the point, 

the Court would find that CBC ratified Pierce and Lloyd’s 

conduct. To establish that CBC ratified the affiliates’ conduct, the FTC must demonstrate that CBC knew of the 

conduct but provided “long-term acquiescence” by accepting “the benefits of an allegedly unauthorized transaction.” Sphere Drake Ins. Ltd. v. Am. Gen. Life Ins. Co., 376 

F.3d 664, 677 (7th Cir. 2004) (internal quotation marks and 

citation omitted). No reasonable jury could find that CBC 

did not know of the affiliates’ fraudulent conduct. Consumers called to complain about the Craigslist advertisements 

and “landlord” e-mails that prompted them to enroll in 

CBC’s service, sent e-mails to the same effect, and initiated chargebacks. CBC could easily trace these complaints to 

Pierce and Lloyd’s practices. Not only could CBC track the 

traffic it received back to Pierce through an identification 

number, CBC could also determine that approximately 89 

percent of its chargebacks were attributable to Pierce’s 

traffic. 

Despite this, CBC continued to permit Pierce and 

Lloyd to market on its behalf. CBC could have terminated 

Pierce’s affiliate arrangement whenever it liked, yet it 

never did so, despite mounting complaints. Thus CBC was 

aware of the Craigslist scheme but continued to accept the 

traffic (and revenues) generated by that conduct. As Pierce 

testified, he never stopped the Craigslist ads because he 

“assumed that it was fine, because Mike Brown wanted the 

traffic. He continuously took the traffic, and I just went 

based on that[.]” D.E. 206, Defs.’ Ex. C at 74 (Pierce Dep.). 

The Court concludes there is no issue for trial on the question of agency. The Craigslist campaign was materially 

misrepresentative, and CBC ratified Pierce and Lloyd’s 

conduct. 
 

73a 

2. CBC website 

Next, the FTC contends that the website to which the 

interested renters were directed to obtain a credit report 

also violated the FTCA.2 To determine whether the website 

was misrepresentative, the Court first identifies what 

claims the website conveys. FTC v. QT, Inc., 448 

F. Supp. 2d 908, 957-58 (N.D. Ill. 2006). “In determining 

what messages or claims [the website] communicates to 

reasonable consumers, the Court looks to the overall, net 

impression made by the advertisement[.]” Id. at 958 (citing 

FTC v. Colgate-Palmolive Co., 380 U.S. 374 (1965)). Next, 

the Court determines if those claims are misrepresentative, that is, if they have a “tendency” or “capacity” to 

deceive a reasonable customer. FTC v. US Sales Corp., 785 

F.Supp. 737, 745 (N.D. Ill. 1992). “[M]isrepresentations . . . 

need not be made with an intent to deceive.” World Travel 

Vacation Brokers, 861 F.2d at 1029 (citation omitted). The 

parties dispute whether consumers must exercise reasonable care when subjected to express misrepresentations, but 

the Court need not resolve this dispute to decide the issue. 

First, the Court finds that, based on the net impression 

conveyed by the website, the website claims that consumers who enroll in the service will obtain a free credit 

score—not that they will enroll in a credit monitoring service with monthly charges. The first page that consumers 

see, the landing page, features a banner that states: “Get 

Your Free Credit Score and Report as of [the date on which 

the site was visited].” There are three panels that describe 

2

 The FTC directs the Court to the images of the websites located at 

D.E. 11, Pl.’s Ex. 4. The defendants do not contest that these are the 

proper sites to analyze; therefore, the Court restricts its analysis to 

these sites. Because the sites are virtually identical, only the eFreeScore.com images are included in Appendix 2 to this opinion. 
74a 

the offer: the left panel shows a “Sample Score”; the central panel asks the consumer to add his or her information, 

which is submitted through a button that states “Your 

Score—Now!”; and right panel describes the benefits of 

CBC’s service, which promises instant and secure access to 

one’s credit score. If the website is visited via a desktop 

computer, the website also states “Monthly membership of 

$29.94 automatically charged after trial[,]” in light gray 

text against a white background. This text is not found on 

the mobile version of the website. The landing page does 

not describe what the membership entails. If a consumer 

scrolls down the page, the website displays in small text: 

“Monitoring services may take up to 3 days to become 

active so this service within your membership may not be 

available during the whole 7-day trial period.” 

On the next page, the consumer is invited to enroll by 

completing several fields, including name, address, e-mail 

address, and phone number. The website contains two 

questions in a panel to the right of these fields: “What is a 

good Credit Score?” and “Will I find errors on my credit 

report?” Consumers are then directed to a page in which 

they may enter their payment information. The largest test 

on the page is the website logo. There is a large banner in 

black text below the logo; it reads, “Your credit score is 

ready once we confirm your identity!” Below that is a 

bright-green graphic consisting of a check mark and text 

stating “Located Credit File.” Above the fields into which 

consumers may enter payment information, the website 

requests: “Tell us which card you would like to use for your 

$1.00 refundable processing fee and membership[.]” Below 

all of the payment information is a paragraph of small-sized 

text. The paragraph begins with a heading that reads “Payment Information” and then includes the following text: 
 

 

75a 

When you place your order here you will begin your 

membership in [the website]. You will be billed $1.00 

today and start your trial membership. After your 

7-day trial period you will be charged $29.94 every 

month. If you wish to cancel just call us at [the customer service number] to stop your membership. 

D.E. 11, Pl.’s Ex. 4 at 15, 43, 65. Consumers may complete 

the transaction by clicking a large, orange button with 

“Submit & Continue” superimposed over it. There is no 

description of what membership entails. 

Although CBC contends that the membership disclosures are sufficient to change the website’s impression, 

courts routinely hold that explanatory text is insufficient to 

cure a misleading description unless the text changes the 

overall impression. See Cyberspace.Com, 453 F.3d at 

1200-01; Porter & Dietsch, Inc. v. FTC, 605 F.2d 294, 301 

(7th Cir. 1979). Here, the net impression is that consumers 

are signing up to obtain a free credit score, not enrolling 

into a costly monthly service.3 The website lacks any description of the monthly membership; consumers can discern that submitting payment information will enroll them 

in the membership only by reviewing text that is smaller 

and less noticeable than the surrounding text. In FTC v. 

Johnson, 96 F.Supp.3d 1110 (D. Nev. 2015), the court considered a website that prominently advertised the customer’s ability to access grant money and a free CD. Id. at 

3

 Indeed, the Court could not put it much better than the defendants 

do: “The overall net impression created by the website is that the 

consumer is signing up for a free credit score and can cancel within 

seven (7) days [if] they don’t want to continue the service.” Defs.’ Resp. 

to Pl.’s Mot. for Summ. J. at 20. Notably absent from this impression is 

any sense of what service CBC will render through a monthly subscription. 
76a 

1141. The website actually signed the consumer up for a 

membership program, but “[c]laims about grant money 

and free CDs always overwhelm these brief mentions of . . . 

memberships[.]” Id. The Court concludes that CBC’s website presents a similar situation, in which “brief mentions” 

of a costly service are “overwhelm[ed]” by other advertising. No reasonable jury could conclude that the website 

conferred the net impression that consumers were enrolling in a monthly credit monitoring service. 

Because the website claimed that consumers were obtaining a free credit score and report, not a membership in 

a monthly credit monitoring service, the website was misrepresentative. Moreover, this was a material misrepresentation, as consumers would be less likely to enroll if they 

knew they were signing up for a $29.94 monthly service of 

unknown utility instead of than a free credit score and 

report. No reasonable jury could find otherwise. 

Further buttressing this conclusion is the pervasive evidence of consumer confusion. Proof of actual deception is 

“highly probative” evidence of a misleading or deceptive 

practice. Cyberspace.Com, 453 F.3d at 1201. See also Bay 

Area Bus. Council, 423 F.3d at 635 (considering evidence of 

consumer confusion in analyzing an FTCA violation); Amy 

Travel Serv., 875 F.2d at 575 (same). The FTC has offered a 

variety of evidence indicating consumers did not realize 

they had enrolled in a monthly credit monitoring service 

until they found CBC charges on their bank statements. 

Defs.’ Resp. to Pl.’s Stmt. of Facts ¶ 61. Numerous consumers provided declarations that generally described 

their experience requesting a free credit score and noticing 

an unexpected $29.94 charge several days later. Id. Many 

customers also asked their credit card company to reverse 

CBC charges, which is known as a “chargeback.” Since 
77a 

December 2015, CBC has had over 10,000 chargebacks. 

Id.¶ 73. The reasonable inference from these chargebacks 

is that consumers did not realize they enrolled in a monthly 

membership service and, when they saw the membership 

charges, asked the credit card company to withdraw the 

payment. Amy Travel Serv., 875 F.2d at 574-75 (noting that 

“excessive credit card chargebacks” are a “signal[ ]” of 

consumer “trouble”). 

The defendants propose a different inference: that all of 

these customers were engaged in “friendly fraud,” in which 

they purposefully signed up CBC’s services and then falsely claimed deception in order to get out of paying for the 

membership services for which they had enrolled. But the 

CBC presents no admissible evidence that would support 

this proposition, and the Court does not consider the 

“friendly fraud” theory to be the sort of reasonable inference to which CBC is entitled as the non-moving party. The 

defendants also note that there is evidence that some customers knew they were expected to pay a $1 processing fee 

for their credit report. Because this notice was contained in 

the same paragraph as one of the notices of the credit 

monitoring service, the defendants conclude that some 

customers knew of the credit monitoring service. But the 

requirement is not that “every customer” was deceived by 

the defendant, just “that some customers actually misunderstood the thrust of the message.” World Travel Vacation Brokers, 861 F.2d at 1029. The Court concludes that 

the FTC is entitled to summary judgment. 

B. ROSCA 

Under ROSCA, it is unlawful to charge consumers using a negative option feature unless the seller satisfies 

certain requirements. A negative option feature is “a provision [in an offer] under which the customer’s silence or 
 

 

78a 

failure to take an affirmative action to reject goods or 

services or to cancel the agreement is interpreted by the 

seller as acceptance of the offer.” 16 C.F.R. § 310.2(w). The 

seller must establish that (1) the material terms of the 

transaction are “clearly and conspicuously” disclosed and 

(2) the seller obtains the consumer’s “express informed 

consent.” 15 U.S.C. § 8403.4

 ROSCA also establishes that a 

violation of the statute is also a violation of a rule promulgated under the FTCA. Id. § 8404(a). CBC employed a 

negative option feature, as consumers who requested their 

free credit report had seven days to opt out of the credit 

monitoring program before they were enrolled. The FTC 

contends that it is entitled to summary judgment, as no 

reasonable jury could find that the disclosure of the negative option feature was clear and conspicuous or that CBC 

obtained consumers’ express informed consent. 

But CBC contends that it is entitled to summary judgment, as Brown designed CBC’s website by reference to 

another site created through an FTC consent decree. The 

Court disagrees with the premise of CBC’s argument, that 

an attempt to conform to conduct approved under a consent decree renders the conduct lawful. “The entering of a 

consent decree . . . is not a decision on the merits and 

therefore does not adjudicate the legality of any action by a 

party thereto.” Beatrice Foods Co. v. FTC, 540 F.2d 303, 

312 (7th Cir. 1976). Rather than analyze whether CBC’s 

website is sufficiently similar to this other website, the 

Court determines if any reasonable jury could find that 

CBC satisfied ROSCA’s requirements. 

In ROSCA, Congress did not define what satisfies the 

requirement of “clear[ ] and conspicuous[ ] disclos[ure]” of 

4

 ROSCA also includes a third element that is not at issue in this case. 
79a 

“all material terms of the transaction.” 15 U.S.C. § 8403. 

But other courts have routinely noted that that a disclosure 

in small type is unlikely to be clear or conspicuous when 

accompanied by type that is larger, bolded, or italicized. 

Murray v. New Cingular Wireless Servs., Inc., 523 F.3d 

719, 725 (7th Cir. 2008) (small type is not conspicuous when 

“the bulk of the page contains much larger type”); Cole v. 

U.S. Capital, 389 F.3d 719, 730 (7th Cir. 2004) (text that 

“appears to be designed to ensure minimal attention by the 

reader” is not clear or conspicuous); FTC v. Health Formulas, LLC, No. 2:14-cv-01649-RFB-GWF, 2015 WL 2130504, 

at *17 (D. Nev. May 6, 2015) (disclosures of a negative 

option were not clear or conspicuous, as the disclosures 

were “either buried in fine print on the payment page of 

Defendants’ websites or stated in separate Terms and 

Conditions documents”). As discussed above, CBC embedded its disclosures into pages with larger, bolded text that 

promised “free” credit reports and scores. The disclosures 

were not prominent when compared to the rest of the page. 

Indeed, the disclosures appear “designed to ensure minimal attention by the reader.” Cole, 389 F.3d at 730. For this 

reason, the Court is unconvinced by CBC’s repeated mention that the text was in twelve-point font: the analysis of 

the disclosure is necessarily contextual, meaning that the 

Court must consider the text, whatever size it is, in relation 

to the other elements on the page. The FTC is entitled to 

summary judgment; no reasonable jury could find that the 

disclosures were clear and conspicuous. 

ROSCA also requires CBC to obtain a consumer’s “express informed consent” before entering into a negative 

option. CBC contends that it can satisfy this standard, as a 

consumer is notified of the negative option at three points: 

on the landing page, the payment page, and in a welcome e-
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mail to those who enroll. The welcome e-mail is obviously 

unhelpful to CBC’s case, as that e-mail follows the transaction, so it cannot affect whether the consumer rendered 

express informed consent before entering into the negative 

option. 

CBC’s remaining contentions are also insufficient. The 

Court concludes that summary judgment is warranted 

where, as here, the website is virtually devoid of any mention of the service aside from the statement that the customer is to be billed for it. Except for a handful of disclosures that the consumer will be enrolled in a service that 

costs $29.94 per month, the consumer would not know that 

CBC was offering a service. And there is no description of 

what the service constitutes or why it is beneficial. A website that fails to provide a consumer any information about 

a service cannot obtain a consumer’s express informed 

consent to purchase that service. CBC suggests that credit 

monitoring was a “bonus” for consumers, but the Court 

overrules this rather odd argument. If credit monitoring 

was a “bonus” that CBC had not promised consumers, then 

consumers could not have expressly consented to be billed 

for a service they had not been told about. 

In sum, the FTC is entitled to summary judgment on 

its ROSCA claim because no reasonable jury could find 

that CBC “clearly and conspicuously” disclosed that the 

site involved a negative option transaction or that consumers rendered their express informed consent. 

C. Free Credit Report Rule 

The FTC also brings a claim under the Free Credit Report Rule, which requires any advertisement for a free 

credit report to disclose that a consumer may obtain a free 

credit report annually as of right under federal law. 

15U.S.C. § 1681j(g)(1); 12 C.F.R. § 1022.138. Because it is 
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undisputed that there was no notice of the as-of-right annual free credit report, the only question before the Court 

is whether CBC advertised a free credit report. 

Given that CBC website contained a banner advertising 

a “free credit score and report,” one could justifiably ask 

what there is to discuss. But the defendants present two 

arguments against the application of the Free Credit Report Rule. First, the defendants contend that the formatting of their advertisement of a “free credit score and 

report” places their site outside the reach of the Rule. They 

note that the text is split into two lines and that the text is 

colored differently: “free credit score” is in orange text, but 

“and report” is in black text. CBC contends there is a clear 

implication: the black lettering of “report” indicates that it, 

unlike the orange-lettered “free credit score,” is not free. 

But the defendants’ proposed “black-letter” rule runs 

smack into the reality of actual black-letter law. Under 

“generally accepted rules of syntax,” an initial modifier 

applies to each noun or phrase in a conjunctive series. 

Wash. Educ. Ass’n v. Nat’l Right to Work Legal Def. 

Found., Inc., 187 F. App’x 681, 682 (9th Cir. 2006) (citing 

The American Heritage Book of English Usage ch. 2 ¶ 10 

(Houghton Mifflin 1996)). Any reasonable consumer would 

read “free” as modifying both “credit score” and “report,” 

no matter the color of the text or its formatting. 

Next, CBC argues that the Free Credit Report Rule 

applies to advertisements of free credit reports alone; it 

does not apply to advertisements of CBC’s services, which 

include a credit report, score, and credit monitoring service. The defendants argue that the FTC, while promulgating the relevant rule, rejected the use of the term “consumer report” because it swept broadly enough to include 

credit scores. See Free Annual File Disclosures, 75 Fed. 
82a 

Reg. 9725, 9732 (Mar. 3, 2010) (originally to be codified at 

16 C.F.R. § 610, now codified at 12 C.F.R. § 1022.130). Because the FTC purposefully excluded ads for free credit 

scores from the scope of the Free Credit Report Rule, their 

service—which includes access to a credit score—is also 

outside the scope of the Rule. But the FTC, in adopting the 

rule, expressly addressed and rejected this argument: 

Several commenters urged the Commission to clarify that section 610.4 does not apply to advertisements for every bundle of products or services that 

may include a “free credit report.” . . . The Commission disagrees that the types of bundled products do 

not cause consumer confusion. Indeed, the Commission believes that advertising for bundled products 

that promote free credit reports, in addition to other products and services, such as credit monitoring, 

is the very type of advertising that is likely to confuse consumers. 

Id. at 9733 (emphasis added). CBC’s service is therefore 

within the ambit of the Free Credit Report Rule. 

In their reply brief, the defendant raised two additional 

arguments against the application of the Free Credit Report Rule: the FTC was required to first issue a cease-anddesist letter before suing under the Rule, and any violation 

of the Rule is without damages. “[A]rguments raised for 

the first time in the reply brief are waived.” Mendez v. 

Perla Dental, 646 F.3d 420, 423-24 (7th Cir. 2011). The 

Court concludes that FTC is entitled to summary judgment on its Free Credit Report Rule claim. 

Although the defendants have asserted in their summary judgment briefing several of the defenses they raised 

in their answer, their briefs do not discuss at least four: the 

FTC’s failure to mitigate; standing; mootness; and bad 
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faith/unclean hands. First Am. Answer at 7-11. Particularly 

when the FTC has presented unrebutted arguments 

against these defenses, the Court is not required to “construct arguments regarding the Defendants’ affirmative 

defenses.” Ramada Franchise Sys., Inc. v. Royal Vale 

Hosp. of Cincinnati, Inc., No. 02 C 1941, 2005 WL 435263, 

at *10 (N.D. Ill. Feb. 16, 2005). The Court finds the defendants cannot defeat summary judgment through these defenses. 

In sum, the Court concludes that the FTC is entitled to 

summary judgment on each of its claims brought under the 

FTCA, ROSCA, and the Free Credit Report Rule. 

II. Brown’s personal liability 

The next issue is whether Brown is personally liable for 

the conduct for which CBC is liable. To establish Brown’s 

personal liability, the FTC must prove three elements: (1) 

CBC’s corporate liability (which the Court has just found); 

(2) Brown’s knowledge of the practices; and (3) Brown’s 

control over or direct participation in the practices at issue. 

Amy Travel Serv., 875 F.2d at 573. The FTC can satisfy the 

knowledge element by presenting “evidence that the individuals had actual knowledge of material misrepresentations, reckless indifference to the truth or falsity of such 

misrepresentations, or an awareness of a high probability 

of fraud along with an intentional avoidance of the truth.” 

Bay Area Bus. Council, 423 F.3d at 636 (internal quotation 

marks and citations omitted). 

The FTC’s claims rest on two practices or acts. First is 

the creation of the CBC websites, which contain misrepresentations about the monthly subscription service. No 

reasonable jury could find that Brown did not know of 

these misrepresentations, as he wrote and edited the contents of the websites. Brown also controlled the practice in 
84a 

question: he owned, operated, and controlled the websites 

at issue, as he was the sole member, managing director, and 

owner of CBC. Pl.’s Resp. to Defs.’ Stmt. of Facts ¶ 3. 

Brown is personally liable for the violations associated with 

this conduct. 

Second is the Craigslist marketing scheme, in which 

Pierce and Lloyd posted false Craigslist advertisements of 

attractive rental properties and required interested customers to obtain credit reports through CBC websites. The 

Court concludes that there is no genuine issue for trial 

here; the evidence is such that no reasonable jury could not 

find that Brown was not, at the very least, recklessly indifferent towards or intentionally ignorant of the truth. Bay 

Area Bus. Council, 423 F.3d at 636. 

Pierce and Lloyd sent e-mails purportedly from landlords to induce interested customers to request their credit 

reports through CBC; Brown admits he knew that Pierce 

and Lloyd did not have any relationship with actual landlords. But Brown claims that it does not follow that he 

knew that Lloyd’s e-mails were false. Rather, Brown argues he believed that Lloyd was acting as an affiliate for 

others who wanted to rent out their properties, just as 

Pierce acted as an affiliate for CBC. 

But this argument cannot account for the numerous 

signals Brown that received indicating that Pierce and 

Lloyd were not acting on behalf of actual landlords or 

advertising real properties. Brown received an e-mail on 

April 29, 2015 from a contractor who “happened to notice 

this fake ad for apartment to get credit report”, Defs.’ 

Resp. to Pl.’s Stmt. of Facts ¶ 81; a forwarded e-mail from 

a person who “flagg[ed] for removal vast number of fake 

ads your people are putting on Craiglist [sic] . . . I have also 

been in contact with more than several of the legitimate 
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rental properties that you are using as bait to entice people 

to come to your site,” id. ¶ 82; an e-mail on September 17, 

2015 from his customer service contractor regarding complaints about the Craigslist postings, id.; and an e-mail on 

November 15, 2015 from a company asking for removal of 

its logo from CBC’s website, given its “deceptive listings” 

on Craigslist, id. ¶ 89. 

Additionally, Brown was aware of the campaign’s 

fraudulent character through the voluminous consumer 

complaints that CBC received via customer calls, id. ¶ 57; 

e-mails, id. ¶ 58; and credit card chargebacks. Id. ¶ 72 

(noting that 72 percent of the 16,828 chargebacks were 

attributable to Pierce). Brown contends he was not told 

about these complaints, but the Court finds that argument 

particularly weak, as the evidence shows that Brown specifically requested his customer service contractor not to 

escalate real estate-related customer complaints to him. 

Id. ¶ 84. “To claim ignorance in the face of the consumer 

complaints . . . amounts to, at the least, reckless indifference to the corporations’ deceptive practices.” Bay Area 

Bus. Council, 423 F.3d at 638. 

Still, Brown downplays the significance of all of this evidence through a variety of arguments: Pierce and Lloyd’s 

e-mails were not obviously false, given their purported 

relationship with a real estate website known as RentFind; 

the e-mails Brown received from others about the 

Craigslist campaign were not adequately specific to notify 

him of fraud; the consumer complaints were not properly 

forwarded to him; and some of the consumer complaints 

appeared (to him) to be mere “friendly fraud.” But, taken 

together, no reasonable jury could consider all of this evidence without finding that Brown, having received all these 

signals of fraud, was either recklessly indifferent toward or 
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intentionally ignorant of Pierce and Lloyd’s fraudulent 

practices. 

Brown not only knew about the Craigslist scheme; he 

had the ability to control it. As the chief officer of CBC, 

Brown had “[a]uthority to control the company,” given his 

“active involvement in business affairs.” Amy Travel Serv., 

875 F.2d at 573. Brown may contend he could not control 

Pierce or Lloyd but, through the click of a button, Brown 

had the ability to stop receiving the customers that they 

referred. As Brown testified, “I’m able to tell Pierce and 

set limits on how much I want to accept. It’s my business, 

my website.” Id. ¶ 100. As in Bay Area Business Council, 

in which the Seventh Circuit held the defendant personally 

liable in part because he personally controlled who would 

conduct telemarketing, the Court holds Brown personally 

liable because he controlled whether Pierce and Lloyd 

could continue their conduct. Bay Area Bus. Council, 423 

F.3d at 637. The Court concludes that the FTC is entitled 

to summary judgment on the question of Brown’s personal 

liability. 

III. Injunctive relief 

The FTC has requested equitable relief in the form of a 

permanent injunction against CBC and Brown and equitable monetary relief. The Court reviews each request in turn. 

A. Permanent injunction 

Under 15 U.S.C. § 53(b), the FTC may seek a permanent injunction to restrict a defendant from future violations of the FTCA. To obtain a permanent injunction, “the 

moving party need only show that there is a reasonable 

likelihood of future violations in order to obtain relief.” 

SEC v. Holschuh, 694 F.2d 130, 144 (7th Cir. 1982). This 

standard is distinct from the ordinary standard for injunc-
87a 

tive relief. CFTC v. Hunt, 591 F.2d 1211, 1220 (7th Cir. 

1979). In assessing whether there is a reasonable likelihood 

of future violations, the Court must consider (1) the gravity 

of the harm, (2) the extent of CBC and Brown’s participation, (3) the nature of the infraction and the likelihood that 

they may become involved in similar conduct in the future; 

(4) any recognition of culpability; and (5) the sincerity of 

assurances against further violations. Holschuh, 694 F.2d 

at 144; Hunt, 591 F.2d at 1220. 

The Court finds a reasonable likelihood of future violations. First, the gravity of the harm was significant, as 

CBC and Brown’s deceptive practices caused customers to 

lose millions of dollars on an unwanted service and to needlessly expose their sensitive personal and financial information, including their credit card and Social Security 

numbers. Moreover, both CBC and Brown were deeply 

involved in these practices. Third, CBC and Brown’s ongoing participation in the credit information industry increases the likelihood that similar conduct could occur 

again, as these schemes are easy to facilitate. The Court 

notes that, after the onset of this litigation, it held Brown in 

contempt for violating the preliminary injunction, which 

barred him from, among other things, operating a website 

with a negative option feature without first obtaining express informed consent, processing payments from CBC 

customers, or transacting any business as CBC. See D.E. 

106. Though Brown argues that he was misadvised by 

attorneys when he engaged in this conduct, the Court only 

relies on this fact to show the ease with which parties can 

engage in this conduct, not to show Brown’s scienter. 

Finally, Brown’s ongoing litigation of this claim in the 

face of significant contrary evidence—and the assertion 

that it is the consumers who engaged in misconduct 
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through “friendly fraud”—undercuts any belated recognition of culpability or assurance that similar misconduct will 

not happen again. The Court concludes that a permanent 

injunction against CBC and Brown is proper. 

Brown argues that the FTC’s proposed injunction 

should be narrowed in two ways. First, he contends that 

the injunction should not apply to all of CBC’s websites, 

just those created to receive traffic referred from Pierce 

and Lloyd. Brown also contends that he should not be 

enjoined, as he was fooled by Pierce and Lloyd into believing the properties existed, just like CBC’s dissatisfied 

customers. The Court declines to narrow the injunction in 

either respect. First, the injunction should extend to all 

sites, as the Court has found a reasonable likelihood of 

future violations, and any site could be used to facilitate a 

similar scheme. Second, as already discussed, no reasonable jury could find that Brown did not know of, and have 

control over, Pierce’s practices. Just because it was Pierce 

and Lloyd who directly facilitated the Craigslist marketing 

does not mean that Brown should escape an injunction. 

Brown has not presented a viable reason that he should not 

be subject to a permanent injunction. 

B. Equitable monetary relief 

In addition to the permanent injunction, the FTC seeks 

relief from CBC and Brown in the amount of consumer losses. “The district court’s power to grant a permanent 

injunction also includes the power to grant other ancillary 

relief,” which “includes the power to order repayment of 

money for consumer redress as restitution or [rescission].” 

FTC v. Febre, 128 F.3d 530, 534 (7th Cir. 1997) (citing Amy 

Travel Serv., 875 F.2d at 571). In line with substantial precedent, the Court concurs with the FTC and orders equitable relief in the amount of consumer losses. See, e.g., FTC 
89a 

v. Trudeau, 579 F.3d 754, 771 (7th Cir. 2009) (“Consumer 

loss is a common measure for civil sanctions in contempt 

proceedings and direct FTC action”); Febre, 128 F.3d at 536 

(“A major purpose of the Federal Trade Commission Act is 

to protect consumers from economic injuries. Courts have 

regularly awarded, as equitable ancillary relief, the full 

amount lost by consumers.”) (citation omitted); Amy Travel Serv., 875 F.2d at 571-72 (same). 

CBC and Brown introduce an array of arguments 

against the FTC’s position, which the Court groups into 

four contentions: the Court lacks the authority to order 

restitution; the FTC cannot trace the funds, which it must 

do to obtain restitution; the FTC’s proposed relief would 

violate the Eighth Amendment’s prohibition on excessive 

fines and fees; and the FTC has overstated the amount of 

losses. 

First, CBC and Brown contend that the FTC has requested restitution, but the Court lacks authority under 

section 13(b) of the FTCA, 15 U.S.C. § 53(b), to provide 

this relief. Section 13(b) only authorizes the Court to “enjoin any such act or practice” that violates the FTCA. CBC 

and Brown contend that this provision does not expressly 

encompass restitution and that the Supreme Court case 

law that authorized a broad interpretation of this language 

has been undercut. CBC and Brown concede that the 

Court “has previously ruled on and generally denied” this 

contention, but they contend that, had the Court fully 

considered the legislative history or the text of section 

13(b), it would have found in favor of this argument. Defs.’ 

Resp. to Pl.’s Mot. for Summ. J. at 23. The Court disagrees. 

CBC and Brown still rely upon what this Court already 

described as a “considerable overstatement” of Kokesh v. 

SEC, 137 S.Ct. 1635 (2017). See D.E. 183 at 2 (Order on 
90a 

Defs.’ Mot. to Modify Prelim. Inj.). The plain language and 

legislative history arguments do not change the Court’s 

view on this point, especially in light of the Seventh Circuit 

authority that continues to control the disposition of this 

issue before this Court. See, e.g., Trudeau, 579 F.3d at 772; 

Febre, 128 F.3d at 534; Amy Travel Serv., Inc., 875 F.2d at 

571-72. 

Next, CBC and Brown contend that the FTC’s request 

for “equitable monetary relief ” is a request for restitution. 

But, CBC and Brown contend, restitution is unavailing, as 

the FTC must be able to trace the funds it identifies for 

restitution, and here the funds have been commingled. 

CBC and Brown urge the Court to consider several cases 

in which courts declined to order restitution because the 

funds requested were not traceable. See, e.g., Montanile v. 

Bd. of Trustees of Nat. Elevator Indus. Health Benefit 

Plan, 136 S.Ct. 651, 658, 662(2016) (remanding restitution 

order in ERISA litigation to determine whether funds 

were dissipated); Alexander v. Bosch Auto. Sys., Inc., 232 

F. App’x 491, 501 (6th Cir. 2007) (“Plaintiffs seeking equitable restitution have the burden of establishing that the 

funds they seek are traceable and readily identifiable.”). 

But CBC and Brown elide a significant distinction between the cases cited and the present case. When restitution is ordered as an equitable remedy, it is “directed 

against some specific thing; they give or enforce a right to 

or over some specific thing.” Montanile, 136 S.Ct. at 658-

59. CBC and Brown rely primarily on ERISA cases in 

which plaintiffs seek to reclaim benefits from a defunct 

employer. ERISA is distinguishable from the FTCA in a 

significant way: ERISA only authorizes equitable restitution, not legal restitution. The FTCA authorizes legal restitution, which does not impose the same tracing require-
91a 

ments. FTC v. Commerce Planet, Inc., 815 F.3d 593, 601 

(9th Cir. 2016) (“the tracing requirements for ‘equitable’ 

restitution do not apply in § 13(b) actions”); FTC v. Bronson Partners, LLC, 654 F.3d 359, 373-74 (2d Cir. 2011) (in 

ordering monetary relief under the FTCA, a district court 

need not “apply equitable tracing rules to identify specific 

funds in the defendant’s possession that are subject to 

return”). CBC and Brown contend that these cases are not 

convincing, as they have been undercut by Kokesh. But, as 

the Court has already noted, it has rejected this reading of 

Kokesh; the Court need not interrogate it in greater depth. 

The Court concludes that, even if the funds at issue were 

commingled with other CBC funds, the FTC is not barred 

from obtaining restitution. 

Third, Brown contends that the permanent injunction 

and the proposed restitution would violate his Eighth 

Amendment rights. But the order of restitution is not a 

“fine,” nor would it be “grossly disproportional,” as Brown 

must show to establish an Eighth Amendment violation. 

See United States v. Bajakajian, 524 U.S. 321, 339-40 

(1998). Brown cites to SEC v. Metter, 706 F. App’x 699 (2d 

Cir. 2017), but the case is not helpful to his position, as the 

Second Circuit concluded there was no Eighth Amendment 

violation in an order that “almost precisely equaled the 

gains from the illicit conduct.” Id. at 704. Here, the FTC’s 

proposed order is also “directly keyed” to Brown’s misconduct. Id. The Court overrules Brown’s Eighth Amendment 

argument. 

Finally, CBC and Brown challenge how the FTC calculated the amount of losses. The FTC began its calculation 

with the amount of revenue obtained through traffic that 

Pierce directed to CBC: $6,832,435.81. The FTC subtracted 

the amount of refunds CBC paid to customers ($414,860.77), 
 

92a 

chargebacks that customers successfully obtained 

($394,903.68), and the amount already paid by Pierce and 

Lloyd in settlement of their claims ($762,000), for a net of 

$5,260,671.36. CBC and Brown present several arguments 

against this amount. 

First, they contend that the revenues must be limited to 

the period beginning after CBC created websites to which 

Pierce could direct his traffic. The Court disagrees: the 

amount of liability is based on the duration of the campaign 

of misrepresentation conducted through the Craigslist 

marketing scheme, not the existence of certain websites. 

The date on which certain websites became active is irrelevant to the calculation.5 

Next, CBC and Brown contend that the amount of restitution should be limited to the customers referred by 

Pierce. The description of how the FTC calculated losses 

refutes this argument; the losses are already based on 

revenue obtained through traffic that Pierce referred. 

Third, they contend that the FTC should deduct the 

revenue obtained from customers who contacted CBC’s 

customer service but then chose not to cancel their credit 

membership. The FTC argues that a setoff would be inappropriate, as CBC lied to customers about its involvement 

in the Craigslist marketing scheme. See, e.g., Defs.’ Resp. 

to Pl.’s Stmt. of Facts ¶ 60 (recording of a CBC customer 

service employee telling a customer, “We don’t . . . do any 

Craigslist posts. . . . [W]e’re not affiliated with any third 

party companies posting any rental ads or anything like 

5

 Defendants arguably raise an additional point in their reply brief 

asking the Court to dismiss any claims relating to CBC’s “pre-existing” 

websites. Defs.’ Am. Reply in Supp. of Defs.’ Mot. for Summ. J. at 8. 

This argument is underdeveloped and, to the extent it is a new point, 

defendants forfeited it by failing to raise it in the initial brief. 
93a 

that.”). The Court concurs: CBC and Brown are not entitled to keep the revenue obtained from customers who 

were retained through additional misrepresentations. 

Fourth, CBC and Brown contend that the losses should 

be limited to the period during which Brown had actual 

notice of the purported scheme. They contend that Brown 

did know of the fraudulent marketing until he saw complaints from the Better Business Bureau on June 30, 2016. 

CBC and Brown’s argument is unpersuasive. First, they do 

not point to any authorities supporting the premise that 

liability can only attach to particular losses of which the 

defendant was specifically aware; the Seventh Circuit only 

requires that a defendant be “adequately alerted . . . to the 

corporation’s deceptive trade practices.” Bay Area Bus. 

Council, 423 F.3d at 637. But no reasonable jury could 

conclude that Brown only learned of Pierce’s campaign on 

June 30, 2016. As the record makes clear, Brown was emailed in April 2015—just months after the campaign 

began—by a contractor with concerns about the campaign. 

As already discussed, this e-mail was joined by numerous 

other signs of misconduct, all of which occurred well before 

June 30, 2016. The Court declines to reduce the loss figure 

on this ground. 

CBC and Brown also ask the Court to set off business 

expenses and the loss of CBC revenues. But restitution 

seeks to protect consumers from “economic injuries” by 

recovering the full amount of consumer loss. Febre, 128 

F.3d at 536. The Court does not think it appropriate to 

reduce consumer recovery in order to compensate the 

defendants for the costs of administering a service that 

relied upon misrepresentations to consumers. 
94a 

Conclusion 

For the foregoing reasons, the Court grants the FTC’s 

motion for entry of summary judgment against Credit 

Bureau Service, LLC and Michael Brown [dkt. no. 192]. 

The Court will separately enter the FTC’s proposed final 

judgment and order. The status hearing set for June 29, 

2018, the final pretrial conference set for July 12, 2018, and 

the trial set for July 16, 2018 are vacated. 
95a 

APPENDIX I 

Hello, 

Thank you for wanting more information on our rental. 

You were the second to e-mail from our advert. The first 

person I showed did not need to move due to school. We 

just finished all new renovations and are now prepared to 

lease with flexible terms. 

I know that you need the exact address of the property 

but we do want not to disclose the address before you’re 

qualified. We have had a string of break-ins, squatters and 

thefts at our other properties. We want to avoid that with 

this rental because of the renovations that have cost lots of 

money. 

We have plenty of garage parking and utilities are factored into the rent price. The appliances in the kitchen and 

laundry room are yours to keep. You have the option to 

customize your paint color and flooring prior to your arrival. 

If you would like to set up an appointment, go to the 

link below and request a copy of your report. We use this 

site since it’s trusted, quick and haven’t had any problems 

printing out the report. All you need to do is fill out the 

form and you get your report. We are not concerned with 

any negatives, its more of a formality for us. Simply get 

your report by CLICKING HERE 

Do not send me the report over email, bring it to the 

tour. We want to rent fast. We are waiving the security 

deposit and giving half the first months rent. 

Let me know when you have an updated version of your 

report. Then I’ll schedule you for a showing. 

Thanks again, 

Joyce 
 

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APPENDIX II 
 

97a 
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99a 

 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

FEDERAL TRADE COMMISSION, 

Plaintiff(s), 

v. 

CREDIT BUREAU CENTER, LLC, ET AL., 

Defendant(s). 

————— 

Case No. 17 C 194 

Judge Matthew F. Kennelly 

—————— 

JUDGMENT IN A CIVIL CASE 

Judgment is hereby entered (check appropriate box): 

 in favor of plaintiff(s) and against defendant(s) in 

the amount of $ , 

 which  includes pre–judgment interest. 

 does not include pre–judgment interest. 

Post-judgment interest accrues on that amount at the 

rate provided by law from the date of this judgment. 

Plaintiff(s) shall recover costs from defendant(s). 

—————— 

 in favor of defendant(s) and against plaintiff(s). 

Defendant(s) shall recover costs from plaintiff(s). 

—————— 

 other: Judgment entered in favor of plaintiff Federal 

Trade Commission and against defendants Credit Bureau 

center, LLC and Michael Brown as stated in the attached 

Final Judgment and Order for Permanent Injunction and 

Other Equitable Relief. 

—————— 

This action was (check one): 

101a 
102a 

 tried by a jury with Judge presiding, and the jury 

has rendered a verdict. 

 tried by Judge without a jury and the above decision 

was reached. 

 decided by Judge Matthew F. Kennelly on a motion. 

Date: 6/26/2018 Thomas G. Bruton, Clerk of Court 

 Pamela J. Geringer, Deputy Clerk 
 

 

 

 

 

 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

————— 

Judge Matthew F. Kennelly 

————— 

FEDERAL TRADE COMMISSION, 

Plaintiff 

v. 

CREDIT BUREAU CENTER, LLC, A LIMITED LIABILITY 

COMPANY, FORMERLY KNOWN AS MYSCORE LLC, ALSO 

DOING BUSINESS AS EFREESCORE.COM, 

CREDITUPDATES.COM, AND FREECREDITNATION.COM, 

MICHAEL BROWN, INDIVIDUALLY AND AS OWNER AND 

MANAGER OF CREDIT BUREAU CENTER, LLC, 

DANNY PIERCE, INDIVIDUALLY, AND 

ANDREW LLOYD, INDIVIDUALLY, 

Defendants. 

————— 

Case No. 17 C 194 

JUDGE KENNELLY 

MAGISTRATE JUDGE VALDEZ 

————— 

FINAL JUDGMENT AND ORDER FOR PERMANENT 

INJUNCTION AND OTHER EQUITABLE RELIEF 

AGAINST DEFENDANTS CREDIT BUREAU 

CENTER, LLC AND MICHAEL BROWN 

Plaintiff, the Federal Trade Commission (“Commission” 

or “FTC”), filed its Complaint for Permanent Injunction 

and Other Equitable Relief (“Complaint”), pursuant to 

Section 13(b) of the Federal Trade Commission Act (“FTC 

Act”), 15 U.S.C. § 53(b). The FTC now having filed its 

Motion for Summary Judgment Against Defendants Credit 

103a 
104a 

Bureau Center, LLC and Michael Brown (“Defendants”), 

and the Court having considered the FTC’s motion, and 

supporting exhibits, and the entire record in this matter, 

the FTC’s motion is hereby granted, and IT IS HEREBY 

ORDERED, ADJUDGED, AND DECREED as follows: 

FINDINGS 

1. This Court has jurisdiction over this matter. 

2. The Complaint charges that Defendants participated 

in deceptive and illegal acts or practices in violation of 

Section 5 of the FTC Act, 15 U.S.C. § 45; Section 4 of the 

Restore Online Shoppers’ Confidence Act (“ROSCA”), 15 

U.S.C. § 8403; Section 612(g) of the Fair Credit Reporting 

Act (“FCRA”), 15 U.S.C. § 1681j(g); and the Free Annual 

File Disclosures Rule, 16 C.F.R. Part 610 (“Free Reports 

Rule”), recodified at 12 C.F.R. §§ 1022.130-1022.138, in the 

advertising, marketing, promoting, offering for sale, or sale 

of credit monitoring services. 

3. The Court now finds that Defendants have violated 

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), by falsely 

representing to consumers, expressly or by implication, 

that a residential property described in an online ad is 

currently available for rent from someone consumers can 

contact through that ad, and the property will be shown to 

consumers who obtain their credit reports and scores 

through Defendants’ website. 

4. The Court further finds that Defendants have violated Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), by representing to consumers, expressly or by implication, that 

they are offering consumers their credit scores and reports 

for free, while failing to disclose or disclose adequately to 

consumers, material terms and conditions of the offer, 

including: (a) that Defendants will automatically enroll 

consumers in a negative option continuity plan with addi-
105a 

tional charges; (b) that consumers must affirmatively cancel the negative option continuity plan before the end of a 

trial period to avoid additional charges; (c) that Defendants 

will use consumers’ credit or debit card information to 

charge consumers monthly for the negative option continuity plan; (d) the costs associated with the negative option 

continuity plan; and (e) the charges. 

5. The Court further finds that Defendants have violated Section 4(1) of ROSCA, 15 U.S.C. § 8403(1), by charging 

or attempting to charge consumers for Defendants’ credit 

monitoring service through a negative option feature while 

failing to clearly and conspicuously disclose all material 

terms of the transaction before obtaining consumers’ billing information. 

6. The Court further finds that Defendants have violated Section 4(2) of ROSCA, 15 U.S.C. § 8403(2), by charging 

or attempting to charge consumers for Defendants’ credit 

monitoring service through a negative option feature while 

failing to obtain consumers’ express informed consent 

before charging their credit card, debit card, bank account, 

or other financial account. 

7. The Court further finds that Defendants have violated Section 612(g)(1) of the FCRA, 15 U.S.C. § 1681j(g)(1), 

and the Free Reports Rule, 12 C.F.R. § 1022.138, by failing 

to prominently disclose in advertisements for free credit 

reports that free credit reports are available under federal 

law from AnnualCreditReport.com or (877) 322–8228, and 

by operating websites offering free credit reports, including eFreeScore.com and CreditUpdates.com, without displaying across the top of each page that mentions free 

credit reports, and across the top of each page of the ordering process, the prominent disclosure required by the Free 

Reports Rule, 12 C.F.R. § 1022.138, to inform consumers of 
 

106a 

their right to obtain a free credit report from AnnualCreditReport.com or (877) 322–8228. 

8. It is proper to enter this Final Judgment and Order 

for Permanent Injunction and Other Equitable Relief 

Against Defendants (“Order”) to prevent a recurrence of 

Defendants’ violations of Section 5 of the FTC Act, 15 

U.S.C. § 45, Section 4 of ROSCA, 15 U.S.C. § 8403, Defendants’ net sales to consumers (total sales minus refunds 

and chargebacks) amounted to at least $6,022,671.36 from 

the conduct alleged in the Commission’s Complaint; and 

the Commission has recovered $762,000 from Defendants’ 

affiliate marketers Danny Pierce and Andrew Lloyd. 

10. The Commission is therefore entitled to equitable 

monetary relief against Defendants in the amount of 

$5,260,671.36, for which Defendants are jointly and severally liable. 

11. This Order is in addition to, and not in lieu of, any other civil or criminal remedies that may be provided by law. 

12. Nothing in this Order shall affect the compensatory 

sanction previously entered against Defendant Michael 

Brown in the civil contempt order dated July 18, 2017 (Dkt. 

106). 

13. Entry of this Order is in the public interest. 

DEFINITIONS 

For the purpose of this Order, the following definitions 

apply: 

1. “Affiliate” means any person, including third-party 

marketers, who participates in an affiliate program. 

2. “Affiliate Network” means any person who provides 

another person with affiliates for an affiliate program or 

whom any person contracts with as an affiliate to promote 

any product, service, or program. 
107a 

3. “Affiliate Program(s)” means (a) any arrangement 

under which any marketer or seller of a product, service, 

or program pays, offers to pay, or provides or offers to 

provide any form of consideration to any Defendant, either 

directly or indirectly, to (i) provide the marketer or seller 

with, or refer to the marketer or seller, potential or actual 

customers; or (ii) otherwise market, advertise, or offer for 

sale the product or service on behalf of the marketer or 

seller; or (b) any arrangement under which any Defendant 

pays, offers to pay, or provides or offers to provide any 

form of consideration to any third party, either directly or 

indirectly, to (i) provide any Defendant with, or refer to any 

Defendant, potential or actual customers; or (ii) otherwise 

market, advertise, or offer for sale any product, service, or 

program on behalf of any Defendant. 

4. “Mobile Application” means any software application 

that can be installed on a mobile device. 

5. “Billing Information” means any data that enables 

any person to access a consumer’s account, such as a credit 

card, checking, savings, share or similar account, utility 

bill, mortgage loan account, or debit card. 

6. “Charge,” “charged,” or “charging” means any attempt to collect money or other consideration from a consumer, including but not limited to causing billing information to be submitted for payment, including against a 

consumer’s credit card, debit card, bank account, phone 

bill, or other account. 

7. “Clear(ly) and conspicuous(ly)” means that a required disclosure is difficult to miss (i.e., easily noticeable) 

and easily understandable by ordinary consumers, including in all of the following ways: a. In any communication 

that is solely visual or solely audible, the disclosure must 

be made through the same means through which the com-
 

108a 

munication is presented. In any communication made 

through both visual and audible means, such as a television 

advertisement, the disclosure must be presented simultaneously in both the visual and audible portions of the communication even if the representation requiring the disclosure is made in only one means. 

b. A visual disclosure, by its size, contrast, location, the 

length of time it appears, and other characteristics, must 

stand out from any accompanying text or other visual 

elements so that it is easily noticed, read, and understood. 

c. An audible disclosure, including by telephone or 

streaming video, must be delivered in a volume, speed, and 

cadence sufficient for ordinary consumers to easily hear 

and understand it. 

d. In any communication using an interactive electronic 

medium, such as the Internet or software, the disclosure 

must be unavoidable. 

e. The disclosure must use diction and syntax understandable to ordinary consumers and must appear in each 

language in which the representation that requires the 

disclosure appears. 

f. The disclosure must comply with these requirements 

in each medium through which it is received, including all 

electronic devices and face-to-face communications. 

g. The disclosure must not be contradicted or mitigated 

by, or inconsistent with, anything else in the communication. 

h. When the representation or sales practice targets a 

specific audience, such as children, the elderly, or the terminally ill, “ordinary consumers” includes reasonable 

members of that group. 

8. “Close Proximity” means immediately adjacent to the 

triggering representation. In the case of advertisements 

disseminated verbally or through audible means, the dis-
 

109a 

closure shall be made as soon as practicable after the triggering representation. 

9. “Corporate Defendant” means Credit Bureau Center, 

LLC, a Delaware limited liability company, formerly 

known as MyScore LLC, and also doing business as 

eFreeScore.com, CreditUpdates.com, and FreeCreditNation.com, and its successors and assigns. 

10. “Credit Monitoring Service” means any service, 

plan, program or membership that includes, or is represented to include, alerts or monitoring of changes to consumers’ credit files, credit reports, or credit scores. 

11. “Defendants” means Credit Bureau Center, LLC, 

formerly known as MyScore LLC, also doing business as 

eFreeScore.com, CreditUpdates.com and FreeCreditNation.com, and its successors and assigns, and Michael 

Brown, individually, collectively, or in any combination. 

12. “Free Credit Report” means a file disclosure prepared by or obtained from, directly or indirectly, a nationwide consumer reporting agency, including without limitation Equifax, Experian or TransUnion, that is represented, 

either expressly or impliedly, to be available to the consumer at no cost if the consumer purchases a product or 

service, or agrees to purchase a product or service subject 

to cancellation. 

13. “Individual Defendant” means Michael Brown, by 

whatever names he may be known. 

14. “Negative Option Feature” means, in an offer or 

agreement to sell or provide any good or service, a provision under which the consumer’s silence or failure to take 

affirmative action to reject a good or service or to cancel 

the agreement is interpreted by the seller or provider as 

acceptance or continuing acceptance of the offer. 
110a 

15. “Preliminary Injunction” means the Preliminary Injunction as to Defendants Credit Bureau Center, LLC and 

Michael Brown entered on February 21, 2017 (Dkt. No. 59). 

16. “Receiver” means Robb Evans & Associates LLC, 

appointed as Receiver pursuant to Section VII of the Preliminary Injunction, and any deputy receivers named by 

the Receiver. 

17. “Receivership Defendant” means Credit Bureau 

Center, LLC, a Delaware limited liability company, formerly known as MyScore LLC, and also doing business as 

eFreeScore.com, CreditUpdates.com, and FreeCreditNation.com, and its successors and assigns, as well as any 

subsidiaries, affiliates, divisions, or sales or customer service operations, and any fictitious business entities or business names created or used by these entities. 

18. “Telemarketing” means any plan, program, or campaign which is conducted to induce the purchase of any 

product, service, plan, or program by use of one or more 

telephones, and which involves a telephone call, whether or 

not covered by the Telemarketing Sales Rule, 16 C.F.R. 

Part 310. 

19. “TRO” means the Ex Parte Temporary Restraining 

Order With Asset Freeze, Appointment of a Receiver, 

Other Equitable Relief, and Order to Show Cause Why a 

Preliminary Injunction Should Not Issue, entered in this 

matter on January 11, 2017 (Dkt. No. 16). 

I. BAN ON NEGATIVE-OPTION CREDIT 

MONITORING SERVICES 

IT IS ORDERED that Defendants, whether acting directly or indirectly, are permanently restrained and enjoined from advertising, marketing, promoting, offering for 

sale, or selling, or assisting in the advertising, marketing, 
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promoting, offering for sale, or sale of any Credit Monitoring Service with a Negative Option Feature. 

II. PROHIBITION AGAINST 

MISREPRESENTATIONS 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 

directly or indirectly, in connection with the advertising, 

marketing, promoting, offering for sale, or sale of any good 

or service, are permanently restrained and enjoined from 

misrepresenting, or assisting others in misrepresenting, 

expressly or by implication, any material fact, including, 

but not limited to: 

A. That a residential property described in an online ad 

is currently available for rent from someone consumers can 

contact through that ad; 

B. That a residential property will be shown to consumers who obtain their credit reports or scores from any 

particular source; 

C. The purpose of any communication with consumers; 

or 

D. Any other fact material to consumers concerning 

any good or service, such as: the total costs; any material 

restrictions, limitations, or conditions; or any material 

aspect of its performance, efficacy, nature, or central characteristics. 

III. PROHIBITED AFFILIATE PROGRAM 

ACTIVITIES 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 
112a 

directly or indirectly, in connection with the advertising, 

marketing, promoting, offering for sale, or sale of any good 

or service through an Affiliate Network or Program that a 

Defendant owns, operates, or controls, or through an Affiliate or Affiliate Network to which a Defendant provides or 

offers to provide any payment or other form of consideration, 

are permanently restrained and enjoined from failing to: 

A. Require each Affiliate and/or Affiliate Network to 

provide the following identifying information: 

1. In the case of a natural person, the Affiliate’s or Affiliate Network’s first and last name, physical address, country, telephone number, email address, and complete bank 

account information as to where payments are to be made 

to that person; 

2. In the case of a business entity, the Affiliate’s or Affiliate Network’s name and any and all names under which it 

does business, state of incorporation, registered agent, and 

the first and last name, physical address, country, telephone number, and email address for at least one natural 

person who owns, manages, or controls the Affiliate or 

Affiliate Network, and the complete bank account information as to where payments are to be made to the Affiliate or Affiliate Network; 

3. If Defendants have access to certain Affiliates only 

through an Affiliate Network, then Defendants shall contractually require each Affiliate Network to obtain and 

maintain from those Affiliates the identifying information 

set forth in Subsections A.1 and A.2 of this Section prior to 

the Affiliate’s or Affiliate Network’s participation in any 

Defendant’s Affiliate Program. 

B. As a condition of doing business with any Affiliate or 

Affiliate Network or such Affiliate or Affiliate Network’s 

acceptance into any Defendant’s Affiliate Program: (a) 
113a 

provide each such Affiliate or Affiliate Network a copy of 

this Order; (b) obtain from each such Affiliate or Affiliate 

Network a signed and dated statement acknowledging 

receipt of this Order and expressly agreeing to comply 

with this Order; and (c) clearly and conspicuously disclose 

in writing that engaging in acts or practices prohibited by 

this Order will result in immediate termination of any 

Affiliate or Affiliate Network and forfeiture of all monies 

owed to such Affiliate or Affiliate Network; provided, however, that if Defendants have access to certain Affiliates 

only through an Affiliate Network, then Defendants shall 

contractually require that the Affiliate Network provide 

the information required by this Subsection to each of 

those Affiliates and retain proof of the same prior to any 

such Affiliate being used in any Defendant’s Affiliate Program; and if any Defendant should acquire an entity that 

has an existing program of selling through Affiliates, the 

entity must complete all steps in this Subsection prior to 

Defendant’s acquisition of the entity. 

C. Require that each Affiliate or Affiliate Network, prior to the public use or dissemination to consumers of any 

marketing materials, including, but not limited to, advertisements, websites, emails, and pop-ups used by any Affiliate or Affiliate Network to advertise, promote, market, 

offer for sale, or sell any goods or services, provide Defendants with the following information: (a) copies of all 

marketing materials to be used by the Affiliate or Affiliate 

Network, including text, graphics, video, audio, and photographs; (b) each location the Affiliate or Affiliate Network 

maintains, or directly or indirectly controls, where the 

marketing materials will appear, including the URL of any 

website; and (c) for hyperlinks contained within the marketing materials, each location to which a consumer will be 
114a 

transferred by clicking on the hyperlink, including the 

URL of any website. Defendants shall also require each 

Affiliate or Affiliate Network to maintain and provide to 

Defendants upon request records of the dates when the 

marketing materials are publicly used or disseminated to 

consumers. Provided, however, that if Defendants have 

access to certain Affiliates only through an Affiliate Network, then Defendants shall contractually require that the 

Affiliate Network obtain and maintain the same information set forth above from each of those Affiliates who 

are part of any Defendant’s Affiliate Program prior to the 

public use or dissemination to consumers of any such marketing materials, and provide proof to such Defendant of 

having obtained the same. 

D. Promptly review the marketing materials specified 

in Subsection C of this Section as necessary to ensure 

compliance with this Order. Defendants shall also promptly 

take steps as necessary to ensure that the marketing materials provided to Defendants under Subsection C of this 

Section are the marketing materials publicly used or disseminated to consumers by the Affiliate or Affiliate Network. If a Defendant determines that use of any marketing 

materials does not comply with this Order, such Defendant 

shall inform the Affiliate or Affiliate Network in writing 

that approval to use such marketing materials is denied 

and shall not pay any amounts to the Affiliate or Affiliate 

Network for such marketing, including any payments for 

leads, “click-throughs,” or sales resulting therefrom. Provided, however, that if Defendants have access to certain 

Affiliates only through an Affiliate Network, then Defendants shall contractually require that the Affiliate Network 

comply with the procedures set forth in this Subsection as 

to those Affiliates. 
 

115a 

E. Promptly investigate any complaints that any Defendant receives through any source to determine whether 

any Affiliate or Affiliate Network is engaging in acts or 

practices prohibited by this Order, either directly or 

through any Affiliate that is part of any Defendant’s Affiliate Program. 

F. Upon determining that any Affiliate or Affiliate Network has engaged in, or is engaging in, acts or practices 

prohibited by this Order, either directly or through any 

Affiliate that is part of any Defendant’s Affiliate Program, 

immediately: 

1. Disable any connection between the Defendant’s Affiliate Program and the marketing materials used by the 

Affiliate or Affiliate Network to engage in such acts or 

practices prohibited by this Order; 

2. Halt all payments to the Affiliate or Affiliate Network resulting from such acts or practices prohibited by 

this Order; and 

3. Terminate the Affiliate or Affiliate Network; provided, however, Defendants shall not be in violation of this 

Subsection if Defendants fail to terminate an Affiliate 

Network in a case where Defendants’ only access to an 

Affiliate who has engaged in acts or practices prohibited by 

this Order is through an Affiliate Network and Defendants 

receive notice that the Affiliate Network immediately 

terminated the Affiliate violating this Order from any 

Defendant’s Affiliate Program. 

IV. PROHIBITION AGAINST MISREPRESENTATIONS 

RELATING TO NEGATIVE OPTION FEATURES 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 
 

116a 

directly or indirectly, in connection with promoting or 

offering for sale any good or service with a Negative Option Feature, are permanently restrained and enjoined 

from misrepresenting or assisting others in misrepresenting, expressly or by implication: 

A. Any cost to the consumer to purchase, receive, use, 

or return the initial good or service; 

B. That a consumer will not be Charged for any good or 

service; 

C. That a good or service is offered on a “free,” “trial,” 

“sample,” “bonus,” “gift,” “no obligation,” “discounted” 

basis, or words of similar import, denoting or implying the 

absence of an obligation on the part of the recipient of the 

offer to affirmatively act in order to avoid Charges, including where a Charge will be assessed pursuant to the offer 

unless the consumer takes affirmative steps to prevent or 

stop such a Charge; 

D. That consumers can obtain a good or service for a 

processing, service, shipping, handling, or administrative 

fee with no further obligation; 

E. The purpose(s) for which a consumer’s Billing Information will be used; 

F. The date by which a consumer will incur any obligation or be Charged unless the consumer takes an affirmative action on the Negative Option Feature; 

G. That a transaction has been authorized by a consumer; 

H. Any material aspect of the nature or terms of a refund, cancellation, exchange, or repurchase policy for the 

good or service; or 

I. Any other material fact. 

Compliance with this Section is separate from, and in 

addition to, the disclosures required by Sections V and VI 

of this Order. 
 

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V. REQUIRED DISCLOSURES RELATING TO 

NEGATIVE OPTION FEATURES 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 

directly or indirectly, in connection with promoting or 

offering for sale any good or service with a Negative Option Feature, are permanently restrained and enjoined 

from: 

A. Representing directly or indirectly, expressly or by 

implication, that any good or service that includes a Negative Option Feature is being offered on a free, trial, no 

obligation, reduced, or discounted basis, without disclosing 

Clearly and Conspicuously, and in Close Proximity to, any 

such representation: 1. The extent to which a consumer 

must take affirmative action(s) to avoid any Charges: a) for 

the offered good or service, b) of an increased amount after 

the trial or promotional period ends, and c) on a recurring 

basis; 

2. The total cost (or range of costs) the consumer will be 

Charged and, if applicable, the frequency of such Charges 

unless the consumer timely takes steps to prevent or stop 

such Charges; and 

3. The deadline(s) (by date or frequency) by which the 

consumer must affirmatively act in order to stop all recurring Charges. 

B. Obtaining Billing Information from a consumer for 

any transaction involving a good or service that includes a 

Negative Option Feature, without first disclosing Clearly 

and Conspicuously, and in Close Proximity to where a 

consumer provides Billing Information: 1. The extent to 

which a consumer must take affirmative action(s) to avoid 
 

118a 

any Charges: a) for the offered good or service, b) of an 

increased amount after the trial or promotional period 

ends, and c) on a recurring basis; 

2. The total cost (or range of costs) the consumer will be 

Charged, the date the initial Charge will be submitted for 

payment, and, if applicable, the frequency of such Charges 

unless the consumer timely takes affirmative steps to 

prevent or stop such Charges; 

3. The deadline(s) (by date or frequency) by which the 

consumer must affirmatively act in order to stop all recurring Charges; 

4. The name of the seller or provider of the good or service and, if the name of the seller or provider will not appear on billing statements, the billing descriptor that will 

appear on such statements; 

5. A description of the good or service; 

6. Any Charge or cost for which the consumer is responsible in connection with the cancellation of an order or 

the return of a good; and 

7. The simple cancellation mechanism to stop any recurring Charges, as required by Section VII of this Order. 

C. Failing to send the consumer: 1. Immediately after 

the consumer’s submission of an online order, written confirmation of the transaction by email. The email must 

Clearly and Conspicuously disclose all the information 

required by Subsection B of this Section, and contain a 

subject line reading “Order Confirmation” along with the 

name of the product or service, and no additional information; or 

2. Within 2 days after receipt of the consumer’s order 

by mail or telephone, a written confirmation of the transaction, either by email or first class mail. The email or letter 

must Clearly and Conspicuously disclose all the infor-
119a 

mation required by Subsection B of this Section. The subject line of the email must Clearly and Conspicuously state 

“Order Confirmation” along with the name of the product 

or service, and nothing else. The outside of the envelope 

must Clearly and Conspicuously state “Order Confirmation” along with the name of the product or service, and no 

additional information other than the consumer’s address, 

the Defendant’s return address, and postage. 

VI. OBTAINING EXPRESS INFORMED CONSENT 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 

directly or indirectly, in connection with promoting or 

offering for sale any good or service with a Negative Option Feature, are permanently restrained and enjoined 

from using or assisting others in using Billing Information 

to obtain payment from a consumer, unless Defendant first 

obtains the express informed consent of the consumer to 

do so. To obtain express informed consent, Defendants 

must: 

A. For all written offers (including over the Internet or 

other web-based applications or services), obtain consent 

through a check box, signature, or other substantially 

similar method, which the consumer must affirmatively 

select or sign to accept the Negative Option Feature, and 

no other portion of the offer. Defendant shall disclose 

Clearly and Conspicuously, and in Close Proximity to such 

check box, signature, or substantially similar method of 

affirmative consent, only the following, with no additional 

information: 1. The extent to which a consumer must take 

affirmative action(s) to avoid any Charges: a) for the offered good or service, b) of an increased amount after the 
120a 

trial or promotional period ends, and c) on a recurring 

basis; 

2. The total cost (or range of costs) the consumer will be 

Charged and, if applicable, the frequency of such Charges 

unless the consumer timely takes affirmative steps to 

prevent or stop such Charges; and 

3. The deadline(s) (by date or frequency) by which the 

consumer must affirmatively act in order to stop all recurring Charges. 

B. For all oral offers, prior to obtaining any Billing Information from the consumer: 

1. Clearly and Conspicuously disclose the information 

contained in Section V.B of this Order; and 

2. Obtain affirmative unambiguous express oral confirmation that the consumer a) consents to being Charged for 

any goods or services, including providing, at a minimum, 

the last four (4) digits of the consumer’s account number to 

be Charged, b) understands that the transaction includes a 

Negative Option Feature, and c) understands the specific 

affirmative steps the consumer must take to prevent or 

stop further Charges. 

For transactions conducted through telemarketing, Defendants shall maintain for 3 years from the date of each 

transaction an unedited voice recording of the entire transaction, including the prescribed statements set out in Subsection B of this Section. Each recording must be retrievable by date and by the consumer’s name, telephone number, or Billing Information, and must be provided upon 

request to the consumer, the consumer’s bank, or any law 

enforcement entity. 
 

121a 

VII. SIMPLE MECHANISM TO CANCEL 

NEGATIVE OPTION FEATURE 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, attorneys, and all other persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 

directly or indirectly, in connection with promoting or 

offering for sale any good or service with a Negative Option Feature, are permanently restrained and enjoined 

from failing to provide a simple mechanism for the consumer to: (1) avoid being Charged, or Charged an increased amount, for the good or service; and (2) immediately stop any recurring Charges. Such mechanism must 

not be difficult, costly, confusing, or time consuming, and 

must be at least as simple as the mechanism the consumer 

used to initiate the Charge(s). In addition: 

A. For consumers who entered into the agreement to 

purchase a good or service including a Negative Option 

Feature over the Internet or through other web-based 

applications or services, Defendants must provide a mechanism, accessible over the Internet or through such other 

web-based application or service that consumers can easily 

use to cancel the product or service and to immediately 

stop all further Charges. 

B. For consumers who entered into the agreement to 

purchase a good or service including a Negative Option 

Feature through an oral offer and acceptance, Defendants 

must maintain a telephone number and a postal address 

that consumers can easily use to cancel the product or 

service and to immediately stop all further Charges. Defendants must assure that all calls to this telephone number shall be answered during normal business hours and 

that mail to the postal address is retrieved regularly. 
 

122a 

VIII. REQUIRED DISCLOSURES RELATING TO 

FREE CREDIT REPORTS 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 

directly or indirectly, in connection with offering Free 

Credit Reports, are permanently restrained and enjoined 

from failing to include disclosures that meet all of the following requirements: 

A. General requirements for disclosures: The disclosures covered by Subsection B of this Section shall contain 

only the prescribed content and comply with the following 

requirements: 1. All disclosures shall be Clear and Conspicuous; 

2. All visual disclosures must be parallel to the base of 

the advertisement or screen; 

3. Program-length television, radio, or Internet-hosted 

multimedia advertisement disclosures shall be made at the 

beginning, near the middle, and at the end of the advertisement; and 

4. If the locator address AnnualCreditReport.com or 

toll-free telephone number (877) 322-8228 authorized under 

federal law changes in the future, the new address or telephone number shall be substituted in the disclosures required by this Section within a reasonable time. 

B. Medium-specific disclosures: All offers of Free Credit Reports shall include the disclosures required by this 

Section: 1. Television advertisements: All advertisements 

for Free Credit Reports broadcast on television shall include the following disclosure in Close Proximity to the 

first mention of a free credit report: “This is not the free 

credit report provided for by Federal law.” The visual dis-
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closure shall be at least four percent of the vertical picture 

height and appear for a minimum of four seconds. 

2. Radio advertisements: All advertisements for Free 

Credit Reports broadcast on radio shall include the following disclosure in Close Proximity to the first mention of a 

free credit report: “This is not the free credit report provided for by Federal law.” 

3. Print advertisements: All advertisements for Free 

Credit Reports in print shall include the following disclosure in the form specified below and in Close Proximity to 

the first mention of a free credit report. The first line of the 

disclosure shall be centered and contain only the following 

language: “THIS NOTICE IS REQUIRED BY LAW.” 

Immediately below the first line of the disclosure the following language shall appear: “You have the right to a free 

credit report from AnnualCreditReport.com or (877) 322-

8228, the ONLY authorized source under Federal law.” 

Each letter of the disclosure text shall be, at minimum, 

one-half the size of the largest character used in the advertisement. 

4. Websites: Any website offering Free Credit Reports 

must display the disclosure set forth in Subsections B.4.a, 

B.4.b, and B.4.e of this Section on each page that mentions 

a free credit report and on each page of the ordering process. This disclosure shall be visible across the top of each 

page where the disclosure is required to appear; shall 

appear inside a box; and shall appear in the form specified 

below: 

a. The first element of the disclosure shall be a header 

that is centered and shall consist of the following text: 

“THIS NOTICE IS REQUIRED BY LAW. Read more at 

consumerfinance.gov/learnmore.” Each letter of the header shall be one-half the size of the largest character of the 
 

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disclosure text required by Subsection B.4.b of this Section. The reference to consumerfinance.gov/learnmore 

shall be an operational hyperlink, underlined, and in a color 

that is a high degree of contrast from the color of the other 

disclosure text and background color of the box. 

b. The second element of the disclosure shall appear below the header required by Subsection B.4.a of this Section 

and shall consist of the following text: “You have the right 

to a free credit report from AnnualCreditReport.com or 

(877) 322–8228, the ONLY authorized source under Federal 

law.” The reference to AnnualCreditReport.com shall be an 

operational hyperlink to the centralized source, underlined, 

and in the same color as the hyperlink to consumerfinance.gov/learnmore required in Subsection B.4.a of this Section; 

c. The color of the text required by Subsections B.4.a 

and B.4.b of this Section shall be in a high degree of contrast with the background color of the box; 

d. The background of the box shall be a solid color in a 

high degree of contrast from the background of the page 

and the color shall not appear elsewhere on the page; 

e. The third element of the disclosure shall appear below the text required by Subsection B.4.b of this Section 

and shall be an operational hyperlink to AnnualCreditReport.com that appears as a centered button containing 

the following language: “Take me to the authorized 

source.” The background of this button shall be the same 

color as the hyperlinks required by Subsections B.4.a and 

B.4.b of this Section and the text shall be in a high degree 

of contrast to the background of the button; 

f. Each character of the text required in Subsections 

B.4.b and B.4.e of this Section shall be, at minimum, the 

same size as the largest character on the page, including 

characters in an image or graphic banner; 
 

 

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g. Each character of the disclosure shall be displayed as 

plain text and in a sans serif font, such as Arial; and 

h. The space between each element of the disclosure 

required in Subsections B.4.a, B.4.b, and B.4.e of this Section shall be, at minimum, the same size as the largest 

character on the page, including characters in an image or 

graphic banner. The space between the boundaries of the 

box and the text or button required in Subsections B.4.a, 

B.4.b, and B.4.e of this Section shall be, at minimum, twice 

the size of the vertical height of the largest character on 

the page, including characters in an image or graphic banner. 

5. Mobile Applications: Any Mobile Application offering 

Free Credit Reports must comply with the requirements 

set forth in Subsection B.6 of this Section. 

6. Internet-hosted multimedia advertising: All advertisements for Free Credit Reports disseminated through 

Internet-hosted multimedia in both audio and visual formats shall include the following disclosure in the form 

specified below and in Close Proximity to the first mention 

of a free credit report. The first line of the disclosure shall 

be centered and contain only the following language: 

“THIS NOTICE IS REQUIRED BY LAW.” Immediately 

below the first line of the disclosure the following language 

shall appear: “You have the right to a free credit report 

from AnnualCreditReport.com or (877) 322–8228, the 

ONLY authorized source under Federal law.” If the advertisement contains characters, the visual disclosure shall be, 

at minimum, the same size as the largest character on the 

advertisement. 

7. Telephone requests: When consumers call any telephone number, other than the number of the centralized 

source, appearing in an advertisement that represents 
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Free Credit Reports are available at the number, consumers must receive the following audio disclosure at the first 

mention of a free credit report: “The following notice is 

required by law. You have the right to a free credit report 

from AnnualCreditReport.com or (877) 322–8228, the only 

authorized source under Federal law.” 

8. Telemarketing solicitations: When telemarketing 

sales calls are made that include offers of Free Credit 

Reports, the call must include at the first mention of a free 

credit report the following disclosure: “The following notice is required by law. You have the right to a free credit 

report from AnnualCreditReport.com or (877) 322–8228, 

the only authorized source under Federal law.” 

IX. MONETARY JUDGMENT 

IT IS FURTHER ORDERED that: 

A. Judgment in the amount of Five Million, Two Hundred Sixty Thousand, Six Hundred Seventy-One and Thirty-Six Cents ($5,260,671.36) is entered in favor of the 

Commission against Defendants, jointly and severally, as 

equitable monetary relief. 

B. Defendants are ordered to pay to the Commission 

Five Million, Two Hundred Sixty Thousand, Six Hundred 

Seventy-One and Thirty-Six Cents ($5,260,671.36). Such 

payment must be made within 7 days of entry of this Order 

by electronic funds transfer in accordance with instructions 

provided by a representative of the Commission. 

C. Within 7 days of entry of this Order: 1. Defendant 

Michael Brown is ordered to pay to the Commission all 

funds in the Bank of America, N.A. account ending “2356” 

held by Michael Brown; 

2. Defendant Michael Brown is ordered to pay to the 

Commission all funds in the FirstBank Puerto Rico account 

ending “9599” held by Michael Brown; and 
 

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3. Defendant Michael Brown is ordered to liquidate and 

pay to the Commission the entire balance of Michael 

Brown’s Merrill Lynch SEP IRA account ending “6422,” 

less any fees owed to Merrill Lynch on that account or any 

amount Merrill Lynch is legally required to withhold. 

To effect such payments, the Court directs that the entities holding the funds shall, immediately upon receiving 

notice of this Order, remit the funds to the Commission by 

electronic funds transfer or otherwise in accordance with 

directions provided by a representative of the Commission. 

D. All money paid to the Commission pursuant to this 

Order may be deposited into a fund administered by the 

Commission or its designee to be used for equitable relief, 

including consumer redress and any attendant expenses 

for the administration of any redress fund. If a representative of the Commission decides that direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, with the Court’s prior 

approval, the Commission may apply any remaining money 

for such other equitable relief (including consumer information remedies) as it determines to be reasonably related 

to Defendants’ practices alleged in the Complaint. Any 

money not used for such equitable relief is to be deposited 

to the U.S. Treasury as disgorgement. Defendants have no 

right to challenge any actions the Commission or its representatives may take pursuant to this Subsection. 

X. PROHIBITION ON COLLECTING ON ACCOUNTS 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, whether acting 

directly or indirectly, are permanently restrained and 

enjoined from Charging or attempting to Charge consum-
 

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ers for any Credit Monitoring Services marketed or sold 

prior to entry of this Order, and from selling, assigning, or 

otherwise transferring any right to Charge for any Credit 

Monitoring Services marketed or sold prior to entry of this 

Order. 

XI. CUSTOMER INFORMATION 

IT IS FURTHER ORDERED that Defendants, their 

officers, agents, employees, and attorneys, and all other 

persons in active concert or participation with any of them, 

who receive actual notice of this Order, are permanently 

restrained and enjoined from directly or indirectly: 

A. Failing to provide sufficient customer information to 

enable the Commission to efficiently administer consumer 

redress. Defendants represent that they have provided this 

redress information to the Commission. If a representative 

of the Commission requests in writing any information 

related to redress, Defendants must provide it, in the form 

prescribed by the Commission, within 14 days. 

B. Disclosing, using, or benefitting from customer information, including the name, address, telephone number, 

email address, social security number, other identifying 

information, or any data that enables access to a customer’s account (including a credit card, bank account, or other 

financial account), that any Defendant obtained prior to 

entry of this Order in connection with the advertising, 

marketing, promoting, offering for sale, or sale of Credit 

Monitoring Services; and 

C. Failing to destroy such customer information in all 

forms in their possession, custody, or control within 30 days 

after receipt of written direction to do so from a representative of the Commission. 

Provided, however, that customer information need not 

be disposed of, and may be disclosed, to the extent re-
 

 

 

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quested by a government agency or required by law, regulation, or court order. 

XII. COMPLETION OF RECEIVERSHIP 

IT IS FURTHER ORDERED that the appointment of 

the Receiver pursuant to the Preliminary Injunction is 

hereby continued in full force and effect as modified by this 

Section. 

A. The Receiver is directed and authorized to accomplish the following within 90 days after entry of this Order, 

but any party or the Receiver may request that the Court 

extend the Receiver’s term for good cause: 

1. Take any and all steps that the Receiver concludes 

are appropriate to wind down the affairs of the Receivership Defendant; 

2. Complete the process of taking custody, control and 

possession of all assets of the Receivership Defendant, 

including without limitation any funds in bank accounts or 

payment processing reserve accounts; 

3. Complete, as necessary, the liquidation of all assets of 

the Receivership Defendant; 

4. Prepare and submit a report describing the Receiver’s activities pursuant to this Order, and a final application 

for compensation and expenses; and 

5. Distribute to the Commission all remaining liquid assets at the conclusion of the Receiver’s duties, in partial 

satisfaction of the monetary judgment set forth in this 

Order. 

B. Upon completion of the above tasks, the duties of the 

Receiver shall terminate, and the Receiver shall be discharged. 

XIII. ORDER ACKNOWLEDGEMENTS 

IT IS FURTHER ORDERED that Defendants obtain 

acknowledgments of receipt of this Order: 
 

 

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A. Each Defendant, within 7 days of entry of this Order, 

must submit to the Commission an acknowledgment of 

receipt of this Order sworn under penalty of perjury. 

B. For 5 years after entry of this Order, Individual Defendant for any business that such Defendant, individually 

or collectively with any other Defendant, is the majority 

owner or controls directly or indirectly, and Corporate 

Defendant, must deliver a copy of this Order to: (1) all 

principals, officers, directors, and LLC managers and 

members; (2) all employees having managerial responsibilities for conduct related to the subject matter of the Order, 

and all agents and representatives who participate in conduct related to the subject matter of the Order; and (3) any 

business entity resulting from any change in structure as 

set forth in the Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order for 

current personnel. For all others, delivery must occur 

before they assume their responsibilities. 

C. From each individual or entity to which a Defendant 

delivered a copy of this Order, that Defendant must obtain, 

within 30 days, a signed and dated acknowledgment of 

receipt of this Order. 

XIV. COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that Defendants make 

timely submissions to the Commission: 

A. One year after entry of this Order, each Defendant 

must submit a compliance report, sworn under penalty of 

perjury. 1. Each Defendant must: (a) identify the primary 

physical, postal, and email address and telephone number, 

as designated points of contact, which representatives of 

the Commission may use to communicate with Defendant; 

(b) identify all of that Defendant’s businesses by all of their 

names, telephone numbers, and physical, postal, email, and 
 

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Internet addresses; (c) describe the activities of each business, including the goods and services offered, the means 

of advertising, marketing, and sales, and the involvement 

of any other Defendant (which Individual Defendant must 

describe if he knows or should know due to his own involvement); (d) describe in detail whether and how that 

Defendant is in compliance with each Section of this Order; 

and (e) provide a copy of each Order Acknowledgment 

obtained pursuant to this Order, unless previously submitted to the Commission. 

2. Additionally, Individual Defendant must: (a) identify 

all telephone numbers and all physical, postal, email and 

Internet addresses, including all residences; (b) identify all 

business activities, including any business for which Individual Defendant performs services whether as an employee or otherwise and any entity in which Individual Defendant has any ownership interest; and (c) describe in detail 

Individual Defendant’s involvement in each such business, 

including title, role, responsibilities, participation, authority, control, and any ownership; 

B. For 20 years after entry of this Order, each Defendant must submit a compliance notice, sworn under penalty 

of perjury, within 14 days of any change in the following: 1. 

Each Defendant must report any change in: (a) any designated point of contact; or (b) the structure of Corporate 

Defendant or any entity that Defendant has any ownership 

interest in or controls directly or indirectly that may affect 

compliance obligations arising under this Order, including: 

creation, merger, sale, or dissolution of the entity or any 

subsidiary, parent, or affiliate that engages in any acts or 

practices subject to this Order. 

2. Additionally, Individual Defendant must report any 

change in: (a) name, including aliases or fictitious name, or 
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residence address; or (b) title or role in any business activity, including any business for which Individual Defendant 

performs services whether as an employee or otherwise 

and any entity in which Individual Defendant has any 

ownership interest, and identify the name, physical address, and any Internet address of the business or entity. 

C. Each Defendant must submit to the Commission notice of the filing of any bankruptcy petition, insolvency 

proceeding, or similar proceeding by or against such Defendant within 14 days of its filing. 

D. Any submission to the Commission required by this 

Order to be sworn under penalty of perjury must be true 

and accurate and comply with 28 U.S.C. § 1746, such as by 

concluding: “I declare under penalty of perjury under the 

laws of the United States of America that the foregoing is 

true and correct. Executed on: ” and supplying the date, 

signatory’s full name, title (if applicable), and signature. 

E. Unless otherwise directed by a Commission representative in writing, all submissions to the Commission 

pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by overnight courier (not the U.S. 

Postal Service) to: Associate Director for Enforcement, 

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. 

The subject line must begin: FTC v. Credit Bureau Center, 

LLC, et al., FTC Matter No. X170014. 

XV. RECORDKEEPING 

IT IS FURTHER ORDERED that Defendants must 

create certain records for 20 years after entry of the Order, 

and retain each such record for 5 years. Specifically, Corporate Defendant and Individual Defendant for any business that Individual Defendant, individually or collectively 

with any other Defendant, is a majority owner or controls 
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directly or indirectly, must create and retain the following 

records: 

A. Accounting records showing the revenues from all 

goods or services sold; 

B. Personnel records showing, for each person providing services, whether as an employee or otherwise, that 

person’s: name; addresses; telephone numbers; job title or 

position; dates of service; and (if applicable) the reason for 

termination; 

C. Records relating to Affiliates or Affiliate Networks, 

including all names, addresses, and telephone numbers; 

dollar amounts paid or received; and information used in 

calculating such payments; 

D. Records of all consumer complaints and refund requests, whether received directly or indirectly, such as 

through a third party, and any response; 

E. All records necessary to demonstrate full compliance 

with each provision of this Order, including all submissions 

to the Commission; 

F. Copies of all marketing materials, documents, and information received pursuant to Subsection III.C of this Order; and all written approvals or denials of marketing materials made pursuant to Subsection III.D of this Order; and 

G. A copy of each unique advertisement or other marketing material. 

XVI. COMPLIANCE MONITORING 

IT IS FURTHER ORDERED that, for the purpose of 

monitoring Defendants’ compliance with this Order, including any failure to transfer any assets as required by this 

Order: 

A. Within 14 days of receipt of a written request from a 

representative of the Commission, each Defendant must: 

submit additional compliance reports or other requested 
 

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information, which must be sworn under penalty of perjury; appear for depositions; and produce documents for 

inspection and copying. The Commission is also authorized 

to obtain discovery, without further leave of court, using 

any of the procedures prescribed by Federal Rules of Civil 

Procedure 29, 30 (including telephonic depositions), 31, 33, 

34, 36, 45, and 69. 

B. For matters concerning this Order, the Commission 

is authorized to communicate directly with each Defendant. 

Defendant must permit representatives of the Commission 

to interview any employee or other person affiliated with 

any Defendant who has agreed to such an interview. The 

person interviewed may have counsel present. 

C. The Commission may use all other lawful means, including posing, through its representatives as consumers, 

suppliers, or other individuals or entities, to Defendants or 

any individual or entity affiliated with Defendants, without 

the necessity of identification or prior notice. Nothing in 

this Order limits the Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 

15 U.S.C. §§ 49, 57b-1. 

D. Upon written request from a representative of the 

Commission, any consumer reporting agency must furnish 

consumer reports concerning Individual Defendant, pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 

U.S.C. § 1681b(a)(1). 

XVII. RETENTION OF JURISDICTION 

IT IS FURTHER ORDERED that this Court retains 

jurisdiction of this matter for purposes of construction, 

modification, and enforcement of this Order. 

SO ORDERED this 26th day of June, 2018. 

Honorable Matthew F. Kennelly 

 United States District Judge 
 

RELEVANT STATUTORY PROVISIONS 

Section 5 of the Federal Trade Commission Act, 15 

U.S.C. 45, provides, in relevant part: 

§ 45. Unfair methods of competition unlawful; prevention by Commission 

(a) Declaration of unlawfulness; power to prohibit unfair practices; inapplicability to foreign trade 

(1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. 

(2) The Commission is hereby empowered and directed 

to prevent persons, partnerships, or corporations, except 

banks, savings and loan institutions described in section 

57a(f)(3) of this title, Federal credit unions described in 

section 57a(f)(4) of this title, common carriers subject to 

the Acts to regulate commerce, air carriers and foreign air 

carriers subject to part A of subtitle VII of Title 49, and 

persons, partnerships, or corporations insofar as they are 

subject to the Packers and Stockyards Act, 1921, as 

amended, except as provided in section 406(b) of said Act, 

from using unfair methods of competition in or affecting 

commerce and unfair or deceptive acts or practices in or 

affecting commerce. 

(3) This subsection shall not apply to unfair methods of 

competition involving commerce with foreign nations 

(other than import commerce) unless-- 

(A) such methods of competition have a direct, 

substantial, and reasonably foreseeable effect-- 

(i) on commerce which is not commerce with 

foreign nations, or on import commerce with foreign 

nations; or 

135a 
136a 

(ii) on export commerce with foreign nations, of a 

person engaged in such commerce in the United 

States; and 

(B) such effect gives rise to a claim under the provisions of this subsection, other than this paragraph. 

If this subsection applies to such methods of competition 

only because of the operation of subparagraph (A)(ii), this 

subsection shall apply to such conduct only for injury to 

export business in the United States. 

(4)(A) For purposes of subsection (a), the term “unfair 

or deceptive acts or practices” includes such acts or practices involving foreign commerce that-- 

(i) cause or are likely to cause reasonably foreseeable 

injury within the United States; or 

(ii) involve material conduct occurring within the 

United States. 

(B) All remedies available to the Commission with respect to unfair and deceptive acts or practices shall be 

available for acts and practices described in this paragraph, including restitution to domestic or foreign victims. 

(b) Proceeding by Commission; modifying and setting 

aside orders 

Whenever the Commission shall have reason to believe 

that any such person, partnership, or corporation has been 

or is using any unfair method of competition or unfair or 

deceptive act or practice in or affecting commerce, and if it 

shall appear to the Commission that a proceeding by it in 

respect thereof would be to the interest of the public, it 

shall issue and serve upon such person, partnership, or 

corporation a complaint stating its charges in that respect 

and containing a notice of a hearing upon a day and at a 

place therein fixed at least thirty days after the service of 

said complaint. The person, partnership, or corporation so 
137a 

complained of shall have the right to appear at the place 

and time so fixed and show cause why an order should not 

be entered by the Commission requiring such person, 

partnership, or corporation to cease and desist from the 

violation of the law so charged in said complaint. Any person, partnership, or corporation may make application, and 

upon good cause shown may be allowed by the Commission 

to intervene and appear in said proceeding by counsel or in 

person. The testimony in any such proceeding shall be 

reduced to writing and filed in the office of the Commission. If upon such hearing the Commission shall be of the 

opinion that the method of competition or the act or practice in question is prohibited by this subchapter, it shall 

make a report in writing in which it shall state its findings 

as to the facts and shall issue and cause to be served on 

such person, partnership, or corporation an order requiring such person, partnership, or corporation to cease and 

desist from using such method of competition or such act 

or practice. Until the expiration of the time allowed for 

filing a petition for review, if no such petition has been duly 

filed within such time, or, if a petition for review has been 

filed within such time then until the record in the proceeding has been filed in a court of appeals of the United States, 

as hereinafter provided, the Commission may at any time, 

upon such notice and in such manner as it shall deem proper, modify or set aside, in whole or in part, any report or 

any order made or issued by it under this section. After the 

expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within such 

time, the Commission may at any time, after notice and 

opportunity for hearing, reopen and alter, modify, or set 

aside, in whole or in part any report or order made or 

issued by it under this section, whenever in the opinion of 
138a 

the Commission conditions of fact or of law have so 

changed as to require such action or if the public interest 

shall so require, except that (1) the said person, partnership, or corporation may, within sixty days after service 

upon him or it of said report or order entered after such a 

reopening, obtain a review thereof in the appropriate court 

of appeals of the United States, in the manner provided in 

subsection (c) of this section; and (2) in the case of an order, 

the Commission shall reopen any such order to consider 

whether such order (including any affirmative relief provision contained in such order) should be altered, modified, 

or set aside, in whole or in part, if the person, partnership, 

or corporation involved files a request with the Commission which makes a satisfactory showing that changed 

conditions of law or fact require such order to be altered, 

modified, or set aside, in whole or in part. The Commission 

shall determine whether to alter, modify, or set aside any 

order of the Commission in response to a request made by 

a person, partnership, or corporation under paragraph 1 

(2) not later than 120 days after the date of the filing of 

such request. 

* * * 

(l) Penalty for violation of order; injunctions and other 

appropriate equitable relief 

Any person, partnership, or corporation who violates an 

order of the Commission after it has become final, and 

while such order is in effect, shall forfeit and pay to the 

United States a civil penalty of not more than $10,000 for 

each violation, which shall accrue to the United States and 

may be recovered in a civil action brought by the Attorney 

General of the United States. Each separate violation of 

such an order shall be a separate offense, except that in a 

case of a violation through continuing failure to obey or 
139a 

neglect to obey a final order of the Commission, each day 

of continuance of such failure or neglect shall be deemed a 

separate offense. In such actions, the United States district 

courts are empowered to grant mandatory injunctions and 

such other and further equitable relief as they deem appropriate in the enforcement of such final orders of the 

Commission. 

* * * 

Section 13 of the Federal Trade Commission Act, 15 

U.S.C. 53, provides, in relevant part: 

§ 53 False advertisements; injunctions and restraining 

orders 

* * * 

(b) Temporary restraining orders; preliminary injunctions 

Whenever the Commission has reason to believe-- 

(1) that any person, partnership, or corporation is violating, or is about to violate, any provision of law enforced by the Federal Trade Commission, and 

(2) that the enjoining thereof pending the issuance of 

a complaint by the Commission and until such complaint is dismissed by the Commission or set aside by 

the court on review, or until the order of the Commission made thereon has become final, would be in the interest of the public-- 

the Commission by any of its attorneys designated by it for 

such purpose may bring suit in a district court of the United States to enjoin any such act or practice. Upon a proper 

showing that, weighing the equities and considering the 

Commission's likelihood of ultimate success, such action 

would be in the public interest, and after notice to the 
 

140a 

defendant, a temporary restraining order or a preliminary 

injunction may be granted without bond: Provided, however, That if a complaint is not filed within such period (not 

exceeding 20 days) as may be specified by the court after 

issuance of the temporary restraining order or preliminary 

injunction, the order or injunction shall be dissolved by the 

court and be of no further force and effect: Provided further, That in proper cases the Commission may seek, and 

after proper proof, the court may issue, a permanent injunction. Any suit may be brought where such person, 

partnership, or corporation resides or transacts business, 

or wherever venue is proper under section 1391 of Title 28. 

In addition, the court may, if the court determines that the 

interests of justice require that any other person, partnership, or corporation should be a party in such suit, cause 

such other person, partnership, or corporation to be added 

as a party without regard to whether venue is otherwise 

proper in the district in which the suit is brought. In any 

suit under this section, process may be served on any person, partnership, or corporation wherever it may be found. 

* * * 
141a 

Section 19 of the Federal Trade Commission Act, 15 

U.S.C. 57b, provides, in relevant part: 

§57b. Civil actions for violations of rules and cease and 

desist orders respecting unfair or deceptive acts or 

practices 

(a) Suits by Commission against persons, partnerships, 

or corporations; jurisdiction; relief for dishonest or 

fraudulent acts 

(1) If any person, partnership, or corporation violates 

any rule under this subchapter respecting unfair or deceptive acts or practices (other than an interpretive rule, or a 

rule violation of which the Commission has provided is not 

an unfair or deceptive act or practice in violation of section 

45(a) of this title), then the Commission may commence a 

civil action against such person, partnership, or corporation 

for relief under subsection (b) of this section in a United 

States district court or in any court of competent jurisdiction of a State. 

(2) If any person, partnership, or corporation engages 

in any unfair or deceptive act or practice (within the meaning of section 45(a)(1) of this title) with respect to which the 

Commission has issued a final cease and desist order which 

is applicable to such person, partnership, or corporation, 

then the Commission may commence a civil action against 

such person, partnership, or corporation in a United States 

district court or in any court of competent jurisdiction of a 

State. If the Commission satisfies the court that the act or 

practice to which the cease and desist order relates is one 

which a reasonable man would have known under the circumstances was dishonest or fraudulent, the court may 

grant relief under subsection (b) of this section. 
142a 

(b) Nature of relief available 

The court in an action under subsection (a) of this section shall have jurisdiction to grant such relief as the court 

finds 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, as 

the case may be. Such relief may include, but shall not be 

limited to, rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and public notification respecting the rule violation or 

the unfair or deceptive act or practice, as the case may be; 

except that nothing in this subsection is intended to authorize the imposition of any exemplary or punitive damages. 

(c) Conclusiveness of findings of Commission in cease 

and desist proceedings; notice of judicial proceedings 

to injured persons, etc. 

(1) If (A) a cease and desist order issued under section 

45(b) of this title has become final under section 45(g) of 

this title with respect to any person’s, partnership’s, or 

corporation’s rule violation or unfair or deceptive act or 

practice, and (B) an action under this section is brought 

with respect to such person’s partnership’s, or corporation’s rule violation or act or practice, then the findings of 

the Commission as to the material facts in the proceeding 

under section 45(b) of this title with respect to such person’s, partnership’s, or corporation’s rule violation or act or 

practice, shall be conclusive unless (i) the terms of such 

cease and desist order expressly provide that the Commission’s findings shall not be conclusive, or (ii) the order 

became final by reason of section 45(g)(1) of this title, in 

which case such finding shall be conclusive if supported by 

evidence. 
 

143a 

(2) The court shall cause notice of an action under this 

section to be given in a manner which is reasonably calculated, under all of the circumstances, to apprise the persons, partnerships, and corporations allegedly injured by 

the defendant’s rule violation or act or practice of the pendency of such action. Such notice may, in the discretion of 

the court, be given by publication. 

(d) Time for bringing of actions 

No action may be brought by the Commission under 

this section more than 3 years after the rule violation to 

which an action under subsection (a)(1) of this section relates, or the unfair or deceptive act or practice to which an 

action under subsection (a)(2) of this section relates; except 

that if a cease and desist order with respect to any person’s, partnership’s, or corporation’s rule violation or unfair or deceptive act or practice has become final and such 

order was issued in a proceeding under section 45(b) of this 

title which was commenced not later than 3 years after the 

rule violation or act or practice occurred, a civil action may 

be commenced under this section against such person, 

partnership, or corporation at any time before the expiration of one year after such order becomes final. 

(e) Availability of additional Federal or State remedies; 

other authority of Commission unaffected 

Remedies provided in this section are in addition to, 

and not in lieu of, any other remedy or right of action provided by State or Federal law. Nothing in this section shall 

be construed to affect any authority of the Commission 

under any other provision of law.