No. 21-2945 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE SEVENTH CIRCUIT 

––––––––––––––––––––––––––––––––––––––––––––– 

FEDERAL TRADE COMMISSION, 

Plaintiff-Appellee,

v. 

CREDIT BUREAU CENTER, LLC, et al., 

Defendants-Appellants. 

–––––––––––––––––––––––––––––––––––––––––––– 

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division 

No. 1:17-cv-00194 

Hon. Matthew F. Kennelly, District Court Judge 

––––––––––––––––––––––––––––––––––––––––––––– 

BRIEF OF THE FEDERAL TRADE COMMISSION 

–––––––––––––––––––––––––––––––––––––––––––––

JAMES REILLY DOLAN

Acting General Counsel 

JOEL MARCUS

Deputy General Counsel 

MICHAEL BERGMAN

GUY G. WARD Attorney 

ELIZABETH C. SCOTT FEDERAL TRADE COMMISSION

Attorneys 600 Pennsylvania Avenue, N.W. 

FEDERAL TRADE COMMISSION Washington, D.C. 20580 

Chicago, IL 60604 (202) 326-3184 

mbergman@ftc.gov 

 

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i 

TABLE OF CONTENTS 

Table of Authorities ................................................................................................. iii

STATEMENT OF THE CASE .................................................................................. 2

SUMMARY OF THE ARGUMENT ........................................................................ 7

STANDARD OF REVIEW ..................................................................................... 11

ARGUMENT ........................................................................................................... 11

I. The District Court Properly Modified Its Judgment To Provide 

Consumer Redress Under ROSCA And Section 19 Of The FTC 

Act ..................................................................................................................... 11

A. ROSCA authorizes consumer redress under Section 19. ......................... 11

B. Because the Commission sued and requested relief under 

ROSCA, the District Court properly awarded consumer 

redress under Section 19. .......................................................................... 14

C. The Commission did not waive its right to a Section 19 

remedy. ..................................................................................................... 18

D. The District Court’s remedy was justified by Rule 54(c). ....................... 20

E. The District Court’s Modified Judgment complied with Rule 

59(e). ......................................................................................................... 24

F. The District Court’s Modified Judgment complied with the 

Mandate. ................................................................................................... 27

G. The District Court’s calculation of redress was proper. ........................... 30

H. Monetary redress does not require asset tracing. ..................................... 34

II. Brown’s Argument That The Modified Judgment Permits 

Broader Relief Than Authorized By Section 19 Is Both Waived 

And Premature .................................................................................................. 35

A. Brown waived his challenge. .................................................................... 36

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ii 

B. The Court need not reach the question whether the Modified 

Judgment orders impermissible relief. ..................................................... 37

CONCLUSION ........................................................................................................ 39

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TABLE OF AUTHORITIES 

CASES

AMG Capital Mgmt. v. FTC, 

141 S. Ct. 1341 (2021) .......................................................................... 4, 5, 13, 22 

Berwick Grain Co. v. Illinois Dep’t of Agric., 

189 F.3d 556 (7th Cir. 1999)................................................................................ 24 

Big Ridge, Inc. v. NLRB, 

808 F.3d 705 (7th Cir. 2015)................................................................................ 28 

Bourgeois v. Watson, 

977 F.3d 620 (7th Cir. 2020)......................................................................... 18, 19 

Bryant v. New Jersey Dept. of Transp., 

998 F. Supp. 438 (D.N.J. 1998) ........................................................................... 24 

Burns v. Orthotek, Inc. Emps.’ Pension Plan & Tr., 

657 F.3d 571 (7th Cir. 2011)......................................................................... 19, 20 

Butler v. Kijakazi, 

4 F.4th 498 (7th Cir. 2021) .................................................................................. 32 

Charles v. Daley, 

799 F.2d 343 (7th Cir. 1986)................................................................................ 24 

Christianson v. Colt Indus. Operating Corp., 

486 U.S. 800 (1988) ............................................................................................. 25 

Cosgrove v. Bartolotta, 

150 F.3d 729 (7th Cir. 1998)................................................................................ 24 

Delgado v. US. Dept. of Justice, 

979 F.3d 550 (7th Cir. 2020)................................................................................ 27 

Donohoe v. Consol. Operating & Prod. Corp., 

30 F.3d 907 (7th Cir. 1994).................................................................................. 29 

Duncan Place Owners Ass’n v. Danze, Inc., 

927 F.3d 970 (7th Cir. 2019)................................................................................ 20 

Frank v. Walker, 

819 F.3d 384 (7th Cir. 2016)................................................................................ 19 

FTC v. Ah Media Grp., LLC, 

2021 U.S. Dist. LEXIS 210686 (N.D. Cal. Nov. 1, 2021) .................................. 17 

iii 

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iv 

FTC v. Bronson Partners, 

654 F.3d 359 (2nd Cir. 2011) ............................................................................... 35 

FTC v. Cardiff, 

2021 WL 3616071 (C.D. Cal. June 29, 2021) ..................................................... 15 

FTC v. Commerce Planet, 

815 F.3d 593 (9th Cir. 2016) ................................................................................. 35 

FTC v. Credit Bureau Ctr., LLC, 

325 F. Supp. 3d 852 (N.D. Ill. 2018) .................................. 3, 4, 21, 30, 31, 32, 34 

FTC v. Credit Bureau Ctr., LLC, 

937 F.3d 764 (7th Cir. 2019)......................... 3, 4, 5, 11, 13, 14, 22, 25, 29, 31, 34 

FTC v. Febre, 

128 F.3d 530 (7th Cir. 1997)......................................................................... 11, 34 

FTC v. Figgie Int’l, Inc., 

994 F.2d 595 (9th Cir. 1993)................................................................................ 33 

FTC v. Hanley, 

2022 WL 187848 (9th Cir. Jan. 20, 2022) .............................................. 16, 17, 26 

FTC v. John Beck Amazing Profits, LLC, 

2021 U.S. Dist. LEXIS 185202 (C.D. Cal. Aug. 19, 2021) ................................. 17 

GSS Group Ltd. v. Nat’l Port Authority, 

680 F.3d 805 (D.C. Cir. 2012) ............................................................................. 27 

Hicks v. Avery Drei, LLC, 

654 F.3d 739 (7th Cir. 2011)................................................................................ 37 

Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 

572 U.S. 559 (2014) ............................................................................................. 11 

Hormel v. Helvering, 

312 U.S. 552 (1941) ............................................................................................. 37 

Kokesh v. SEC, 

137 S.Ct. 1635 (2017) .......................................................................................... 33 

Kovacs v. United States, 

739 F.3d 1020 (7th Cir. 2014) ............................................................................. 29 

Liu v. SEC, 

140 S. Ct. 1936 (2020) ............................................................................ 33, 34, 39 

Matter of Cont’l Ill. Securities Litigation, 

985 F.2d 867 (7th Cir. 1993)................................................................................ 29 

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v 

Mercoid Corp. v. Mid-Continent Inv., 

320 U.S. 661 (1944) ............................................................................................. 22 

Moore v. Anderson, 

222 F.3d 280 (7th Cir. 2000)................................................................................ 28 

Old Republic Ins. Co. v. Employers Reinsurance Corp., 

144 F.3d 1077 (7th Cir. 1998) ............................................................................. 20 

Poullard v. McDonald, 

829 F.3d 844 (7th Cir. 2016)................................................................................ 36 

Precision Instr. Mfg. v. Auto. Maint. Mach., 

324 U.S. 806 (1945) ............................................................................................. 22 

Romo v. Gulf Stream Coach, Inc., 

250 F.3d (7th Cir. 2001) ................................................................................ 11, 24 

Schering Corp. v. Illinois Antibiotics, 

89 F.3d 357 (7th Cir. 1996).................................................................................. 19 

SEC v. First City Fin., 

890 F.2d 1215 (D.C. Cir. 1989) ........................................................................... 34 

Tully v. Barada, 

599 F.3d 591 (7th Cir. 2010)................................................................................ 20 

U.S. v. Anderson, 

866 F.3d 761 (7th Cir. 2017)................................................................................ 19 

U.S. v. MyLife.com, Inc., 

2021 WL 4891776 (C.D. Cal. Oct. 19, 2021) ...................................................... 33 

Z Channel Limited Partnership v. Home Box Office, 

931 F.2d 1338 (9th Cir. 1991) ............................................................................. 21 

STATUTES

12 U.S.C. § 5538 ............................................................................................... 16, 17 

15 U.S.C. § 45 ............................................................................................................ 3 

15 U.S.C. § 56(a) .............................................................................................. 15, 16 

15 U.S.C. § 57a ................................................................................................... 5, 22 

15 U.S.C. § 57b ................................................................................... 1, 5, 12, 33, 38 

15 U.S.C. § 8403 ................................................................................................. 3, 31 

15 U.S.C. § 8404(a) .............................................................. 1, 5, 6, 7, 12, 14, 16, 18 

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vi 

16 C.F.R. § 310.2 ..................................................................................................... 31 

28 U.S.C. § 1291 ........................................................................................................ 1 

28 U.S.C. § 1331 ........................................................................................................ 1 

28 U.S.C. § 1337(a) ................................................................................................... 1 

28 U.S.C. § 1345 ........................................................................................................ 1 

RULES

Fed. R. Civ P. 54(c) ............................................................................................. 8, 20 

Fed. R. Civ. P. 23 ..................................................................................................... 21 

Fed. R. Civ. P. 59(e) ................................................................................ 1, 4, 6, 8, 24 

TREATISES

Charles Alan Wright, Arthur R. Miller & Edward H. 

Cooper, Fed. Prac. & Proc. Juris. (2d ed.) ......................................................... 26 

 

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JURISDICTION

The appellants’ jurisdictional statement is not complete and correct. The 

district court had jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), and 1345. 

The appeal is from the district court’s Memorandum Opinion and Order (Doc.288) 

and Modified Final Judgment and Order (Doc.289), both entered on September 13, 

2021. The Modified Final Judgment and Order adjudicates all the claims with 

respect to all parties. Defendants timely filed their notice of appeal (Doc.290) on 

October 22, 2021. This Court has jurisdiction under 28 U.S.C. § 1291. 

ISSUES PRESENTED 

1. Whether the district court correctly held appellants liable for 

consumer redress under Section 19(a)(1) and 19(b) of the Federal Trade 

Commission Act, 15 U.S.C. §§ 57b(a)(1) & 57b(b) and Section 5(a) of the Restore 

Online Shoppers’ Confidence Act, 15 U.S.C. § 8404(a); 

2. Whether the district court correctly held that the FTC did not waive 

pursuit of monetary relief under Section 19; 

3. Whether the district court correctly modified its judgment under Fed. 

R. Civ. P. 59(e) based on an “intervening change in controlling law”; 

4. Whether the district court correctly held that this Court’s mandate in 

an earlier appeal or the law of the case doctrine did not prohibit modification of the 

original judgment to order monetary relief under a different statute; 

1 

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5. Whether the district court correctly calculated the amount of relief 

necessary to redress consumer injury; 

6. Whether the district court correctly held that tracing of assets was not 

required; 

7. Whether appellants waived their argument that the district court’s 

modified judgment permitted relief beyond that authorized under Section 19; and 

8. Whether it would be premature for the Court to address whether the 

modified judgment permitted relief beyond that authorized under Section 19. 

STATEMENT OF THE CASE1

The underlying facts of this case were not disputed initially and are no 

longer subject to dispute. The FTC proved that Michael Brown and his company 

Credit Bureau Center (collectively, Brown) ran a scheme in which fake apartment 

rental ads were posted on Craigslist to lure consumers to sign up for an allegedly 

free credit report on Brown’s websites. In fact, without telling consumers, Brown 

enrolled them in an ongoing credit monitoring service that charged them $30 every 

month. Brown bilked 150,000 consumers out of $6.8 million. FTC v. Credit 

1

 Doc.xxx” refers to entries in the district court’s docket; page cites are to ECFgenerated page numbers; “Br.” refers to the Appellants’ February 2, 2022 Brief 

(7th Cir. Doc. 18); “A[#]” refers to pages in the Appellants’ Short Appendix; 

“SA[#] refers to pages in the FTC’s Supplemental Appendix; “Op.” refers to the 

district court’s Sept. 13, 2021 Memorandum Opinion and Order (Doc.288); and 

“Mod. Judg.” refers to the district court’s September 13, 2021 Modified Final 

Judgment (Doc.289). 

2 

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Bureau Ctr., LLC, 325 F. Supp. 3d 852, 857, 860-62 (N.D. Ill. 2018), aff’d in part, 

vacated in part, 937 F.3d 764 (7th Cir. 2019). 

The FTC sued Brown for violating, inter alia, (1) Section 5 of the Federal 

Trade Commission Act, which prohibits “deceptive conduct,” 15 U.S.C. § 45; and 

(2) Section 4 of the Restore Online Shoppers’ Confidence Act (ROSCA), 15 

U.S.C. § 8403, which restricts the use of a “negative option” feature to sell goods 

or services on the internet. See Doc.1 ¶¶1, 44-52 [SA01, 016-18]. The complaint 

sought an injunction against further unlawful conduct and “relief . . . necessary to 

redress injury to consumers resulting from [Brown’s] violations of the FTC Act, 

ROSCA,” and other federal laws, including “restitution [and] the refund of monies 

paid.” Id. at 22 [SA022]. 

The district court entered summary judgment in favor of the FTC, finding 

Brown liable for violating the FTC Act, ROSCA, and other federal laws. The court 

permanently enjoined Brown from engaging in a credit monitoring service with a 

negative option feature or deceptive sales like the fake landlord/apartment scheme 

here and imposed extensive requirements on Brown’s continued involvement in 

the credit monitoring business or sales using a negative option feature or an 

affiliate program. The court ordered him to pay $5.2 million in monetary relief, 

basing that judgment on the authority of Section 13(b) of the FTC Act, which 

under the then-binding Seventh Circuit precedent allowed monetary remedies. 

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Credit Bureau Ctr., 325 F. Supp. 3d at 858-70. The Court retained jurisdiction “for 

purposes of construction, modification, and enforcement of [its] Order.” Doc.239 

at 33. 

On appeal, this Court affirmed the grant of summary judgment and the 

injunction but vacated the monetary remedy. The Court overturned its earlier 

decisions, which had been on the books for 30 years, holding instead that Section 

13(b) does not permit monetary remedies. FTC v. Credit Bureau Ctr., LLC, 937 

F.3d 764 (7th Cir. 2019) (“Credit Bureau I”) (subsequent history omitted). The 

Supreme Court later ratified that judgment in AMG Capital Mgmt. v. FTC, 141 S. 

Ct. 1341, 1344, 1352 (2021) (“AMG Capital”). In all other respects, the Court 

upheld the district court’s judgment. Specifically, the Court held that ROSCA 

requires the disclosure of “all material terms” of a transaction before the consumer 

pays, but Brown “did not tell consumers that they were enrolling in a creditmonitoring service.” Credit Bureau I, 937 F.3d at 769, 770. 

After issuance of the mandate, the FTC moved under Fed. R. Civ. P. 59(e) to 

amend the district court’s judgment to reimpose the monetary remedy under 

provisions other than Section 13(b). Modification of the judgment was appropriate, 

the FTC argued, because the judicial decisions regarding Section 13(b) were an 

“intervening change of controlling law” under the Rule. 

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The FTC showed that the court could reimpose a monetary remedy under 

Section 19 of the FTC Act, 15 U.S.C. § 57b, which empowers the Commission to 

sue any person who violates a rule promulgated under Section 18 of the FTC Act 

“respecting unfair or deceptive acts or practices,” id. § 57b(a)(1). In such suits, the 

court may “grant such relief as the court finds necessary to redress injury to 

consumers,” including “the refund of money or return of property.” Id. § 57b(b). 

Both this Court and the Supreme Court had recognized that Section 19 of the FTC 

Act permits monetary remedies. Credit Bureau I, 937 F.3d at 773 (“[W]hen 

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).”); AMG Capital Mgmt., 141 S. Ct. at 1352 (“Nothing we say 

today ... prohibits the Commission from using its authority under § 5 and § 19 to 

obtain restitution on behalf of consumers.”). 

Monetary relief under Section 19 was appropriate for ROSCA violations 

because ROSCA specifies that violations of it or its implementing rules are to be 

“treated as . . . violation[s] of a rule under section 18 of the Federal Trade 

Commission Act (15 U.S.C. § 57a) regarding unfair or deceptive acts or practices.” 

15 U.S.C. § 8404(a). ROSCA also directs the Commission to enforce the statute 

(and its implementing rules) “in the same manner, by the same means, and with the 

same jurisdiction, powers, and duties as though all applicable terms and provisions 

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of the Federal Trade Commission Act were incorporated into and made part of this 

Act,” 15 U.S.C. § 8404(a), which clearly includes Section 19 and its specified 

remedies. 

In the order on review, the district court granted the FTC’s motion and 

denied a countermotion to deny modification of the judgment and ‘“enforce’ the 

Seventh Circuit’s mandate.” Doc.288 (“Op.”) 2 [A034]. The court first held that 

the mandate did not preclude monetary relief under Section 19 because the Court’s 

earlier decision barred only “awarding restitution under section 13(b),” and did 

“not preclude the [district court] from considering” monetary relief under Section 

19. Op. 7, 10 [A039, A042]. For the same reason, the court rejected Brown’s claim 

that the law of the case precluded any monetary remedy. Op. 9 [A041]. 

The court held next that the FTC did not waive a claim for relief under 

Section 19 when it sought summary judgment only under Section 13(b). The 

agency “did not intentionally relinquish or abandon its entitlement to monetary 

relief under section 5(a) of ROSCA”; nor did the FTC waive anything on appeal 

because an appellee need not “raise[ ] all possible alternative grounds for affirming 

the district court’s original decision.” Op. 11-12 [A043-44] (citation omitted). 

 The court held that modification of the judgment was proper under Rule 

59(e) because this Court’s Credit Bureau I decision was an “intervening change in 

the controlling law.” Brown would not be unfairly prejudiced by having to address 

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Section 19 now because he knew since the complaint was filed that the FTC sought 

recovery of consumer loss and he therefore had a full opportunity to challenge that 

relief. He had notice of the Section 19 claim because the complaint directly sought 

consumer redress under Section 5(a) of ROSCA, which incorporates Section 19. 

Op. 24-25 [A056-57]. Moreover, he failed to explain how his litigation strategy 

would have been different had the FTC initially relied on Section 19 rather than 

Section 13(b). Op. 20. The court entered a new judgment “award[ing] the same 

consumer redress, this time under ROSCA and Section 19.” Op. 26 [A058]. 

SUMMARY OF THE ARGUMENT 

It has already been adjudicated and affirmed that Brown violated ROSCA, 

which had been pleaded in the complaint and which incorporates all remedies 

available under the FTC Act. The only question now is whether Brown may face 

monetary consequences for his illegal acts, as plainly contemplated by Section 19. 

1.a. The district court correctly modified its judgment to order consumer 

redress under Section 19(b). ROSCA Section 8404(a) incorporates all of the FTC 

Act’s enforcement provisions and remedies, including Sections 19(a)(1) and 19(b). 

By invoking ROSCA Section 8404(a) in the complaint, the FTC invoked all of the 

incorporated remedies; the FTC did not have to cite Section 19 specifically. 

b. The FTC did not waive the Section 19 remedies available under ROSCA. 

The complaint expressly sought relief under both Section 13(b) and ROSCA. The 

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FTC did not relinquish or abandon its right to Section 19 remedies by pursuing 

Section 13(b) relief in the trial court based on then-binding precedent because it 

gained no strategic advantage from not asserting a duplicative claim under 

ROSCA. Neither was the FTC required to advance ROSCA in the first appeal to 

defend against Brown’s challenges to the monetary remedy ordered under Section 

13(b) because the law does not require an appellee to raise all possible grounds for 

affirmance. And in any event Fed. R. Civ. P. 54(c) would permit Section 19(b) 

remedies even if they hadn’t been pleaded because the FTC was “entitled” to that 

relief as a result of Brown’s ROSCA violations. Further, Brown cannot have 

suffered prejudice by having to defend himself under Section 19 after litigating 

Section 13(b) relief because “[t]he FTC [sought] the same remedy, for the same 

reasons, and for the same victims” under both provisions. 

 c. The district court properly modified the judgment under Fed. R. Civ. P. 

59(e). The elimination of monetary remedies under Section 13(b) by the decisions 

in Credit Bureau I and AMG Capital, both decided after the original judgment, was 

an “intervening change in controlling law.” Indeed, both decisions dramatically 

altered the law by overruling decades of Section 13(b) precedent in numerous 

circuits. Brown is wrong that an appellate reversal in the same case cannot be a 

change in law under Rule 59(e), but the claim does not matter anyway because 

AMG Capital separately altered the law. 

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d. The Court’s mandate in Credit Bureau I did not prohibit the district court 

from modifying the judgment. The Court’s decision in Credit Bureau I was limited 

to the ruling that Section 13(b) does not permit monetary remedies. The Court did 

not address Section 19, and indeed expressly acknowledged both the FTC’s 

remedial authority under that provision and that ROSCA can be enforced through 

Section 19. 

e. The district court properly calculated the amount of consumer redress. The 

court properly included redress to deceived consumers for time periods both before 

and after December 1, 2015. The district court ruled in its first decision that Brown 

forfeited the argument that his websites did not violate ROSCA before December 

1, 2015. Since then, Brown has never challenged or even addressed that forfeiture 

ruling nor has he explained why it was wrong. The contention is unfounded 

anyway in light of Brown’s own admission that his website disclosures were 

consistent throughout this period, as well as evidence that many consumers 

complained about his practices and thousands demanded chargebacks from their 

credit cards before December 2015. 

The Supreme Court’s decisions in Liu and Kokesh do not limit redress 

judgments under Section 19 to net profits. Section 19 expressly permits “the refund 

of money,” a broader measure of redress than the “equitable relief” permitted 

under the securities statutes at issue in Liu and Kokesh. But even if those cases had 

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bearing on Section 19, the Court made clear in Liu (Kokesh is simply irrelevant to 

this question) that equity permits disgorgement of gross receipts when all profits 

“result[] from the wrongdoing,” which describes Brown’s scheme to a T. 

f. Section 19 does not require tracing of assets. It expressly permits “the 

refund of money” taken from consumers, without limitation. And even if the plain 

statutory language were not so broad, if Brown commingled stolen money with 

other funds, he bears the burden to show which funds are untainted. Wrongdoers 

should not be able to shield ill-gotten gains from victim redress. 

2. Brown’s claim that the judgment improperly contemplates sending money 

not used for consumer redress to the Treasury is both waived and premature. He 

raised no such claim below and has no excuse for failing to do so. The original 

judgment contained the same provision and Brown knew no later than May 2021 

that the proposed modifications did not change the existing language. Yet he did 

not object. The Court need not address the issue now anyway. The Commission 

has recovered only 20% of the judgment and expects to collect nothing further. It 

therefore is highly likely there will be no funds remaining after injured consumers 

receive redress. Moreover, because the district court must approve the disposition 

of money not sent directly to consumers, the fate of any such money is entirely 

conjectural at this point. 

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STANDARD OF REVIEW 

The district court’s ruling on a Rule 59(e) motion is reviewed for abuse of 

discretion. Romo v. Gulf Stream Coach, Inc., 250 F.3d 1119, 1121 (7th Cir. 2001), 

as is its judgment for monetary relief. FTC v. Febre, 128 F.3d 530, 533-34 (7th 

Cir. 1997). In making those determinations, the trial court’s application of the law 

is reviewed de novo and its conclusions of fact for clear error. Highmark Inc. v. 

Allcare Health Mgmt. Sys., Inc., 572 U.S. 559, 563 (2014). 

ARGUMENT 

The district court properly amended its judgment and directed monetary 

redress for victimized consumers under Section 19 of the FTC Act. The plain terms 

of ROSCA expressly incorporate the Commission’s Section 19 rule-enforcement 

authority, which in turn expressly permits the imposition of monetary remedies. 

I. THE DISTRICT COURT PROPERLY MODIFIED ITS JUDGMENT TO 

PROVIDE CONSUMER REDRESS UNDER ROSCA AND SECTION 19 OF 

THE FTC ACT 

A. ROSCA authorizes consumer redress under Section 19. 

This Court has already determined that Brown violated ROSCA because his 

websites failed to “tell consumers that they were enrolling in a credit-monitoring 

service.” Credit Bureau I, 937 F.3d at 770. The district court properly concluded 

that “section 5(a) of ROSCA plainly authorizes [the FTC] to seek monetary relief 

for ROSCA violations via sections 18 and 19 of the FTC Act.” Op. 5 [A037]; see 

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12 

also id. 24 [A056] (Section 19 “is incorporated by reference in Section 5(a) of 

ROSCA”). ROSCA makes clear in two ways that it permits monetary remedies 

under the authority of Section 19. 

First, Section 5(a) of ROSCA states that a “[v]iolation of [ROSCA] . . . shall 

be treated as a violation of a rule under section 18 of the Federal Trade 

Commission Act.” 15 U.S.C. § 8404(a).2

 Such rule violations can be enforced 

directly under Section 19(a)(1), which states plainly that “[i]f any person . . . 

violates any rule” under Section 18, “then the Commission may commence a civil 

action against such person.” Section 19 expressly provides that in such a lawsuit 

the court “shall have jurisdiction to grant such relief as the court finds necessary to 

redress injury to consumers ... resulting from the rule violation,” including “the 

refund of money or return of property.” 15 U.S.C. §§ 57b(a)(1), 57b(b).3

 

2

 Section 5(a) of ROSCA states in full that: 

Violation of this [Act] or any regulation prescribed under this [Act] 

shall be treated as a violation of a rule under section 18 of the Federal 

Trade Commission Act (15 U.S.C. 57a) regarding unfair or deceptive 

acts or practices. The Federal Trade Commission shall enforce this 

[Act] in the same manner, by the same means, and with the same 

jurisdiction, powers, and duties as though all applicable terms and 

provisions of the Federal Trade Commission Act (15 U.S.C. 41 et 

seq.) were incorporated into and made a part of this [Act]. 

15 U.S.C. § 8404(a). 

3

 Section 19(b) of the FTC Act states in full that: 

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Second, ROSCA states that the Commission “shall enforce” ROSCA “in the 

same manner, by the same means, and with the same jurisdiction, powers and 

duties, as though all applicable terms and provisions of the Federal Trade 

Commission Act were incorporated into and made a part of this Act.” 15 U.S.C. 

§ 8404(a). Section 19 is one such “applicable term and provision”; therefore, under 

its plain language, ROSCA may be enforced “in the same manner, by the same 

means, and with the same jurisdiction” as under Section 19, along with all 

remedies—including monetary remedies—that Congress made available under that 

statute. As this Court recognized in Credit Bureau I “the Commission can use the 

[FTC Act’s] enforcement regime against [ROSCA] violators,” and Section 19 

remedies include “the refund of money.” 937 F.3d at 769, 773. The Supreme Court 

likewise recognized in AMG Capital that the Commission may “use its authority 

under ... § 19 to obtain restitution on behalf of consumers.” 141 S. Ct. at 1352. 

The court in an action under subsection (a) 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. 

15 U.S.C. § 57b(b). 

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14 

B. Because the Commission sued and requested relief under 

ROSCA, the District Court properly awarded consumer 

redress under Section 19. 

The district court held that it could properly “amend its prior judgment and 

award the same consumer redress, this time under ROSCA and Section 19,” not 

Section 13(b). Op. 26 [A058]. Brown asserts that the amendment was a legal error 

because the FTC brought its suit exclusively under Section 13(b) and thus waived 

any reliance on Section 19. E.g., Br. 4, 6, 8, 30. Brown is wrong. 

The Commission filed its complaint under both Section 13(b) and ROSCA. 

Paragraphs 1 and 5, for example, invoke § 8404(a) (and Section 13(b)), as 

providing authority to obtain “restitution [and] the refund of monies paid.” Doc.1 

¶¶1, 5 [SA01-02]. The prayer for relief cited § 8404(a) (and Section 13(b)) as 

authority to seek “relief . . . to redress injury to consumers . . . including but not 

limited to . . . restitution [and] the refund of monies paid.” Id. at 22 [SA022].4

Brown admits as much. Br. 1. Because (as explained above) ROSCA incorporates 

all of the FTC Act’s enforcement mechanisms, the complaint’s invocation of 

ROSCA invoked Section 19 itself. In a case involving nearly identical 

4

 Brown notes that the complaint’s section “The Court’s Power to Grant Relief,” 

Doc.1 ¶63, refers only to Section 13(b). Br. 35. That made sense because when the 

Commission filed this suit in January 2017, it could get all necessary relief under 

Section 13(b). See Credit Bureau I, 937 F.3d at 785-86. But that does not negate 

the plain invocations of ROSCA elsewhere in its complaint. See Doc.1 ¶¶1, 5, at 22 

[SA01-02, 022] (prayer for relief). 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
15 

circumstances, where the FTC sought monetary relief under ROSCA, another 

district court ruled that “the FTC did not need to specifically cross-reference 

Section 19.” FTC v. Cardiff, No. ED CV 18-2104-DMG (PLA), 2021 WL 

3616071, *2 (C.D. Cal. June 29, 2021). In short, the FTC brought suit under 

ROSCA, which incorporates Section 19, and the record thus flatly refutes Brown’s 

repeated claim that the Commission relied “solely” on Section 13(b) and waived 

any other remedial possibility. 

For the same reasons, Brown is wrong in his related and oft-repeated 

argument that the district court could not provide relief under Section 19(b) 

because the case was not “commenced” under Section 19(a). Br. 7-8, 30-31, 36-37. 

Suing under ROSCA, as the FTC did, is commencing a suit under Section 19 by 

virtue of the incorporation clause. And even if that were not the case, Brown cites 

nothing in the statute that precludes relief if a case is “commenced” under a 

different statute and relief is later claimed under Section 19. 

Brown is off-base in claiming that the Commission is barred from seeking 

Section 19 relief because it failed to consult with the Attorney General before 

“commencing” this suit, which Brown asserts is required under Section 56(a)(1) of 

the FTC Act, U.S.C. § 56(a)(1) (which would also be incorporated into ROSCA). 

Br. 7-8, 32, 36-37, 39-40. Brown forfeited this argument, Op. 22 [A054], but, 

under Section 56(a)(2), when the FTC files a case under Section 13 or Section 19 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
16 

(as it did here), it has “exclusive authority” to undertake the case, and Section 

56(a)(1) does not apply. In those cases, the FTC must “inform” the Attorney 

General about the matter but there is no temporal deadline. 15 U.S.C. § 56(a)(2). 

Even so, the FTC complied with its Section 56(a) responsibilities because it 

regularly informs the Attorney General of cases it has filed under Section 56(a)(2). 

Further, nothing in the statute indicates that dismissal of a law-enforcement 

complaint is somehow warranted at the defendant’s insistence if the FTC violates 

this intra-governmental housekeeping requisite. 

The district court thus correctly held that, by pleading and seeking relief 

under ROSCA § 8404(a), the Commission was entitled to the same consumer 

redress for Brown’s ROSCA violations as provided in the original judgment, but 

this time under Section 19(b). Op. 26 [A058]. 

This case closely resembles FTC v. Hanley, Nos. 20-15143, 20-15144, 2022 

WL 187848 (9th Cir. Jan. 20, 2022), where the Ninth Circuit held that, in the wake 

of AMG Capital, the FTC could obtain the same remedy for rule violations under 

Section 19(b) that was originally awarded under Section 13(b) by virtue of a statute 

incorporating the FTC’s enforcement provisions. There, the FTC filed suit under 

both Section 13(b) and the Dodd-Frank Act, 12 U.S.C. § 5538. That statute, like 

ROSCA, authorizes the FTC to enforce rules promulgated under it as though “all 

applicable terms and provisions” of the FTC Act were incorporated into the Act, 

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17 

§ 5538(a)(3). The district court initially imposed a monetary judgment under 

Section 13(b), but after AMG Capital, the Ninth Circuit ruled that “the FTC may 

still obtain restitution on behalf of consumers under section 19.” 2022 WL 187848, 

at *1. The Court rejected the argument—effectively identical to Brown’s—that the 

FTC had waived reliance on Section 19 by relying solely on Section 13(b) for 

monetary relief, concluding instead that “[a]lthough the FTC did not expressly 

invoke section 19 in its Complaint, it preserved the option of pursuing a judgment 

under that authority by expressly relying on the Dodd-Frank Act.” Id. 

Other courts have also refused to overturn monetary awards ordered under 

Section 13(b) where the same relief could be attained under Section 19. See, e.g., 

FTC v. John Beck Amazing Profits, LLC, No. 2:09-cv-04719, 2021 U.S. Dist. 

LEXIS 185202, at *8 (C.D. Cal. Aug. 19, 2021) (denying Rule 60 relief from 

remedy based on Section 13(b) where relief could be granted under Section 19 for 

defendants’ rule violations); FTC v. Ah Media Grp., LLC, No. 19-cv-04022, 2021 

U.S. Dist. LEXIS 210686, at *13-20 (N.D. Cal. Nov. 1, 2021) (refusing to reopen 

judgment ordered under Section 13(b) “where all it would likely mean is that the 

FTC would simply have to take a different procedural route to get to the same 

substantive outcome”). 

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C. The Commission did not waive its right to a Section 19 

remedy. 

 Brown claims that notwithstanding the complaint’s reliance on ROSCA, the 

Commission affirmatively waived reliance on Section 19 because in both the trial 

court and on appeal the agency argued for monetary relief under Section 13(b) only 

and not also under Section 19. E.g., Br. 6, 30, 33, 37. There was no waiver. 

Waiver is the “intentional relinquishment or abandonment of a known right.” 

Bourgeois v. Watson, 977 F.3d 620, 629 (7th Cir. 2020) (cleaned up). As the 

district court correctly determined, the FTC did not waive Section 19 relief because 

it did not intentionally relinquish or abandon its entitlement to relief under ROSCA 

§ 8404(a). Op. 11-12 [A043-44]. To the contrary, the Commission invoked 

ROSCA from the beginning by relying on ROSCA § 8404(a) in its complaint as a 

source of liability and relief. Doc.1 ¶¶1, 5, 44-52 & at 22-23 [SA01-02, 016-018, 

022-023] (prayer for relief). The FTC did not need to separately invoke Section 19 

for all the reasons described above. See Op. 11 [A043]. 

Nor did the Commission intentionally relinquish or abandon its claim to 

relief under ROSCA § 8404(a) at summary judgment. The Commission did not 

raise Section 19 at that point because binding precedent (both in-circuit and in 

courts throughout the country) established conclusively that Section 13(b) 

authorized monetary relief. The Commission gained no strategic advantage from 

not asserting a wholly redundant claim. See United States v. Anderson, 866 F.3d 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
19 

761, 764 (7th Cir. 2017) (waiver only where argument was forgone for strategic 

purposes).5

Same thing on appeal. As the appellee in Credit Bureau I, defending a 

judgment supported by decades of precedent, the FTC was not required “to have 

raised all possible alternative grounds for affirming the district court’s original 

decision”; invoking “alternative grounds for affirmance is a privilege rather than a 

duty.” Schering Corp. v. Illinois Antibiotics, 89 F.3d 357, 358 (7th Cir. 1996); 

accord Frank v. Walker, 819 F.3d 384, 387 (7th Cir. 2016). For that reason, a 

“theory left open in both the district court and the court of appeals remains open in 

the district court.” Frank, 819 F.3d at 387. Having invoked ROSCA (and thus 

Section 19) in its complaint, the Commission preserved that alternate theory of 

recovery throughout the proceeding. See Op. 12 [A044] (citing Frank to conclude 

that the FTC’s right to claim relief under Section 19 “remains open.”). 

Brown’s cases do not support his waiver argument. See Br. 38. In Burns v. 

Orthotek, Inc. Emps.’ Pension Plan & Tr., 657 F.3d 571 (7th Cir. 2011), the Court 

5

 Brown states fleetingly that the FTC also forfeited its Section 19 argument. Br. 

26-27. Even if Brown’s unsupported and perfunctory assertion preserved the issue, 

the FTC plainly did not forfeit seeking Section 19 relief. Forfeiture is the failure to 

raise a timely argument due to inadvertence, neglect or oversight. Watson, 977 

F.3d at 629. As the district court concluded, not raising the Section 19 argument 

was due not to those factors but because doing so was unnecessary under the 

existing law. The Commission need not assert every possible basis for relief at 

every opportunity. Op. 12-13 [A044-45]. 

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20 

held that an appellate court “can affirm on any ground that the record fairly 

supports and the appellee has not waived,” id. at 575, but the Court did not suggest 

that not raising an unnecessary argument resulted in waiver for all subsequent 

purposes. In Tully v. Barada, 599 F.3d 591 (7th Cir. 2010), the Court found waiver 

where the litigant “fail[ed] to raise [an argument] in the district court,” id. at 594, 

which did not happen here. Same with Duncan Place Owners Ass’n v. Danze, Inc., 

927 F.3d 970, 973 (7th Cir. 2019). 

D. The District Court’s remedy was justified by Rule 54(c). 

Even if the Commission had not invoked ROSCA in its complaint, the 

district court’s decision should still be affirmed because the Commission was 

“entitled” to such relief. Under Fed. R. Civ P. 54(c), the court is obliged to “grant 

the relief to which each party is entitled, even if the party has not demanded that 

relief in its pleadings.” See Travis v. Gary Community Mental Health Center, Inc., 

921 F.2d 108, 112 (7th Cir. 1990) (under Rule 54(c) court must award the relief to 

which the prevailing party is entitled, even if the party did not request such relief 

and even if it “relied on the wrong statute.”); accord Old Republic Ins. Co. v. 

Employers Rein. Corp., 144 F.3d 1077, 1081 (7th Cir. 1998) (Rule 54(c) permits a 

court “to grant whatever relief is appropriate . . . even if the parties have not 

specifically requested it.”); Z Channel Ltd. Partnership v. Home Box Office, 931 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
21 

F.2d 1338, 1341 (9th Cir. 1991) (relief for damages available under Rule 54(c) 

even though complaint only sought declaratory and injunctive relief). 

By proving that Brown violated ROSCA, the Commission is entitled to the 

relief that will address that harm, namely redress to Brown’s victims. And because 

the district court’s original monetary judgment was based on “the amount of 

consumer losses,” Credit Bureau Ctr., 325 F. Supp. 3d at 867-68, the Commission 

sought (and the district court granted) the same amount of monetary relief as 

consumer redress under ROSCA and Section 19. Op. 26 [A058]. 

Brown’s arguments that Rule 54(c) does not apply fall flat. He asserts that 

the Court’s earlier decision in this matter barred the agency from receiving any 

monetary redress. Br. 44. But Credit Bureau I considered only relief under Section 

13(b); the Court rendered no judgment on other avenues. Relief remains available 

under ROSCA and Section 19 as explained above. Brown claims that the FTC 

cannot obtain redress for consumers who are not parties “entitled” to a judgment in 

an FTC enforcement action, Br. 44, but the FTC is plainly entitled under Section 

19(b) to “relief . . . necessary to redress injury to consumers” caused by Brown. 

Brown also claims that the FTC is seeking class action damages without 

complying with the requirements in Fed. R. Civ. P. 23, Br. 45, but this is a law 

enforcement matter under a statute that provides for consumer redress, not a 

private class action suit. 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
22 

Brown also contends that the FTC waived its right to Section 19 relief by 

purportedly having unclean hands because it “misus[ed] Section 13(b) and 

circumvent[ed] the procedural requirements of Section 19 and Section 5.” Br. 32-

35 (citing, inter alia, Credit Bureau I, 937 F.3d at 784).6

 The charge is baseless; 

until Credit Bureau I and AMG Capital, every court to have considered the issue 

had ruled that the FTC could obtain victim redress under Section 13(b). See Op. 

19-20 [A051-52]. And no Section 5 or 19 requirements were violated in any event. 

As Brown seemingly recognizes, Br. 33, the Commission may seek consumer 

redress resulting from a Section 5(b) administrative cease-and-desist order by 

filing a lawsuit under Section 19(a)(2) if certain conditions are met, but this case 

does not involve an administrative order. Redress is also available for Section 18 

rule violations through suit under Section 19(a)(1), but Congress determined that 

violations of ROSCA “shall be treated as” per se violations of a Section 18 rule 

without first requiring the “detailed procedures” necessary before issuing such a 

rule. See Credit Bureau I, 937 F.3d at 784 (citing 15 U.SC. § 57a(b)). 

6

 Brown relies on cases which denied equitable relief due to serious misconduct. 

Br. 35. See Mercoid Corp. v. Mid-Continent Inv., 320 U.S. 661, 670 (1944) 

(holding injunction improper where it would advance “scheme” in violation of 

antitrust laws); Precision Instr. Mfg. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816-

20 (1945) (affirming dismissal of equitable claims tainted by perjury and fraud). 

But this Court affirmed a permanent injunction to restrain Brown and CBC from 

further violations of ROSCA and other laws. 

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Finally, Brown claims he had no opportunity to take discovery or to 

effectively oppose the Section 19 relief sought by the FTC. Br. 7. Nonsense. After 

the FTC filed its Rule 59(e) motion, Brown could (and did) oppose the motion, and 

could have sought leave to take discovery, though he did not. That is likely 

because he already engaged in full discovery in the first round of litigation, 

including discovery on remedy—which was exactly the same under Section 13(b) 

as under Section 19. Indeed, Brown admitted that he “knew early in these 

proceedings (in 2017) that consumer redress was available under Section 19, and 

that the FTC was seeking to recover the full amount consumers lost to their 

scheme.” Op. 20 [A052] (citing Doc.277 at 13); Doc.277-1 at 158, 161-62. 

The district court thus correctly ruled that Brown suffered no unfair 

prejudice by having to defend against the FTC’s claim for monetary relief under 

Section 13(b) and then again under Section 19 (through ROSCA), id. at 20, 

because “[t]he FTC seeks the same remedy, for the same reasons, and for the same 

victims under [ROSCA 8404(a)] via section 19 as it did under section 13(b).” Id. at 

25. Because “[t]he same relief is being requested for the same misconduct,” id. at 

20, and Brown “had an opportunity to oppose, and did oppose, the requested award 

of restitution,” id., he was treated fairly. 

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E. The District Court’s Modified Judgment complied with 

Rule 59(e). 

Rule 59(e) permits a court to amend a previously entered judgment based on 

“an intervening change in the controlling law.” Romo, 250 F.3d at 1121 n.3; see 

also Cosgrove v. Bartolotta, 150 F.3d 729, 732 (7th Cir. 1998); Bryant v. New 

Jersey Dept. of Transp., 998 F. Supp. 438, 441-43 (D.N.J. 1998) (Rule 59(e) relief 

proper to consider legal theory that has taken on new importance due to recent 

Supreme Court decision). 

This case experienced a major change in the controlling law. At the time the 

FTC filed its complaint and through the litigated summary judgment and 

imposition of a remedy, the law allowing monetary remedies under Section 13(b) 

had been settled for decades. After the district court rendered its original judgment 

resting on that established body of law, that precedent was seismically upended by 

this Court’s decision in Credit Bureau I and the Supreme Court’s decision in AMG 

Capital.

7

 The district court thus was correct in holding that Credit Bureau I and 

AMG Capital constituted an intervening change in law under Rule 59(e) that 

warranted amending the original judgment. Op. 26 [A058] (citations omitted); see 

7

 The FTC’s motion was timely. Although Rule 59(e) motions must be filed 

within 28 days of the entry of judgment, Fed. R. Civ. P. 59(e), the clock resets if 

the judgment is modified significantly on appeal, as happened here. See, e.g., 

Charles v. Daley, 799 F.2d 343, 348 (7th Cir. 1986); cf. Berwick Grain Co. v. 

Illinois Dep’t of Agric., 189 F.3d 556, 559-60 (7th Cir. 1999). The FTC filed its 

motion just hours after the mandate issued. Brown does not challenge that timing. 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
25 

also FTC v. Cardiff, 2021 WL 3616071, at *3 (holding that AMG Capital

constituted a change in the law to permit the FTC to assert relief under Section 19 

and recognizing other decisions permitting parties to alter their theory of recovery 

in response to a change in law) (citation omitted). 

 Brown argues that the district court improperly rejected his argument that 

this Court’s Credit Bureau I decision was not an intervening change of law at all. 

He first asserts that an intervening change of law under Rule 59(e) must be to the 

text of the FTC Act itself, not “this Court’s correction to a misapplication of 

Section 13(b) of the Act.” Br. 41 (citing Credit Bureau I, 937 F.3d at 767). But he 

provides no support for that proposition, which cannot be squared with any of the 

authorities cited above. Besides, a fundamental change to the interpretation of 

statutory text is tantamount to a change in the text itself. 

He next contends that Credit Bureau I did not constitute a change in law 

under Rule 59(e) because the Seventh Circuit changed the law in this very case, as 

opposed to a different one. Br. 41-42. He again provides no authority for this novel 

principle. His reliance on Christianson v. Colt Indus. Operating Corp., 486 U.S. 

800, 815-16 (1988), fails because that case stands only for the unremarkable 

proposition that when a court decides a rule of law, that decision continues to 

govern the same issues throughout the litigation. 

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26 

 Brown asserts that the law of the case doctrine makes Credit Bureau I 

something other than an intervening change of law, but his position makes little 

sense. The law of the case under Credit Bureau I is that Section 13(b) does not 

authorize monetary relief. We do not contest that regime. But the decision was a 

sea change that upended decades of the Court’s consistent precedents, and it quite 

plainly amounted to a change in controlling law under Rule 59(e). Moreover, the 

district court correctly held that the law of the case established in Credit Bureau I 

did not prohibit any monetary remedy but left open the possibility of relief under 

ROSCA or Section 19 because Credit Bureau I did not address those provisions. 

Op. 15 [A047]; see also id. 9 [A041] (“Because the Seventh Circuit did not decide, 

expressly or impliedly, that the FTC could not pursue monetary relief under section 

19 of the FTC Act, CBC cannot argue that the law of the case doctrine precludes 

consideration of that argument now.”); see also Hanley, 2022 WL 187848, at *2 

(vacating monetary award under Section 13(b) but remanding to district court to 

determine whether relief was appropriate under Section 19). 

Brown gets no more help from the Wright & Miller treatise, which explains 

that “[p]erhaps the most obvious justifications for departing from the law of the 

case arise when there has been an intervening change of law outside the confines 

of the particular case.” Br. 42 (citing 18B Charles Alan Wright, Arthur R. Miller & 

Edward H. Cooper, Fed. Prac. & Proc. Juris. § 4478. (2d ed. 1995)). But 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
27 

exceptions to the law of the case doctrine don’t matter here because there is no law 

of the case about the availability of relief under Section 19 and ROSCA. 

Finally, even if Brown could show that the intervening decision under Rule 

59(e) had to be rendered in a separate case, AMG Capital fills the bill. It 

definitively changed the law while the FTC’s petition for certiorari in this case was 

pending.8

F. The District Court’s Modified Judgment complied with the 

Mandate. 

Brown asserts that the district court’s amended judgment “failed to comply 

with this Court’s mandate and thus violated the ‘mandate rule.’” Br. 5, 29-31. The 

argument is nothing more than a variation on his theme that this Court decided in 

Credit Bureau I that the FTC could not receive a monetary remedy under any 

theory, and it fails for all the same reasons. 

The mandate rule, a corollary of the law of the case doctrine, requires a 

lower court “to adhere to the command of a higher court” made earlier in the same 

case. Delgado v. US. Dept. of Justice, 979 F.3d 550, 557 (7th Cir. 2020). But the 

mandate controls only “matters within its compass” and “does not extend to issues 

8

 Brown’s reliance (Br. 42) on GSS Group Ltd. v. Nat’l Port Auth., 680 F.3d 805, 

812 (D.C. Cir. 2012), for the proposition that Rule 59(e) does not allow arguments 

that could have been raised prior to judgment is misplaced. GSS Group did not 

involve an intervening change in controlling law; it dealt only with late-filed 

assertions that had never been raised before, including in the complaint. 

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an appellate court did not address.” Moore v. Anderson, 222 F.3d 280, 283-284 

(7th Cir. 2000) (cleaned up). In other words, the “reach of the mandate is 

coextensive with the reach of [the appellate court’s] holding” and thus “governs 

only that which was actually decided.” Id.; see also Big Ridge, Inc. v. NLRB, 808 

F.3d 705, 712 (7th Cir. 2015). 

Brown claims that, by vacating the monetary judgment in Credit Bureau I 

under Section 13(b), this Court determined that the FTC could not obtain a 

monetary judgment against Brown under any other law provision. Br. 30-31; see 

also id. 4-5 (“the vacated award [in Credit Bureau I] included the FTC’s ROSCA 

allegations”); id. 44 (“this Court already held the FTC was not entitled to monetary 

relief” at all because it held that such relief could not be found under Section 

13(b)). That grossly mischaracterizes this Court’s earlier decision. As discussed 

above, and as properly recognized by the district court, the mandate of Credit 

Bureau I is that monetary relief is unavailable under Section 13(b). See Op. 7 

[A039] (Credit Bureau I opinion “plainly forecloses any further consideration of 

awarding restitution under section 13(b).”). This Court did not decide, expressly or 

by implication, that the FTC could not pursue monetary relief under section 19 of 

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29 

the FTC Act or ROSCA § 8404(a). See Moore, 222 F.3d at 283–84. Neither did the 

Court hold that the FTC filed this case exclusively under Section 13(b).9

 

Quite to the contrary, Credit Bureau I expressly recognized the availability 

of relief under Section 19. 937 F.3d at 773-74. Thus, as the district court 

recognized, “reading the mandate in conjunction with the opinion leaves just one 

definite conclusion: the availability of restitution under Section 13(b) of the FTC 

Act is precluded. Because the mandate rule binds a lower court to only “the 

resolution of any points that the higher court has addressed,” the Court’s mandate 

here did not prevent the district court from considering whether the FTC was 

entitled to relief under Section 19 and ROSCA. See Op. 10 [A042] (citing Kovacs 

v. United States, 739 F.3d 1020, 1024 (7th Cir. 2014)).10 

9

 Brown argues that the FTC did not seek to amend its complaint to expressly 

request monetary relief under Section 19, Br. 30, but the complaint already did so, 

as discussed at pages 14-15 above. 

10 None of the cases cited by Brown, Br. 29-30, involved a lower court 

addressing an issue that the appellate court “left open” like here. See Kovacs v. 

U.S., 739 F.3d 1020, 1024-25 (7th Cir. 2014) (district court violated mandate by 

reinstating damages found to be time-barred); Matter of Cont’l Ill. Securities 

Litigation, 985 F.2d 867, 869 (7th Cir. 1993) (district court violated mandate by 

failing to comply with order regarding attorneys’ fees); Donohoe v. Consol. 

Operating & Prod. Corp., 30 F.3d 907, 910-11 (7th Cir. 1994) (district court 

complied with mandate instruction to consider particular claim). 

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30 

G. The District Court’s calculation of redress was proper. 

Brown argues that, even if a monetary remedy was appropriate, the district 

court’s modified judgment exceeded the amount of redress allowed under Section 

19(b). Br. 23. The claim is that the $5.2 million judgment reflected all payments 

received from victims during the entire period of the Craigslist/fake landlord 

scheme, but that because the revised remedy is based only on ROSCA violations, 

“[r]edress should be limited to consumers who ordered on the ROSCA-defective 

websites during the 14-month period of their operation.” Br. 47. The judgment 

therefore should exclude, Brown argues, any money he took from victims before 

December 1, 2015, because the FTC failed to prove ROSCA violations prior to that 

date. Id; see also Br. 25 n.3. 

 The problem for Brown is that the district court found in its original order 

that Brown had forfeited any claim that his websites did not violate ROSCA before 

December 1, 2015. Credit Bureau Ctr., 325 F. Supp. 3d at 869 n.5. He has never 

challenged (or even addressed) the forfeiture ruling either in his appeal in Credit 

Bureau I, see FTC v. Credit Bureau Ctr., LLC, No. 18-3310 (7th Cir.) (Docs. 23, 

38), during proceedings below after Credit Bureau I, see, e.g., Doc.277; Doc.282 

at 12, or in his opening brief in this appeal. Brown has given no reason why that 

forfeiture ruling should be vacated or his argument revived. 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
31 

But even if he had not forfeited the argument, record evidence supports the 

district court’s award. Section 4 of ROSCA, 15 U.S.C. § 8403, prohibits the use of 

a “negative option feature” to sell goods or services on the internet unless the seller 

(1) “clearly and conspicuously discloses all material terms of the transaction” and 

(2) “obtains a consumer’s express informed consent before charging the 

consumer.” See 325 F. Supp. 3d at 862-64.11 There is no question that Brown’s 

websites created on December 1, 2015, violated ROSCA. The district court held 

that those websites were “virtually devoid of any mention of the [creditmonitoring] service aside from the statement that the customer is to be billed for 

it.” Id. at 863 (emphasis in original). “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.” Id. (emphasis in original). This Court affirmed, 

agreeing that Brown failed to provide “all material terms of the transaction” in 

violation of § 8403, because his “websites did not provide certain information that 

ROSCA requires – namely that the subscription was for a credit-monitoring 

service.” 937 F.3d at 770. 

11 A third element of § 8403 is not at issue. ROSCA defines a “negative option 

feature” as 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.” See 15 U.S.C. § 8403 

(incorporating by reference 16 C.F.R. § 310.2). 

 

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The record evidence also shows that the pre-December 1, 2015, websites 

violated ROSCA in the same way as the later modified ones. See, e.g., Doc.215, 

¶51 [SA027-028]; Doc.206-1 at 9 (Brown Dec. ¶23.b) [SA036] (“The negative 

option feature in the Subject Websites are identical to the negative option feature 

used in the Pre-Existing Websites.”). Brown’s failure to disclose all the material 

terms in the transaction in the pre-December 1, 2015, sites is further supported by 

the thousands of chargebacks incurred, see Doc.194 at 29-30 ¶¶72-73; Credit 

Bureau Ctr., 325 F.Supp.3d at 856 (deemed admitted), and the many consumer 

complaints about unauthorized charges, Doc.194 at 34 ¶87; Doc.11-3 at 70-71 

(McKenney Dec. ¶¶ 76e & f), received before December 2015. The record thus 

shows that Brown’s websites violated ROSCA during the entire 2014-17 period. 

The district court therefore properly calculated monetary relief on the basis of 

Brown’s net revenue—the amount consumers paid—during this time.12

12 If the Court determines that the trial court erred in its redress calculation, the 

Commission urges the Court to conclude that any such error was harmless in light 

of Brown’s inability to pay. See Butler v. Kijakazi, 4 F.4th 498, 504 (7th Cir. 2021) 

(“In assessing whether an error is harmless, we examine the record to determine 

whether we can “predict with great confidence what the result of remand will be.”) 

(citation omitted). Remand will almost certainly not change the amount of redress 

consumers receive because the Commission has collected only 20% of the $5.2 

million judgment and is unlikely to obtain more. Doc.268 at 3. While Brown now 

admits that his liability is at least $2,782,381 due to “consumers who ordered on 

the ROSCA-defective websites” beginning in December 2015, Br. 47, that amount 

is more than twice the funds collected. Remand will achieve nothing other than 

delaying redress to injured consumers. 

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Brown also argues that the court’s monetary judgment constitutes a penalty 

barred under Section 19(b) because it was based on gross receipts and not net 

profits. Br. 20-22 (citing Kokesh v. SEC, 137 S.Ct. 1635, 1643-45 (2017); Liu v. 

SEC, 140 S. Ct. 1936 (2020)). Kokesh is wholly inapposite here, as it dealt only 

with a statute of limitations. The securities laws at issue in Liu allow only 

“equitable relief”; Section 19(b), by contrast, grants the power to “grant such relief 

as the court finds necessary to redress injury to consumers,” including “the refund 

of money.” 15 U.S.C. § 57b(b). Thus, remedies under Section 19(b) are not limited 

to unjust gains but can “restore the victim to the status quo”—in other words, full 

refunds. FTC v. Figgie Int’l, Inc., 994 F.2d 595, 606-07 (9th Cir. 1993). Brown 

himself acknowledges that Section 19 allows relief necessary “to make consumers 

whole.” Br. 13 (citation omitted). See also U.S. v. MyLife.com, Inc., No. CV 20-

6692-JFW(PDX), 2021 WL 4891776, at *13 (C.D. Cal. Oct. 19, 2021) (concluding 

that “[t]he appropriate method to redress [injured] consumers under Section [19(b)] 

is to refund the amounts consumers paid” for ROSCA-violating subscriptions and 

thus awarding $15.8 million as consumer redress based on the defendant’s net 

revenues). 

Moreover, Liu did not limit equitable remedies to net profits “when the 

entire profit of a business or undertaking results from the wrongful activity.” Liu, 

140 S. Ct. at 1950 (cleaned up). That description applies foursquare to Brown’s 

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34 

Craigslist scheme, which this Court has already described as “fraudulent.” Credit 

Bureau I, 937 F.3d at 767. 

H. Monetary redress does not require asset tracing. 

Brown next contends that Liu requires that a remedy may include only funds 

traced to his illegal scheme. Br. 46 (citing Liu at 1943-44). The district court 

rejected the claim in its initial ruling in this case, 325 F. Supp. 3d at 869, and it did 

so again in the order on review, holding that Liu did not address asset tracing. Op. 

21-22 [A053-54]. That ruling was correct. Brown identifies nothing in Liu that 

requires, or even discusses, asset tracing. The dissent discusses the issue, but that 

discussion is not the law.13 

Brown’s position, if accepted, would give violators an easy out that would 

undo the intent of Congress. He admits he commingled stolen money with other 

funds but then argues that any commingled untainted funds cannot be used for 

redress. Br. 47. It is easy to see why courts have rejected that approach, instead 

placing the burden on the wrongdoer to establish the legitimacy of commingled 

money. Febre, 128 F.3d at 535 (citing SEC v. First City Fin. Corp., 890 F.2d 1215, 

1232 (D.C. Cir. 1989)); see FTC v. Bronson Partners, 654 F.3d 359, 373 n.8 (2nd 

13 In its original ruling, the district court held that “[t]he [FTC Act] authorizes 

legal restitution, which does not impose . . . tracing requirements.” 325 F. Supp. 3d 

at 869. That reasoning applies even more forcefully under Section 19, which as 

discussed allows full refunds. 

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35 

Cir. 2011) (explaining that courts apply an irrebuttable presumption that funds in 

commingled accounts belong to the victims of wrongdoing, not to the 

wrongdoers); FTC v. Commerce Planet, 815 F.3d 593, 601 (9th Cir. 2016) 

(“adopting those tracing requirements would greatly hamper the FTC’s 

enforcement efforts”).14

II. BROWN’S ARGUMENT THAT THE MODIFIED JUDGMENT PERMITS 

BROADER RELIEF THAN AUTHORIZED BY SECTION 19 IS BOTH 

WAIVED AND PREMATURE 

The district court’s remedial order directs consumer redress as plainly 

permitted by Section 19. Op. 26 [A058]. The judgment also states: 

“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.” 

 

Mod. Judg. 25, § IX.D [A025]. Brown asserts that anything besides redress 

constitutes “exemplary or punitive damages” prohibited by Section 19, and he 

14 Brown wrongly contends that the FTC agreed that 52% of his revenue derived 

from legitimate sources so that only 48% of money collected should be returned as 

consumer redress. Br. 47. In fact, the FTC disputed those figures. See Doc.211 at 

32 [SA038]. The entire remedy is based on tainted revenue. 

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36 

therefore has a right to keep any funds remaining after redress. Br. 19. Brown 

waived that argument, but the Court need not reach it in any event. 

A. Brown waived his challenge. 

Brown made no such challenge to the remedial order in the district court and 

may not do so now. See Poullard v. McDonald, 829 F.3d 844, 855 (7th Cir. 2016). 

His excuses are insubstantial. First, he says he preserved the issue when he 

contended that any monetary relief under Section 19 should be limited to CBC’s 

“proceeds” and to the websites that violated ROSCA. Br. 26 (citing Doc.277 at 20-

22). These objections clearly dealt with the amount of the remedy, not with the 

disposition of leftover money. 

He also complains that ordinary principles of waiver should not apply 

because he “could hardly have anticipated” that the amended judgment would 

provide for “disgorgement to Treasury” or other non-redress distribution features. 

Br. 26. But in May 2021, Brown learned of the proposed version of the modified 

judgment containing the very distribution provision he now complains of. See

Doc.275 at 11 n.3 [SA052] (referencing proposed modified final judgment and 

modifications the FTC sought from the court’s original judgment, which did not 

include any changes to the fund distribution provision). Indeed, those clauses were 

simply carried over from the original judgment, with which Brown was surely 

familiar. He even referenced the judgment’s distribution of “funds to consumers or 

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37 

to the United States Treasury” in his motion to stay pending appeal. Doc.255 at 6 

[SA044]. Any surprise is feigned. 

Brown fares no better with the idea that waiver would work a “miscarriage 

of justice.” Br. 28. His reliance on Hormel v. Helvering, 312 U.S. 552, 557-58 

(1941), and Hicks v. Avery Drei, LLC, 654 F.3d 739, 744 (7th Cir. 2011), is 

misplaced. Hormel warned against litigants being “surprised on appeal” by “issues 

upon which they have had no opportunity to introduce evidence.” 312 U.S. at 556. 

That concept does not help Brown, who had a full opportunity below to challenge 

the judgment but never did. Hicks simply refuted any notion that the appellant’s 

forfeiture in that case should be excused due to “exceptional circumstances” or 

because “a miscarriage of justice” might result. 654 F.3d at 744. 

Finally, Brown argues in passing that his argument is jurisdictional and 

“jurisdictional issues are not forfeited.” Br. 29. That is wrong. The issue is whether 

the district court had statutory authority to grant a particular remedy, not whether it 

had subject-matter jurisdiction. 

B. The Court need not reach the question whether the Modified 

Judgment orders impermissible relief. 

It would be premature for the Court to address at this point whether the 

judgment properly addresses funds leftover after redress for two reasons. First, it is 

very likely that there will be no funds remaining after distribution to injured 

consumers. As explained above, consumers lost $5.2 million to Brown’s scam, yet 

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38 

the FTC has recovered only 20% of that amount. The district court recognized that, 

“[i]n reality the only amount likely to be paid on the judgment is the approximately 

$1,100,000 held by FTC or frozen.” Doc.268 at 3 [SA047]. Furthermore, complete 

distribution of the money to the victims is highly likely, as the Commission has 

identified them and knows how much they paid. See Doc.194-11 at 3 (McKenney 

3rd Supp Dec. ¶ 6) [SA026]. The overwhelming likelihood is that all collected 

funds will be used for direct consumer redress. 

Second, even if residual funds remain, the FTC must seek court approval for 

a distribution plan related to Brown’s violations and consistent with Section 19(b). 

Mod. Judg. 25 § IX.D [A025]. Indeed, Section 19(b) authorizes not just direct 

consumer redress, but also “public notification respecting the rule violation.” 15 

U.S.C. § 57b(b). The modified judgment expressly allows expenditure of leftover 

funds for “consumer information remedies” if the court approves. Mod. Judg. 25 

§ IX.D [A025]. Because the Commission must first obtain district court approval 

for the disposition of any leftover funds this Court need not address the matter 

now. 

Brown contends that the Commission cannot “keep the money” collected 

from defendants and that is not used for consumer redress. Br. 16. Whether or not 

that is true, the Commission has never sought to do so, and the issue is unlikely to 

arise given the fraction of the total amounts consumers lost that has been collected. 

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39 

Moreover, the district court would have to approve any such plan. Brown is 

therefore wrong that the FTC can decide on its own that ‘“redress’ is impracticable 

and disgorge the award to Treasury.” Br. 19. 

 Brown’s contentions now are hypothetical, as the issues are not yet ripe. 

This Court should follow the course charted by the Supreme Court in Liu, where it 

deemed a directly analogous issue inappropriate to consider until there was a 

“specific order in this case directing” such distribution. 140 S. Ct. at 1948-49. 

CONCLUSION 

For the foregoing reasons, the district court’s memorandum opinion and 

modified final judgment should be affirmed. 

Respectfully submitted, 

JAMES REILLY DOLAN

Acting General Counsel 

JOEL MARCUS

Deputy General Counsel 

/s/ Michael D. Bergman 

G MICHAEL D. UY G. W ER ARD B GMAN

ELIZABETH C. SCOTT Attorney 

 Attorneys Federal Trade Commission 

Federal Trade Commission 600 Pennsylvania Ave., N.W. 

Chicago, IL 60604 Washington, D.C. 20580 

(202) 326-3184 

Dated: April 4, 2022 mbergman@ftc.gov 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47
CERTIFICATE OF COMPLIANCE 

I certify that the foregoing Brief of the Federal Trade Commission 

complies with the type-volume limitation in Fed. R. App. P. 32(a)(7) and 7th

Cir. R. 32(c) because it contains 9641 words, excluding the parts of the brief 

exempted by Fed. R. App. P. 32(f). It also complies with the typeface 

requirements of Fed. R. App. P. 32(a)(5) and 7th Cir. R. 32(b), and the type 

style requirements of Fed. R. App. P. 32(a)(6), because the brief has been 

prepared in a proportionally spaced typeface using 14-point Times New 

Roman type style. 

Date: April 4, 2022 /s/Michael D. Bergman 

Michael D. Bergman 

Attorney, Federal Trade Commission 

CERTIFICATE OF SERVICE 

 I certify that on April 4, 2022, I served the foregoing Brief of the 

Federal Trade Commission on all counsel of record through the Court’s 

electronic CM/ECF system. 

Date: April 4, 2022 /s/ Michael D. Bergman 

 Michael D. Bergman 

 Attorney, Federal Trade Commission 

Case: 21-2945 Document: 27 Filed: 04/04/2022 Pages: 47