FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

FEDERAL TRADE COMMISSION, 

Plaintiff-Appellee,

v.

CONSUMER DEFENSE, LLC, a

Nevada limited liability company;

CONSUMER LINK, INC., a Nevada

corporation; BENJAMIN R. HORTON,

in his individual and corporate

capacity;

Defendants,

and

PREFERRED LAW, PLLC, a Utah

professional limited liability

company; AMERICAN HOME LOAN

COUNSELORS, a Utah limited liability

company; CONSUMER DEFENSE

GROUP, LLC, FKA Modification

Review Board, LLC, a Utah limited

liability company; CONSUMER

DEFENSE, LLC, a Utah limited

liability company; BROWN LEGAL,

INC., a Utah corporation; AM

PROPERTY MANAGEMENT, LLC, a

Utah limited liability company;

FMG PARTNERS, LLC, a Utah

No. 18-15462

D.C. No.

2:18-cv-00030-

JCM-PAL

OPINION
2 FTC V. PREFERRED LAW

limited liability company; ZINLY,

LLC, a Utah limited liability

company; JONATHAN P. HANLEY, in

his individual and corporate

capacity; SANDRA X. HANLEY, in her

individual and corporate capacity;

AMERICAN HOME LOANS, LLC, a

Utah limited liability company,

Defendants-Appellants,

_____________________________

THOMAS W. MCNAMARA,

Receiver-Appellee.

Appeal from the United States District Court

for the District of Nevada

James C. Mahan, District Judge, Presiding

Argued and Submitted September 14, 2018

San Francisco, California

Filed June 17, 2019

Before: Johnnie B. Rawlinson, Paul J. Watford,

and Michelle T. Friedland, Circuit Judges.

Opinion by Judge Rawlinson 
FTC V. PREFERRED LAW 3

SUMMARY*

Federal Trade Commission

The panel affirmed the district court’s order entering a

preliminary injunction freezing all of the defendants’ assets

in connection with Consumer Defense Global’s loan

modification business operations in an action initiated by the

Federal Trade Commission (FTC) alleging violations of the

FTC Act and Regulation O, 12 C.F.R. Part 1015 – Mortgage

Assistance Relief Services.

The parties agreed that the FTC brought the action

pursuant to the second proviso of Section 13(b) of the FTC

Act, which allows the FTC to seek injunctive relief without

initiating administrative action, but disputed whether the FTC

was required to demonstrate a likelihood of irreparable harm

to obtain relief.

The panel held that although in the ordinary case a

showing of irreparable harm was required to obtain injunctive

relief, no such showing was required when injunctive relief

was sought in conjunction with a statutoryenforcement action

where the applicable statute authorized injunctive relief. The

panel further held that circuit precedent to that effect did not

present an irreconcilable conflict with the holding in Winter

v. Natural Resource Defense Council, Inc., 555 U.S. 7, 20

(2008), and remained valid. The panel concluded that the

district court committed no error in granting the motion for a

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
4 FTC V. PREFERRED LAW

preliminary injunction without requiring the FTC to make the

traditional showing of irreparable injury.

The panel addressed challenges to the district court’s

jurisdiction and the scope of the injunction in a concurrently

filed memorandum disposition.

COUNSEL

Karra J. Porter (argued) and Sarah E. Spencer, Christensen &

Jensen, P.C., Salt Lake City, Utah, for DefendantsAppellants.

Imad D. Abyad (argued), Attorney; Joel Marcus, Deputy

General Counsel; Alden F. Abbott, General Counsel;Gregory

A. Ashe and Adam M. Wesolowski, Attorneys; J. Reilly

Dolan, Acting Director; Bureau of Consumer Protection;

Federal Trade Commission, Washington D.C.; for PlaintiffAppellee.

No appearance for Receiver-Appellee.
FTC V. PREFERRED LAW 5

OPINION

RAWLINSON, Circuit Judge: 

This appeal stems from an action initiated by the Federal

Trade Commission (FTC) alleging violations of the Federal

Trade Commission Act, 15 U.S.C. § 45, and Regulation O,

12 C.F.R. Part 1015 - Mortgage Assistance Relief Services

(the MARS Rule). Defendants-Appellants Preferred Law,

PLLC; American Home Loan Counselors;Consumer Defense

Group, LLC; Consumer Defense, LLC; Brown Legal, Inc.;

AM PropertyManagement, LLC; FMG Partners, LLC; Zinly,

LLC; Jonathan P. Hanley; Sandra X. Hanley; and American

Home Loans, LLC (collectively, Consumer Defense Global)

appeal the district court’s order entering an injunction

freezing all of the defendants’ assets in connection with

Consumer Defense Global’s loan modification business

operations.1 

Consumer Defense Global contends that the district court

erred as a matter of law because the court presumed

irreparable harm, rather than requiring that the FTC

demonstrate a likelihood of irreparable harm. We have

jurisdiction pursuant to 28 U.S.C. § 1292(a)(1), and we

affirm.2

1Consumer Defense-Nevada, Consumer Link-Nevada, andBenjamin

Horton do not join the instant appeal.

2 Consumer Defense Global also challenges the district court’s

jurisdiction and the scope of the injunction. We address these claims in a

concurrently filed memorandum disposition.
6 FTC V. PREFERRED LAW

I. BACKGROUND

In January of 2018, the FTC brought an action in federal

district court in the District of Nevada against Consumer

Defense, LLC (Consumer Defense-Nevada); Consumer Link,

Inc. (Consumer Link-Nevada); Benjamin Horton, an attorney

employed by Consumer Defense Global; and Consumer

Defense Global. The FTC alleged that Consumer DefenseNevada, Consumer Link-Nevada, Benjamin Horton, and

Consumer Defense Global, directed and controlled by

Jonathan Hanley, Sandra Hanley, and Benjamin Horton,

“operated as a common enterprise while engaging in the

deceptive acts and practices” of “luring [financiallydistressed

homeowners] into signing contracts for MARS services with

promises that they [would] receive expert legal assistance . . .

that [would] stop them from going into foreclosure and

modify their mortgage loans to make their payments more

affordable.” 

The FTC asserted that, “through an interrelated network

of companies” with common ownership, management,

physical locations, commingled funds, and marketing

materials, the defendants deceived consumers by regularly

misrepresenting the likelihood of obtaining a successful

modification, improperly charging advance fees for

modification services, suggesting an affiliation with or

endorsement by government programs, and instructing

customers to cease making their mortgage payments. As part

of this common enterprise, the FTC alleged, each of the

defendants had transacted business in the District of Nevada,

as well as throughout the United States. The FTC further

alleged that, in numerous instances, the defendants failed to

obtain relief for their customers, sometimes never contacting

the lenders at all. As a result of these practices, consumers
FTC V. PREFERRED LAW 7

incurred substantial fees and penalties, with some entering

foreclosure and losing their homes.

In connection with these activities, the FTC charged the

defendants with two violations of the FTC Act: making

“deceptive representations regarding substantially more

affordable loan payments, substantially lower interest rates,

or foreclosure avoidance” (Count I), and making “deceptive

representations regarding loan modification services” (Count

II). The FTC charged the defendants with four violations of

the MARS Rule: requesting “advance payments for mortgage

assistance relief services” (Count III); making prohibited

representations that consumers seeking loan modifications

“cannot or should not contact or communicate with his or her

lender” (Count IV) and material misrepresentations regarding

the likelihood of obtaining a modification, the defendants’

affiliation with governmental agencies, and the consumer’s

obligation to make payments on the current loan (Count V);

and failing to clearly and prominently make required

disclosures (Count VI). The FTC sought an injunction and

other equitable relief pursuant to Section 13(b) of the FTC

Act, 15 U.S.C. § 53(b).

On the same day, the FTC filed an emergency ex parte

motion for a temporary restraining order (TRO), for an asset

freeze, for appointment of a receiver, and for an order to

show cause (OSC) as to why a preliminary injunction should

not issue. The district court granted the motion.

In support of its request for a preliminary injunction, the

FTC asserted that it was likely to succeed on the merits, and

that the balance of equities tipped in the public’s favor. The

FTC maintained that irreparable harm was presumed for

purposes of a statutory enforcement action, but in a footnote
8 FTC V. PREFERRED LAW

argued that it could nevertheless demonstrate irreparable

harm: without relief, the FTC asserted, there would be a

“likely destruction of evidence and dissipation of assets,” and

more consumers were likely to suffer financial harm from the

defendants’ activities. 

The defendants filed an opposition to the preliminary

injunction request. Consumer Defense Global conceded that

“they failed to make MARS-worded disclosures to some

consumers,” and “in a number of instances, they collected

fees for services before the execution of a written agreement

between the consumer and his or her loan holder or servicer,

which is a violation of the MARS Rule.” Nevertheless,

Consumer Defense Global contended that a preliminary

injunction was unwarranted because they had secured loan

modifications for the majority of their customers, and with

only a few exceptions, the FTC failed to demonstrate that

Consumer Defense Global neglected to provide MARSrequired disclosures, or that consumers were harmed by the

absence of required disclosures. Consumer Defense Global

contended that the FTC did not demonstrate irreparable harm

or a likelihood of success on the merits.

Following a hearing, the district court entered an order

preliminarily enjoining Consumer Defense Global from

engaging in various business practices that the court

determined to be in violation of the FTC Act and the MARS

Rule, as well as freezing all of Consumer Defense Global’s

assets.

Consumer Defense Global appealed the district court’s

order, contending that the district court erred by granting an

injunction without requiring the FTC to demonstrate

irreparable harm.
FTC V. PREFERRED LAW 9

II. LEGAL STANDARDS

“A preliminary injunction should only be set aside if the

district court abused its discretion or based its decision on an

erroneous legal standard or on clearly erroneous findings of

fact. . . .” Puente Arizona v. Arpaio, 821 F.3d 1098, 1103

(9th Cir. 2016) (citation and internal quotation marks

omitted). “We review the district court’s legal conclusions

de novo, the factual findings underlying its decision for clear

error, and the injunction’s scope for abuse of discretion.”

K.W. ex rel. D.W. v. Armstrong, 789 F.3d 962, 969 (9th Cir.

2015) (citation omitted). 

III. DISCUSSION

Section 13(b) of the FTC Act contains two provisos under

which the FTC may bring an action to enjoin activity in

violation of the Act. The first proviso applies when the FTC

intends to initiate administrative action and provides in

pertinent part:

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 . . .

15 U.S.C. § 53(b). This proviso “places a lighter burden on

the Commission than that imposed on private litigants by the

traditional equity standard; the Commission need not show

irreparable harm to obtain a preliminary injunction.” F.T.C.
10 FTC V. PREFERRED LAW

v. Warner Commc’ns Inc., 742 F.2d 1156, 1159 (9th Cir.

1984) (citations omitted). 

The second proviso allows the FTC to seek injunctive

relief without initiating administrative action and states: 

“Provided further, That in proper cases the Commission may

seek, and after proper proof, the court may issue, a permanent

injunction.” 15 U.S.C. § 53(b) (emphasis in the original).

Interpreting the second proviso, we have held that: 

[B]ecause the district court has the power

to issue a permanent injunction to enjoin acts

or practices that violate the law enforced by

the Commission, it also has authority to grant

whatever preliminary injunctions are justified

by the usual equitable standards and are

sought in accordance with [Federal] Rule [of

Civil Procedure] 65(a).

F.T.C. v. H. N. Singer, Inc., 668 F.2d 1107, 1111 (9th Cir.

1982); see also Fed. R. Civ. P. 65. 

The parties agree that the FTC brought the instant action

pursuant to the second proviso, but dispute whether the FTC

was required to demonstrate a likelihood of irreparable harm

to obtain relief. Consumer Defense Global contends that the

FTC was required to demonstrate a likelihood of irreparable

harm, as established in Winter v. Natural Resource Defense

Council, Inc., 555 U.S. 7, 20 (2008). The FTC counters that

in a case involving statutory enforcement where the

governing statute authorizes injunctive relief, irreparable

harm is presumed, and a court need only weigh the equities

and consider the likelihood of success on the merits. See
FTC V. PREFERRED LAW 11

F.T.C. v. World Wide Factors, Ltd., 882 F.2d 344, 346–47

(9th Cir. 1989), as amended; see also United States v. Odessa

Union Warehouse Co-op, 833 F.2d 172, 175–76 (9th Cir.

1987). 

The FTC’s position is supported by our precedent. See

World Wide Factors, 882 F.2d at 346 (“Pursuant to 15 U.S.C.

§ 53(b), the district court is required (i) to weigh equities; and

(ii) to consider the FTC’s likelihood of ultimate success

before entering a preliminary injunction. Harm to the public

interest is presumed.”) (citation omitted) (emphasis added);

see also Odessa, 833 F.2d at 175 (“Where an injunction is

authorized by statute, and the statutory conditions are

satisfied . . ., the agency to whom the enforcement of the right

has been entrusted is not required to show irreparable injury

. . . .” (citations and footnote reference omitted).3

Consumer Defense Global relies on the well-established

injunction standard most recently articulated by the Supreme

Court in Winter, 555 U.S. at 20:

A plaintiff seeking a preliminary

injunction must establish that he is likely to

succeed on the merits, that he is likely to

suffer irreparable harm in the absence of

preliminary relief, that the balance of equities

tips in his favor, and that an injunction is in

the public interest. (Emphasis added).

3

It is undisputed that the FTC otherwise satisfied the statutory

conditions for imposition of an injunction.
12 FTC V. PREFERRED LAW

Our precedent eliminating the requirement of a showing

of irreparable harm in cases of statutory enforcement, where

an injunction is authorized by the applicable statute, pre-dates

the Supreme Court’s Winter decision. Consequently, the

question arises whether our cases eliminating the irreparable

harm showing for actions involving statutory enforcement,

where an injunction is authorized by the applicable statute,

remain good law. We addressed how to approach this kind of

question in Miller v. Gammie, 335 F.3d 889, 899 (9th Cir.

2003) (en banc). In Miller, we held that if a “court of last

resort [has] undercut the theory or reasoning underlying the

prior circuit precedent in such a way that the cases are clearly

irreconcilable,” the prior circuit precedent cannot stand. Id. at

900. If the cases are “clearly irreconcilable,” the prior

irreconcilable case from the lower court is “effectively

overruled.” Id. 

In applying the holding of Miller, we have emphasized

that the “clearly irreconcilable” requirement “is a high

standard.” Rodriguez v. AT & T Mobility Servs. LLC, 728

F.3d 975, 979 (9th Cir. 2013). We explained that if we can

apply our precedent consistently with that of the higher

authority, we must do so. See id. at 979–80. We clarified that

“[i]t is not enough for there to be some tension between the

intervening higher authority and prior circuit precedent.” Id.

(quoting Lair v. Bullock, 697 F.3d 1200, 1207 (9th Cir.

2012)). 

Admittedly, there is some tension between the Supreme

Court’s holding in Winter and our holdings in World Wide

Factors and Odessa. Winter includes the requirement of a

showing of irreparable harm, and World Wide Factors and

Odessa eliminate that requirement for cases involving
FTC V. PREFERRED LAW 13

statutory enforcement where the applicable statute authorizes

injunctive relief. See Winter, 555 U.S. at 20; cf. World Wide

Factors, 882 F.2d at 346; Odessa, 833 F.2d at 175. However,

as discussed, mere tension between the cases does not meet

the high standard of irreconcilable conflict. See Robertson,

875 F.3d at 1291. Rather, we must determine if the cases can

be applied consistently. See id. 

We conclude that the cases can be applied consistently.

Notably, the irreparable harm requirement articulated in

Winter is also present in earlier Supreme Court cases

referenced in Winter. See e.g., Amoco Prod. Co. v. Village of

Gambell, 480 U.S. 531, 542 (1987) (“[T]he bases for

injunctive relief are irreparable injury and inadequacy of legal

remedies . . . .”). Therefore, Winter did not purport to

introduce the irreparable harm requirement as a new

component of the preliminary injunction rubric, but clarified

application of the well-established equitable test for a

preliminary injunction. Indeed, in Odessa we acknowledged

pre-Winter that “[t]o obtain a preliminary injunction, the

movant must ordinarily show that there exists a significant

threat of irreparable injury.” 833 F.2d at 175 (emphasis

added). We then proceeded to describe the exception to the

ordinary circumstance: when the injunction is sought as a

corollary to statutory enforcement, and the applicable statute

authorizes injunctive relief. See id. 

The D.C. Circuit discussed this distinction at some length

in F.T.C. v. Weyerhaeuser Co., 665 F.2d 1072, 1081 (D.C.

Cir. 1981). Addressing 15 U.S.C. § 53(b), the D.C. Circuit

noted that the Conference Report explaining “the derivation

and purpose” of § 53(b) confirmed Congressional intent “not

to impose the traditional . . . standard of irreparable damage
14 FTC V. PREFERRED LAW

. . .” (quoting H.R. Rep. No. 93-624 at 18, (1973), as

reprinted in 1973 U. S. C. C. A. N. 2523, 2533). The D.C.

Circuit emphasized that Congress “intended to codify the

decisional law” that “lightened the agency’s burden by

eliminating the need to show irreparable harm.” Id. at 1082.

In such cases, where the statute specifically authorizes

injunctive relief, “irreparable injury should be presumed from

the very fact that the statute has been violated.” United States

v. Hayes Int’l Corp., 415 F.2d 1038, 1045 (5th Cir. 1969). By

specifically authorizing injunctive relief upon a showing that

the statute was violated, Congress essentially incorporated a

presumption of irreparable injury into § 13(b). See id.; see

also Weyerhaeuser, 665 F.2d at 1082.

These cases demonstrate how Winter, World Wide

Factors, and Odessa can co-exist. In the ordinary case, i.e.

one not involving statutory enforcement, the traditional

irreparable injury showing is required. On the other hand, in

a case involving statutory enforcement, where the applicable

statute authorizes injunctive relief, the traditional irreparable

injury showing is not required. Because Winter did not

address injunctive relief in the context of statutory

enforcement and because the cases can be easily reconciled,

the high standard described in Miller for invalidating prior

cases due to intervening authority has not been met. See

Robertson, 875 F.3d at 1291. Thus, our precedent eliminating

the traditional showing of irreparable harm in cases of

statutoryenforcement, where the applicable statute authorizes

injunctive relief, remains intact. The district court committed

no error in presuming the existence of irreparable injury in

accordance with our precedent. 
FTC V. PREFERRED LAW 15

IV. Conclusion

Although in the ordinary case a showing of irreparable

harm is required to obtain injunctive relief, no such showing

is required when injunctive relief is sought in conjunction

with a statutory enforcement action where the applicable

statute authorizes injunctive relief. Our precedent to that

effect does not present an irreconcilable conflict with Winter

and remains valid. The district court committed no error in

granting the motion for preliminary injunction without

requiring the FTC to make the traditional showing of

irreparable injury.

AFFIRMED.