Court Opinion

ID: 4694473
Source: CourtListenerOpinion
Date Created: 2021-06-10 20:01:31.339074+00
Date Added: 2024-06-11T08:05:29.695316
License: Public Domain

NOT FOR PUBLICATION                          FILED
                   UNITED STATES COURT OF APPEALS                       JUN 10 2021
                                                                    MOLLY C. DWYER, CLERK
                                                                     U.S. COURT OF APPEALS
                          FOR THE NINTH CIRCUIT

FEDERAL TRADE COMMISSION,                      No. 17-15600

               Plaintiff-Appellee,
                                               D.C. No. 2:08-CV-00620
 v.

PUBLISHERS BUSINESS SERVICES,                  MEMORANDUM*
INC. et al.,

               Defendants-Appellants.

                On Remand from the United States Supreme Court

Before: O’SCANNLAIN and BEA, Circuit Judges, and STEARNS,** District
Judge.

      From 2004 to 2008, Appellant Publishers Business Services, Inc. (“PBS”)

used a collection of deceptive telemarketing scripts to sell magazine subscriptions

to consumers on the pretense that it was conducting a “survey.” In 2008, Appellee

Federal Trade Commission (the “FTC”) initiated an enforcement action in district

court, alleging that PBS’s actions violated Section 5 of the FTC Act, 15 U.S.C. §

      *
          This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
          The Honorable Richard G. Stearns, United States District Judge for the
District of Massachusetts, sitting by designation.
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45(a), and requesting equitable relief under Section 13(b), 15 U.S.C. § 53(b).

      The district court granted the FTC’s motion for summary judgment on

liability, finding that PBS had violated the FTC Act, and entered a permanent

injunction barring PBS from engaging in the deceptive practices. The district court

then held an evidentiary hearing on damages and ultimately awarded equitable

monetary relief in the amount of $191,219. The FTC appealed the district court’s

calculation of damages, but PBS neither filed a cross-appeal nor challenged any

aspect of the district court’s ruling that granted the permanent injunction. We

vacated the district court’s order with respect to the equitable monetary relief

because the district court had applied an incorrect legal standard in calculating the

proper amount. See 540 F. App’x 555, 556–58 (9th Cir. 2013) (“PBS I”). We

remanded and directed the district court to base the equitable monetary relief on the

losses suffered by the consumers, rather than the gain enjoyed by the defendants.

      On remand, the district court awarded to the FTC nearly $24 million in

equitable monetary relief. PBS appealed and argued, among other things, that the

language in Section 13(b)—allowing the FTC to obtain a “permanent injunction”—

did not allow for such equitable monetary relief. We disagreed, explaining that this

argument was foreclosed by our decision in FTC v. Commerce Planet, Inc., 815 F.3d

593 (9th Cir. 2016). See FTC v. Dantuma, 748 F. App’x 735, 737–38 (9th Cir. 2018)

(“PBS II”). PBS petitioned for a writ of certiorari.

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      On April 22, 2021, the Supreme Court issued its decision in AMG Capital

Management, LLC v. FTC, 141 S. Ct. 1341 (2021), holding that Section “13(b)’s

‘permanent injunction’ language does not authorize the [FTC] directly to obtain

court-ordered monetary relief.” Id. at 1347. The Court explained, “[T]o read those

words [‘permanent injunction’] as allowing what they do not say, namely, as

allowing the [FTC] to dispense with administrative proceedings to obtain monetary

relief as well, is to read the words as going well beyond the provision’s subject

matter.” Id. at 1348. Shortly thereafter, the Court granted PBS’s petition for

certiorari, vacated our decision in PBS II, and remanded for further consideration in

light of AMG Capital, 141 S. Ct. at 1341.

      The Supreme Court’s decision in AMG Capital precludes the equitable

monetary relief awarded in this case. Despite the FTC’s argument to the contrary,

PBS did not waive this argument by failing to raise it in prior proceedings. In PBS

I, we vacated the award and remanded to the district court with instructions to

recalculate the proper amount of equitable monetary relief, but we also explained

that our decision “does not mean that the district court must accept the calculation

proposed by the FTC.” PBS I, 540 F. App’x at 558. In fact, we clarified that “[t]he

district court may consider these and other arguments in determining the appropriate

amount of damages to be awarded.” Id. Our instructions allowed for the district

court to entertain other arguments pertaining to the proper amount of equitable

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monetary relief, which included PBS’s subsequent argument that the proper amount

should be $0 because Section 13(b) does not authorize any such relief. Besides, “any

potential prejudice to [the FTC] is cured by the fact that both parties were able to

address the [Section 13(b)] issue” to both the district court and court of appeals

leading up to our decision in PBS II. Wang v. Chinese Daily News, Inc., 737 F.3d

538, 543 (9th Cir. 2013) (excusing failure to raise issue in opening brief in part

because the parties addressed the issue in supplemental briefing); see also Carrillo

v. County of Los Angeles, 798 F.3d 1210, 1223 (9th Cir. 2015) (excusing failure to

preserve below “because the issue is purely one of law, and because our addressing

it at this juncture will not prejudice the plaintiffs”).

       That being said, PBS improperly argues that the district court’s initial order

that granted summary judgment was erroneous. PBS waived any arguments related

to the district court’s ruling that granted the permanent injunction when it failed to

raise those arguments in PBS I. The only issue in PBS I was the proper amount of

equitable monetary relief, so our remand was limited to that issue alone.

       Accordingly, we AFFIRM the district court’s order that granted the

permanent injunction, VACATE the district court’s order that awarded equitable

monetary relief under Section 13(b), and REMAND for further proceedings

consistent with this decision to determine if any other relief is warranted.

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