Court Opinion

ID: 802761
Source: CourtListenerOpinion
Date Created: 2012-06-20 20:36:11+00
Date Added: 2024-06-11T12:55:43.530653
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                 JUN 20 2012

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, on                     No. 11-17677
behalf of the Federal Trade Commission,
                                                 D.C. No. 2:11-cv-00390-JAT
              Plaintiff - Appellee,

  v.                                             MEMORANDUM*

BUSINESS RECOVERY SERVICES
LLC; BRIAN HESSLER, individually and
as owner, officer, or manager of Business
Recovery Services LLC,

              Defendants - Appellants.

                   Appeal from the United States District Court
                            for the District of Arizona
                   James A. Teilborg, District Judge, Presiding

                       Argued and Submitted June 15, 2012
                            San Francisco, California

Before: D.W. NELSON, GOULD, and BEA, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Business Recovery Services is a telemarketing company, owned by Brian

Hessler (together “BRS”), that sells recovery kits and contingency services to

people who previously lost money in telemarketing scams. The United States sued

BRS for, among other things, violating 16 C.F.R. § 310.4(a)(3), which prohibits a

telemarketer from requesting payment for a good or service represented to recover

money lost in a previous telemarketing transaction until seven days after the person

has actually recovered the money. The United States sought injunctive relief. The

district court granted a preliminary injunction prohibiting BRS from selling their

recovery kits for an up-front fee in violation of § 310.4(a)(3). BRS did not stop

charging its customers an up-front fee, but had its customers sign a form stating

they were past or present business owners in an attempt to qualify for the business-

to-business exemption in 16 C.F.R. § 310.6(b)(7). The United States moved to

hold BRS in contempt for violating the injunction, and, in response, BRS moved to

modify the preliminary injunction. The district court denied BRS’s motion and

held BRS in civil contempt. BRS appeals.

      We do not have jurisdiction to review the district court’s civil contempt

order. Koninklijke Philips Elecs. N.V. v. KXD Tech., Inc., 539 F.3d 1039, 1042

(9th Cir. 2008). We may exercise jurisdiction over matters that are “inextricably

intertwined” with matters properly before us, but only where the issues “(a) [are]

                                         2
so intertwined that we must decide the pendent issue in order to review the claims

properly raised on interlocutory appeal, or (b) resolution of the issue properly

raised on interlocutory appeal necessarily resolves the pendent issue.”

Cunningham v. Gates, 229 F.3d 1271, 1285 (9th Cir. 2000) (internal citations

omitted). Because we need not decide the contempt issue to review the motion to

modify or dissolve the preliminary injunction, and because resolving the

modification order does not necessarily resolve the contempt order, we do not now

have jurisdiction over the contempt order.

      We have jurisdiction over the district court’s denial of the motion to modify

or dissolve the preliminary injunction. 28 U.S.C. § 1292(a)(1). We will reverse a

district court’s ruling on a motion to modify or dissolve a preliminary injunction

“only where the district court abused its discretion or based its decision on an

erroneous legal standard or on clearly erroneous findings of fact.” Hook v.

Arizona, 120 F.3d 921, 924 (9th Cir. 1997) (quotation marks omitted). “A party

seeking modification or dissolution of an injunction bears the burden of

establishing that a significant change in facts or law warrants revision or

dissolution of the injunction.” Sharp v. Weston, 233 F.3d 1166, 1170 (9th Cir.

2000). Where the prior scam in which telemarketers took advantage of consumers,

causing them damage, was a scam promising to help them start their own

                                          3
businesses, we doubt the business-to-business exemption to the command of

§ 310.4(A)(3) can sensibly be applied. But even if it could be applied, it would

have applied here before and after the entry of the injunction. Thus, we do not see

how the declarations effected a significant change in facts. Therefore, the district

court did not clearly err in concluding that the new declarations that BRS had its

customers sign did not show a meaningful change in facts or law. A motion to

modify or dissolve an injunction cannot be used to challenge the imposition of the

original injunction. Gon v. First State Ins. Co., 871 F.2d 863, 866 (9th Cir. 1989).

The district court did not abuse its discretion in denying the motion to modify or

dissolve the preliminary injunction.1

      AFFIRMED.

      1
         We deny BRS’s motion to take judicial notice. We may take judicial
notice of an adjudicative fact. Fed. R. Evid. 201(a). The facts for which BRS
seeks judicial notice are not adjudicative facts, having nothing to do with the facts
of this case, but are rather legislative facts—facts that “have relevance to legal
reasoning and the lawmaking process.” Fed. R. Evid. 201(a) Advisory Committee
Notes to Subdivision (a) (1972).

                                          4
                                                                                  FILED
USA v Business Recovery Services 11-17677                                            JUN 20 2012
BEA, J., concurring.                                                          MOLLY C. DWYER, CLERK
                                                                                U.S. COURT OF APPEALS

      I concur in the memorandum disposition save I think it unnecessary to

comment on whether the business-to-business exemption of 16 C.F.R. § 310.6

could apply here. The panel’s view that it is doubtful the business-to-business

exemption can be applied does not comport with my interpretation of the statute.

But, just as I think it unnecessary for the panel to intimate its view, I think it

unnecessary to explain mine.