Case: 19-11932 Date Filed: 02/05/2020 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 19-11932 Non-Argument Calendar ________________________
D.C. Docket No. 0:18-cv-62593-DPG
FEDERAL TRADE COMMISSION,
Plaintiff - Appellee,
versus
SIMPLE HEALTH PLANS, LLC, a Florida Limited Liability Company, et al.,
Defendants,
STEVEN J. DORFMAN, Individually and as an officer, member or manager of Simple Health Plans LLC, Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC and Senior Benefits One LLC,
Defendant - Appellant. Case: 19-11932 Date Filed: 02/05/2020 Page: 2 of 7
________________________
Appeal from the United States District Court for the Southern District of Florida ________________________
(February 5, 2020)
Before ROSENBAUM, EDMONDSON, and MARCUS, Circuit Judges.
PER CURIAM:
Steven Dorfman appeals the district court’s order granting -- pursuant to
section 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 53(b) -- the
Federal Trade Commission’s (“FTC”) motion for a preliminary injunction and for
ancillary relief, including an asset freeze and appointment of a receiver. No
reversible error is shown; we affirm.
In October 2018, the FTC filed a complaint against Dorfman and against six
companies, each of which was under Dorfman’s control (collectively,
“Defendants”). The FTC alleged that Defendants engaged in unfair and deceptive
trade practices in violation of section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and
engaged in deceptive telemarketing practices in violation of the FTC’s
Telemarking Sales Rule, 16 C.F.R. § 310.3. The FTC sought injunctive relief as
well as disgorgement, restitution, rescission, and reformation. 2 Case: 19-11932 Date Filed: 02/05/2020 Page: 3 of 7
Together with its complaint, the FTC also moved for a temporary restraining
order (“TRO”), an asset freeze, a temporary receivership over the six companies
named as defendants, and an order to show cause why a preliminary injunction
should not issue. On 31 October 2018, the district court entered the TRO and
granted the asset freeze and the receivership.
In May 2019 -- following an evidentiary hearing -- the district court issued a
46-page order granting a preliminary injunction. Briefly stated, the district court
determined that Defendants -- online and through telemarketing calls -- had
engaged in a “classic bait and switch scheme” whereby Defendants misled
consumers into believing Defendants were selling comprehensive health insurance
coverage when, in reality, Defendants were selling only limited indemnity plans or
medical discount memberships. Between 2014 and 2018, the scheme generated
$180 million in revenue.
The district court concluded that preliminary injunctive relief was
appropriate because the FTC had demonstrated (1) that the FTC was likely to
succeed on the merits of its claims against Defendants, including against Dorfman
individually and (2) that injunctive relief was in the public interest. The district
court ordered the continued freeze on Defendants’ assets to preserve the
availability of funds for consumer redress. The district court also ordered the
3 Case: 19-11932 Date Filed: 02/05/2020 Page: 4 of 7
permanent appointment of a receiver for the six corporate Defendants “to preserve
assets and maintain the status quo.”
We review the grant of a preliminary injunction for abuse of discretion.
FTC v. IAB Mktg. Assocs. LP, 746 F.3d 1228, 1232 (11th Cir. 2014). We review
an asset freeze under the same abuse-of-discretion standard. Id. We review de
novo the district court’s legal conclusions. Id.
As an initial matter, Dorfman raises no challenge to the district court’s
factual findings or to the district court’s determination that the FTC satisfied its
burden of showing that a preliminary injunction was warranted in this case.
Dorfman contends, instead, that the district court exceeded its authority under
section 13(b) of the FTC Act by issuing the TRO and by granting preliminary
injunctive relief and preliminary ancillary relief -- including the asset freeze and
the appointment of a receiver -- designed to preserve assets in the event the FTC
prevails on its claims for monetary relief.
Section 13(b) of the FTC Act provides that a court may grant a TRO or a
preliminary injunction against defendants in an action brought by the FTC “[u]pon
a proper showing that, weighing the equities and considering the Commission’s
likelihood of ultimate success, such action would be in the public interest . . . .” 15
U.S.C. § 53(b). Courts may also issue a permanent injunction in appropriate cases.
Id.
4 Case: 19-11932 Date Filed: 02/05/2020 Page: 5 of 7
Dorfman contends that the FTC lacks authority to seek disgorgement or
restitution: monetary remedies that Dorfman says constitute “legal remedies” and
“punitive measures” unavailable under section 13(b). Dorfman’s argument is
foreclosed by this Court’s binding precedent. We have said expressly that “the
unqualified grant of statutory authority to issue an injunction under section 13(b)
carries with it the full range of equitable remedies, including the power to grant
consumer redress and compel disgorgement of profits.” FTC v. Gem Merch.
Corp., 87 F.3d 466, 468 (11th Cir. 1996). A district court is also authorized under
section 13(b) to “order preliminary relief, including an asset freeze, that may be
needed to make permanent relief possible.” Id. at 469; IAB Mktg. Assocs. LP, 746
F.3d at 1234-35; FTC v. U.S. Oil & Gas Corp., 748 F.2d 1431, 1433-34 (11th Cir.
1984).
Dorfman acknowledges that his argument is contrary to this Court’s section
13(b) precedent, but argues that our precedent has been “substantially undermined”
by the Supreme Court’s decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017), and by
this Court’s decision in SEC v. Graham, 823 F.3d 1357 (11th Cir. 2016). Kokesh
and Graham, however, each involved a question about the applicability of a statute
of limitations to disgorgement claims in an enforcement action brought by the U.S.
Securities and Exchange Commission (“SEC”). That Kokesh and Graham make
5 Case: 19-11932 Date Filed: 02/05/2020 Page: 6 of 7
no express rulings about the FTC Act or about the remedies authorized under
section 13(b) is undisputed.
Following a precedent and extending a precedent are entirely different
things. Although Kokesh and Graham involved a different statutory scheme and a
different agency, Dorfman contends we should overrule our section 13(b)
precedent based upon the “reasoning” in Kokesh and in Graham. Our prior panel
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Case: 19-11932 Date Filed: 02/05/2020 Page: 1 of 7
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT ________________________
No. 19-11932 Non-Argument Calendar ________________________
D.C. Docket No. 0:18-cv-62593-DPG
FEDERAL TRADE COMMISSION,
Plaintiff - Appellee,
versus
SIMPLE HEALTH PLANS, LLC, a Florida Limited Liability Company, et al.,
Defendants,
STEVEN J. DORFMAN, Individually and as an officer, member or manager of Simple Health Plans LLC, Health Benefits One LLC, Health Center Management LLC, Innovative Customer Care LLC, Simple Insurance Leads LLC and Senior Benefits One LLC,
Defendant - Appellant. Case: 19-11932 Date Filed: 02/05/2020 Page: 2 of 7
________________________
Appeal from the United States District Court for the Southern District of Florida ________________________
(February 5, 2020)
Before ROSENBAUM, EDMONDSON, and MARCUS, Circuit Judges.
PER CURIAM:
Steven Dorfman appeals the district court’s order granting -- pursuant to
section 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 53(b) -- the
Federal Trade Commission’s (“FTC”) motion for a preliminary injunction and for
ancillary relief, including an asset freeze and appointment of a receiver. No
reversible error is shown; we affirm.
In October 2018, the FTC filed a complaint against Dorfman and against six
companies, each of which was under Dorfman’s control (collectively,
“Defendants”). The FTC alleged that Defendants engaged in unfair and deceptive
trade practices in violation of section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and
engaged in deceptive telemarketing practices in violation of the FTC’s
Telemarking Sales Rule, 16 C.F.R. § 310.3. The FTC sought injunctive relief as
well as disgorgement, restitution, rescission, and reformation. 2 Case: 19-11932 Date Filed: 02/05/2020 Page: 3 of 7
Together with its complaint, the FTC also moved for a temporary restraining
order (“TRO”), an asset freeze, a temporary receivership over the six companies
named as defendants, and an order to show cause why a preliminary injunction
should not issue. On 31 October 2018, the district court entered the TRO and
granted the asset freeze and the receivership.
In May 2019 -- following an evidentiary hearing -- the district court issued a
46-page order granting a preliminary injunction. Briefly stated, the district court
determined that Defendants -- online and through telemarketing calls -- had
engaged in a “classic bait and switch scheme” whereby Defendants misled
consumers into believing Defendants were selling comprehensive health insurance
coverage when, in reality, Defendants were selling only limited indemnity plans or
medical discount memberships. Between 2014 and 2018, the scheme generated
$180 million in revenue.
The district court concluded that preliminary injunctive relief was
appropriate because the FTC had demonstrated (1) that the FTC was likely to
succeed on the merits of its claims against Defendants, including against Dorfman
individually and (2) that injunctive relief was in the public interest. The district
court ordered the continued freeze on Defendants’ assets to preserve the
availability of funds for consumer redress. The district court also ordered the
3 Case: 19-11932 Date Filed: 02/05/2020 Page: 4 of 7
permanent appointment of a receiver for the six corporate Defendants “to preserve
assets and maintain the status quo.”
We review the grant of a preliminary injunction for abuse of discretion.
FTC v. IAB Mktg. Assocs. LP, 746 F.3d 1228, 1232 (11th Cir. 2014). We review
an asset freeze under the same abuse-of-discretion standard. Id. We review de
novo the district court’s legal conclusions. Id.
As an initial matter, Dorfman raises no challenge to the district court’s
factual findings or to the district court’s determination that the FTC satisfied its
burden of showing that a preliminary injunction was warranted in this case.
Dorfman contends, instead, that the district court exceeded its authority under
section 13(b) of the FTC Act by issuing the TRO and by granting preliminary
injunctive relief and preliminary ancillary relief -- including the asset freeze and
the appointment of a receiver -- designed to preserve assets in the event the FTC
prevails on its claims for monetary relief.
Section 13(b) of the FTC Act provides that a court may grant a TRO or a
preliminary injunction against defendants in an action brought by the FTC “[u]pon
a proper showing that, weighing the equities and considering the Commission’s
likelihood of ultimate success, such action would be in the public interest . . . .” 15
U.S.C. § 53(b). Courts may also issue a permanent injunction in appropriate cases.
Id.
4 Case: 19-11932 Date Filed: 02/05/2020 Page: 5 of 7
Dorfman contends that the FTC lacks authority to seek disgorgement or
restitution: monetary remedies that Dorfman says constitute “legal remedies” and
“punitive measures” unavailable under section 13(b). Dorfman’s argument is
foreclosed by this Court’s binding precedent. We have said expressly that “the
unqualified grant of statutory authority to issue an injunction under section 13(b)
carries with it the full range of equitable remedies, including the power to grant
consumer redress and compel disgorgement of profits.” FTC v. Gem Merch.
Corp., 87 F.3d 466, 468 (11th Cir. 1996). A district court is also authorized under
section 13(b) to “order preliminary relief, including an asset freeze, that may be
needed to make permanent relief possible.” Id. at 469; IAB Mktg. Assocs. LP, 746
F.3d at 1234-35; FTC v. U.S. Oil & Gas Corp., 748 F.2d 1431, 1433-34 (11th Cir.
1984).
Dorfman acknowledges that his argument is contrary to this Court’s section
13(b) precedent, but argues that our precedent has been “substantially undermined”
by the Supreme Court’s decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017), and by
this Court’s decision in SEC v. Graham, 823 F.3d 1357 (11th Cir. 2016). Kokesh
and Graham, however, each involved a question about the applicability of a statute
of limitations to disgorgement claims in an enforcement action brought by the U.S.
Securities and Exchange Commission (“SEC”). That Kokesh and Graham make
5 Case: 19-11932 Date Filed: 02/05/2020 Page: 6 of 7
no express rulings about the FTC Act or about the remedies authorized under
section 13(b) is undisputed.
Following a precedent and extending a precedent are entirely different
things. Although Kokesh and Graham involved a different statutory scheme and a
different agency, Dorfman contends we should overrule our section 13(b)
precedent based upon the “reasoning” in Kokesh and in Graham. Our prior panel
precedent rule makes clear that subsequent panels are bound to follow a prior
panel’s decision on an issue unless and until the first panel’s holding “is overruled
or undermined to the point of abrogation by the Supreme Court or by this court
sitting en banc.” EEOC v. Exel, Inc., 884 F.3d 1326, 1332 (11th Cir. 2018).
“[T]hat the reasoning of an intervening high court decision is at odds with that of
our prior decision is no basis for a panel to depart from our prior decision”: the
intervening Supreme Court decision must be “clearly on point.” Atl. Sounding Co.
v. Townsend, 496 F.3d 1282, 1284 (11th Cir. 2007). “[O]bedience to a Supreme
Court decision is one thing, extrapolating from its implications a holding on an
issue that was not before that Court in order to upend settled circuit law is another
thing.” Id.
Under our prior panel precedent rule, we remain bound by our decisions in
U.S. Oil & Gas Corp., Gem Merch. Corp., and in IAB Mktg. Assocs. LP. These
cases are dispositive of this appeal. The district court abused no discretion in
6 Case: 19-11932 Date Filed: 02/05/2020 Page: 7 of 7
granting the FTC’s motion for a preliminary injunction, an asset freeze, and
receivership.
Dorfman also contends he was denied his Seventh Amendment right to a
jury trial. Because this appeal involves only the granting of preliminary relief --
and no final determination on the merits -- we reject this argument as premature.
AFFIRMED.