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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13116
____________________
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
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Insurance Leads LLC, and Senior Benefits One LLC,
Defendant-Appellant.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 0:18-cv-62593-DPG
____________________
Before WILLIAM PRYOR, Chief Judge, JILL PRYOR, and GRANT,
Circuit Judges.
GRANT, Circuit Judge:
The Federal Trade Commission alleges that Steven J.
Dorfman and his six companies engaged in unfair or deceptive
business practices in violation of § 5(a) of the Federal Trade
Commission Act and the Telemarketing Sales Rule. 15 U.S.C.
§ 45(a); 16 C.F.R. Part 310. Relying on its authority under § 13(b)
of the FTC Act, the Commission obtained a preliminary injunction
that included an asset freeze and the imposition of a receiver.
Dorfman now argues that the preliminary injunction must be
dissolved because a recent Supreme Court decision undermines
the Commission’s § 13(b) authority. See AMG Cap. Mgmt., LLC
v. FTC, 141 S. Ct. 1341, 1344 (2021).
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21-13116 Opinion of the Court 3
He is right that the decision limits the Commission’s § 13(b)
authority, but wrong about what that means here. The
Commission’s updated complaint also invokes § 19 against
Dorfman, and that provision authorizes the asset freeze and
receivership. We therefore affirm the order denying Dorfman’s
emergency motion to dissolve the preliminary injunction.
I.
A.
For over four years—starting in 2013 and continuing until
the Commission began this action in October 2018—Dorfman and
the companies under his control engaged in a “bait and switch”
scheme to sell underinclusive health insurance plans to unwitting
consumers. 1 The technical term for these plans is “limited
indemnity plans and medical discount memberships.” But as the
district court put it, they are more like grocery store savers cards
than health insurance. They allow consumers to purchase medical
services at pre-negotiated discount rates, but the consumer retains
the risk of catastrophic medical bills. And if that risk becomes a
reality? The plans are “practically worthless.”
1 Because Dorfman does not challenge the district court’s findings of fact, we
draw our recitation of the facts from the facts as they existed at the preliminary
injunction stage. The parties have engaged in substantial discovery since the
preliminary injunction was entered, and at summary judgment specific facts
may be different. The facts recited here are for the purposes of this appeal
only.
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The Commission says that Dorfman led consumers to
believe they were purchasing comprehensive insurance plans that
would shift the risk of catastrophic bills to insurers and cover “a
large portion of the expense for doctor’s visits, emergency room
visits, hospital stays, laboratory services, and prescription
medicine.” Dorfman’s companies also wrongly assured consumers
that the plans they purchased would allow them to avoid the
Affordable Care Act’s tax penalty for non-compliant plans.
The alleged misrepresentations did not end there.
According to the Commission, the companies falsely represented
that they were experts on, and providers of, government-
sponsored health insurance policies. On their websites, they
claimed—again, falsely—that they were affiliated with the AARP
and the Blue Cross Blue Shield Association. The companies’ lead
generation tactics were also less than straightforward. For
example, when consumers searched Google for “Obama Care
Insurance” the top results included “obamacarequotes.org.” This
website—which was designed to give the impression that it offered
comprehensive health insurance—prompted consumers to
provide their contact information. A salesperson would then
initiate contact, following a script that Dorfman himself “wrote,
reviewed, and approved.” Like the websites, these scripts
contained misrepresentations designed to push consumers into
Dorfman’s inferior plans.
Only after payment was collected was it (sometimes)
revealed to consumers that they had purchased limited benefit
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plans. At the end of their calls, consumers were transferred to a
new salesperson to hear a series of densely worded and difficult-to-
comprehend disclosures. But before this “verification process,”
consumers were warned not to ask any questions and were told by
their initial sales representative that only some of the information
they were about to hear would apply to them—a caveat designed
to suggest that anything inconsistent with the salesperson’s earlier
representations did not apply. Verification scripts also varied
depending on whether the call was being recorded. If it was, the
sales reps were directed to give honest answers to consumers’
questions. But if it was not, they were instructed to continue to
mislead consumers into believing that they had purchased
comprehensive health insurance.
The Commission alleges that these sales were as profitable
as they were dishonest: Dorfman and his companies received over
$180 million in commissions from the plans. Their customers,
meanwhile, were stuck with surprise medical bills. In one example
cited by the district court, a consumer was led to believe that his
copays would be limited to $50 and his out-of-pocket expenses
capped at $2,000. But by the time he passed away (about four
months after purchasing his plan) he had incurred around $300,000
in uncovered medical bills. This was only one example—extensive
evidence detailed other injuries Dorfman’s scheme inflicted on
consumers.
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B.
In October 2018, the Commission filed a complaint against
Dorfman and six companies he owned and controlled.2 The
complaint alleged violations of § 5(a) of the FTC Act, which
broadly prohibits “unfair or deceptive acts or practices in or
affecting commerce.” 15 U.S.C. § 45(a). 3 It also alleged violations
of the Telemarketing Sales Rule, which prohibits sellers and
telemarketers from misrepresenting, whether directly or by
implication, any “material aspect of the performance, efficacy,
nature, or central characteristics of goods or services that are the
subject of a sales offer.” 16 C.F.R. § 310.3(a)(2)(iii). In addition, the
rule bars sellers and telemarketers from misrepresenting, whether
directly or by implication, a “seller’s or telemarketer’s affiliation
with, or endorsement or sponsorship by, any person or
government entity.” Id. § 310.3(a)(2)(vii). And it prohibits sellers
and telemarketers from making false or misleading statements to
induce a person to pay for goods or services. Id. § 310.3(a)(4).
Immediately after suing, the Commission obtained an ex
parte temporary restraining order. Among other things, the order
2 Dorfman’s companies are 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.
3 Throughout this opinion, we refer to the provisions of the FTC Act as it was
enacted. For clarity, we note that § 5(a) of the FTC Act is codified at 15 U.S.C.
§ 45(a); § 13(b) is codified at 15 U.S.C. § 53(b); and § 19 is codified at 15 U.S.C.
§ 57b.
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froze the companies’ assets and imposed a temporary receivership.
It also prohibited Dorfman and his companies from continuing to
make material misrepresentations and from disclosing or using
customer information.
Dorfman consented multiple times to an extension of the
order, but he eventually moved to strike it. The district court
denied his motion, and when he appealed to this Court we
dismissed for lack of jurisdiction. FTC v. Simple Health Plans,
LLC, No. 19-10840 (11th Cir. Apr. 16, 2019).
The district court later granted a preliminary injunction
continuing the measures imposed by the temporary restraining
order, including the asset freeze and receivership. The court found
that the Commission was likely to succeed on the merits of both
the § 5(a) claim and the Telemarketing Sales Rule claim. The
authority to issue the injunction was grounded exclusively in
§ 13(b) of the FTC Act—a provision that, at that time, was broadly
thought to authorize the Commission to seek monetary awards for
consumer redress whenever it had reason to believe that any law it
enforced was being violated. See 15 U.S.C. § 53(b).
Dorfman directly appealed the order granting the
preliminary injunction on grounds not relevant here. FTC v.
Simple Health Plans, LLC, 801 F. App’x 685, 687 (11th Cir. 2020)
(unpublished). We held that our then-binding precedent
compelled us to affirm. Id. at 688. With that appeal still pending,
Dorfman filed his first motion to dissolve the preliminary
injunction, again on grounds not relevant here. The district court
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denied that motion. On appeal, we again held that then-binding
precedent compelled us to affirm the district court. FTC v. Simple
Health Plans, LLC, 792 F. App’x 761, 762 (11th Cir. 2020)
(unpublished).
The Commission filed its first amended complaint in
November 2019, a little more than a year after its original filing.
Besides adding a new defendant, the Commission added one more
basis for relief—§ 19 of the FTC Act. The district court dismissed
parts of the amended § 5(a) claim for failure to allege sufficient facts
detailing the individual involvement of Dorfman and the other
defendant. Shortly after that dismissal, the Commission remedied
this deficiency in the now-operative Second Amended Complaint.
In 2021, three years into this litigation, the Supreme Court
narrowed the relief available under § 13(b) of the FTC Act—
monetary awards are no longer an option under that provision.
AMG Cap. Mgmt., 141 S. Ct. at 1344. Dorfman immediately filed
an emergency motion to dissolve the preliminary injunction,
arguing that because § 13(b) could no longer support claims for
monetary relief, the preliminary injunction freezing his assets and
imposing a receivership was unlawful.
The district court denied his motion, but not in reliance on
§ 13(b). It instead grounded its authority to issue the preliminary
injunction in § 19 of the FTC Act. Dorfman now appeals, and we
affirm.
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II.
We review a district court’s denial of a motion to dissolve a
preliminary injunction for abuse of discretion. Jones v. Governor
of Florida, 950 F.3d 795, 806 (11th Cir. 2020). Findings of fact are
reviewed for clear error and questions of law are reviewed de novo.
Id.
III.
A.
Section 13(b) of the FTC Act authorizes the district court to
issue a “permanent injunction.” 15 U.S.C. § 53(b). Many courts,
including this one, long interpreted that language to invoke the full
scope of the district courts’ equitable powers. See, e.g., FTC v. U.S.
Oil & Gas Corp., 748 F.2d 1431, 1432–34 (11th Cir. 1984); AMG
Cap. Mgmt., 141 S. Ct. at 1346–47. This included the power to
grant monetary awards such as restitution and disgorgement (or
so-called “equitable monetary relief”). AMG Cap. Mgmt., 141 S.
Ct. at 1346–47. Using that authority, the Commission routinely
obtained monetary awards from defendants who violated various
consumer protection and antitrust laws. See id. But in AMG
Capital, the Supreme Court changed that understanding—it held
that the text and structure of the FTC Act limit the meaning of the
term “permanent injunction” to forward-looking injunctive relief,
rather than retrospective monetary measures. Id. at 1347–48.
Injunctive relief, the Court clarified, “typically offers prospective
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relief against ongoing or future harm.” Id. at 1347 (citing United
States v. Oregon State Med. Soc., 343 U.S. 326, 333 (1952)).
We agree with Dorfman that after AMG Capital the
Commission cannot rely solely on § 13(b) to support the
preliminary injunction here because it includes measures
preserving assets for monetary relief. Now that “monetary relief is
no longer available” under § 13(b), “there is no need to preserve
resources for a future judgment.” FTC v. On Point Cap. Partners
LLC, 17 F.4th 1066, 1078 (11th Cir. 2021). The “imposition of an
asset freeze or receivership” is thus inappropriate when premised
solely on § 13(b). Id.
But the injunction here is not premised solely on § 13(b); the
Commission also points to § 19, the FTC Act’s consumer redress
provision. That provision authorizes the district court to grant
“such relief as the court finds necessary to redress injury to
consumers.” 15 U.S.C. § 57b(b). Unlike § 13(b), which applies to
violations of “any provision of law enforced by the Federal Trade
Commission,” id. § 53(b), § 19 authorizes the Commission to
commence a civil action only if the defendant violates a “rule under
this subchapter respecting unfair or deceptive acts or practices” or
if the Commission obtains a final cease-and-desist order respecting
an unfair or deceptive act or practice, id. § 57b(a)(1)–(2). 4
4 Certain additional limitations apply when the Commission is seeking relief
after obtaining a final cease and desist order. See 15 U.S.C. § 57b(a)(2). But it
is undisputed that the Commission has not obtained a cease-and-desist order.
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Section 19 thus “comes with certain important limitations
that are absent in § 13(b).” AMG Cap. Mgmt., 141 S. Ct. at 1349.
But its potential remedies are broader, or at least different. Section
13(b), as we have said, allows for prospective injunctive relief. 15
U.S.C. § 53(b). Section 19, on the other hand, allows for relief
“necessary to redress injury to consumers.” Id. § 57b(b).
This case, then, presents two questions. First, does § 19
apply to the Telemarketing Sales Rule? And second, if so, does it
authorize the preliminary measures Dorfman challenges?
On the first question, Dorfman argues that § 19 does not
cover his alleged violation of the Telemarketing Sales Rule because
that rule falls within a different subchapter than § 19. And § 19 is
explicitly limited to the violation of a “rule under this
subchapter”—that is, subchapter 1 of Title 15, Chapter 2. Id. §
57b(a)(1). In short, Dorfman says, the Telemarketing Sales Rule
was promulgated under the Telemarketing Act, which is not found
in the same subchapter as § 19.
True enough, but this analysis is incomplete. A more
thorough review shows that rules prescribed under the
Telemarketing Act—including the Telemarketing Sales Rule at
issue here—are enforceable under § 19. See FTC v. Wash. Data
Res., Inc., 704 F.3d 1323, 1326 (11th Cir. 2013). The Act states that
a violation of one of its rules “shall be treated as a violation of a rule
under section 57a of this title regarding unfair or deceptive acts or
practices.” 15 U.S.C. § 6102(c)(1). And § 57a is in subchapter 1 of
Title 15, Chapter 2. See id. § 57a.
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The statutes at large make the point even more
straightforward. 5 As enacted by Congress, the Telemarketing Act
states that “[a]ny violation of any rule” prescribed under the 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.” Telemarketing and Consumer Fraud
and Abuse Prevention Act, Pub. L. 103-297, § 3(c), 108 Stat. 1545,
1546 (1994). So—for purposes of triggering § 19—by expressly
identifying the FTC Act, Congress has unambiguously
commanded us to treat the Telemarketing Sales Rule as a rule
enforceable under § 19.
Still, the question remains whether § 19 authorizes the
specific asset freeze and receivership imposed against Dorfman and
his companies. Section 19(b) provides the district court jurisdiction
to grant “such relief as the court finds necessary to redress injury
to consumers,” which “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.” 15 U.S.C. § 57b(b). Consistent with the requirement
that the relief be necessary to redress injury to consumers, the
district court cannot impose “any exemplary or punitive damages.”
Id.
5 Although the U.S. Code is prima facie evidence of the law, the statutes at
large represent the ultimate authority on what the law is. In re Bayou Shores
SNF, LLC, 828 F.3d 1297, 1306 n.13 (11th Cir. 2016).
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The Commission seeks rescission or reformation of
contracts and the refund of money—forms of relief expressly
authorized by § 19(b). 6 Id. And though the statute does not
explicitly authorize preliminary measures of relief, like the asset
freeze and receivership sought here, it does give the district courts
broad authority to grant remedies that are “necessary to redress
injury to consumers.” Id. It also specifies that relief “shall not be
limited to” the enumerated measures. Id. That language renders
the list nonexhaustive “[b]y its own terms,” so the omission of
preliminary measures does not mean they are not authorized. Talk
Am., Inc. v. Mich. Bell Tel. Co., 564 U.S. 50, 63 n.5 (2011). Instead,
the question is whether they are “necessary to redress injury to
consumers.” 15 U.S.C. § 57b(b).
Asset freeze and receivership are forms of relief that can be,
and often are, “necessary to redress injury to consumers.” Id. Our
law has long recognized the need for the appointment of a receiver
in appropriate cases to “preserve and protect” property at issue
6 The Commission’s Second Amended Complaint seeks “rescission or
reformation of contracts, restitution, the refund of monies paid, and the
disgorgement of ill-gotten monies.” The Commission clarified in a July 5, 2022
letter—and again at oral argument—that it will not seek disgorgement to the
Treasury. So for purposes of this appeal, we accept that any requested relief
will be used for consumer redress and attendant expenses. Cf. FTC v. Figgie
Int’l, Inc., 994 F.2d 595, 607 (9th Cir. 1993). We emphasize, however, that the
exact contours of the relief ultimately granted are not before us in this appeal;
we look to the final relief sought only to the extent necessary to assess whether
the asset freeze and receivership are allowed.
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pending its final disposition. See, e.g., Gordon v. Washington, 295
U.S. 30, 37 (1935). And we have considered a “temporary freeze of
defendant’s assets” to be “reasonably necessary to assure that the
court’s jurisdiction would not be defeated by the defendant’s
disposition of assets in the event the court should ultimately order
disgorgement of the allegedly misappropriated funds.” CFTC v.
Muller, 570 F.2d 1296, 1301 (5th Cir. 1978). 7 In other words, the
point is to ensure that if the court awards final monetary relief,
assets will still be available to redress consumers’ injuries.
Otherwise, the district court would be unable to provide any
meaningful relief.
All that to say, if preliminary measures like an asset freeze or
a receivership are necessary to preserve funds for a future
monetary judgment, they are authorized by § 19(b). Here, the
district court found just that: “a preliminary injunction and asset
freeze are necessary to protect consumers, protect assets for
consumer redress, and preserve the status quo.” Dorfman does not
challenge that conclusion. We therefore affirm the portions of the
preliminary injunction imposing the asset freeze and receivership.
B.
Dorfman also seeks to vacate the parts of the injunction
prohibiting future misrepresentations and the use or disclosure of
7 This Court adopted as binding precedent all decisions of the former Fifth
Circuit handed down before October 1, 1981, in Bonner v. City of Prichard,
661 F.2d 1206, 1207 (11th Cir. 1981) (en banc).
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customer information. But Dorfman does not make an argument
that this is compelled by AMG Capital, and that argument would
misunderstand the extent of AMG Capital’s holding in any event.
As we have already explained, when the Commission enforces
§ 5(a), “[p]rospective injunctive relief is still allowed” after AMG
Capital. On Point Cap., 17 F.4th at 1079 (citing AMG Cap. Mgmt.,
141 S. Ct. at 1347–48). So injunctive relief relating to actions is still
allowed under § 13(b), while injunctive relief relating to money is
not. Accordingly, we affirm the district court’s order with respect
to the portions of the preliminary injunction enjoining future
misrepresentations and the disclosure or use of customer
information.
IV.
Dorfman raises several other issues, but they are either
outside the scope of this appeal or have been abandoned. Because
this appeal comes to us on a second successive motion to dissolve
the preliminary injunction, our review is limited to whether AMG
Capital requires dissolution or modification of the preliminary
injunction order. See Birmingham Fire Fighters Ass’n 117 v.
Jefferson Cnty., 290 F.3d 1250, 1254 (11th Cir. 2002) (an appeal
“should be permitted only to the extent necessary to consider
whether the changed circumstances, evidence, or law requires
modification of the order which is presumed to have been correct
when issued”). Dorfman’s arguments on due process and the
likelihood of success on the merits are unrelated to AMG Capital
and therefore outside the scope of this appeal; he should have
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brought them in his initial appeal of the preliminary injunction.
And his arguments about the final form of relief, including whether
the Commission will obtain punitive relief, are premature at this
stage.
Finally, Dorfman abandoned any argument that the
Commission was required to renew its motion for a preliminary
injunction after filing its Second Amended Complaint. Though he
raises this issue in the introduction of his opening brief, he does not
otherwise develop the argument in his briefs. “We have long held
that an appellant abandons a claim when he either makes only
passing references to it or raises it in a perfunctory manner without
supporting arguments and authority.” Sapuppo v. Allstate
Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014); see also Cote
v. Philip Morris USA, Inc., 985 F.3d 840, 846 (11th Cir. 2021) (a
party abandons an issue when it is raised only in the introduction
of a brief); United States v. Mathis, 767 F.3d 1264, 1275 n.2 (11th
Cir. 2014) (appellant cannot resurrect an abandoned issue by
raising it at oral argument).
* * *
Dorfman urges us to read AMG Capital as a signal to
interpret the FTC Act with a view to “reigning in the FTC’s
power.” But we take a different lesson. AMG Capital teaches us
to read the FTC Act to “mean what it says.” 141 S. Ct. at 1349. In
AMG Capital, that meant limiting § 13(b)’s provision for a
“permanent injunction” to injunctive relief. Id. Here, that means
recognizing the broad scope of relief available under § 19. When
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the Commission enforces a rule, § 19 grants the district court
jurisdiction to offer relief “necessary to redress injury to
consumers.” 15 U.S.C. § 57b(a)–(b). To preserve funds for
consumers, the Commission sought to freeze Dorfman’s assets and
impose a receivership over his companies. Because § 19 allows
such relief here, we AFFIRM.