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Consumer Fin. Prot. Bureau v. Gordon

United States Court of Appeals for the Ninth Circuit

October 20, 2015, Argued and Submitted, Pasadena, California; April 14, 2016, Filed

No. 13-56484

Opinion

 [*1184]  OWENS, Circuit Judge:

Appellant Chance Gordon appeals from the district court's order of summary judgment in favor of the Consumer Financial Protection Bureau (CFPB) on its enforcement action for violations of the Consumer Financial Protection Act and Regulation O. We affirm in part, and vacate and remand in part, for reconsideration [**4]  of the monetary judgment in accordance with this opinion.

I. BACKGROUND

A. Gordon's Loan Modification Program

Gordon, a licensed California attorney, was the sole owner and officer of the Gordon Law Firm (collectively Gordon), and  [*1185]  provided home loan modification services. Due to changes in the law that prohibited charging up-front for these services, Gordon created the "Pre-Litigation Monetary Claims Program" (Program). In the Program, Gordon, for a flat fee, would prepare certain legal "products" advertised to help purchasers in their disputes with the lenders that owned their mortgages.

Gordon also created an attorney-client "pro bono" legal agreement, where he promised to provide certain legal services free of charge, including negotiating with the lenders to modify mortgages. Clients could receive these "pro bono" services only if they paid for the Program. Previously, Gordon charged clients for these same legal services.

To attract clients, Gordon hired Abraham Pessar to perform marketing and advertising services.3 Pessar sent direct mail marketing pieces to financially distressed homeowners. In early 2010, Pessar and his team began sending out a mailer titled "Notice of HUD Rights," [**5]  which bore a Washington, D.C. return address to which neither Gordon nor Pessar had any personal or business connection. The mailer stated that it was provided "[c]ourtesy of the Qualification Intake Department," and that the recipient could have the right to participate in a repayment program that could prevent future foreclosure proceedings.

In June 2011, Pessar and his team created a new mailer labeled "Program: Making Homes Affordable," which closely resembled the federal government's "Making Home Affordable Program" (though the mailer disclaimed any affiliation with the government). Pessar's team also used websites and telephone calls to solicit consumers. Pessar claimed that Gordon reviewed and approved all marketing [**6]  materials, while Gordon disputed his involvement and control over the mailers, websites, and telephone calls.

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819 F.3d 1179 *; 2016 U.S. App. LEXIS 6770 **

CONSUMER FINANCIAL PROTECTION BUREAU, Plaintiff-Appellee, v. CHANCE EDWARD GORDON, DBA Gordon and Associates, DBA National Legal Source, DBA Resource Law Center, DBA Resource Law Group, DBA Resource Legal Group, DBA The C E G Law Firm, DBA The Law Offices of C. Edward Gordon, DBA The Law Offices of Chance E Gordon, Defendant-Appellant.

Subsequent History: US Supreme Court certiorari denied by Gordon v. Consumer Fin. Prot. Bureau, 2017 U.S. LEXIS 4127 (U.S., June 26, 2017)

Prior History:  [**1] Appeal from the United States District Court for the Central District of California. D.C. No. 2:12-cv-06147-RSWL-MRW. Percy Anderson, District Judge, Presiding.

Noel Canning, 2011 NLRB LEXIS 551 (N.L.R.B., Sept. 26, 2011)

CORE TERMS

district court, appointed, consumers, Regulation, civil enforcement, deceptive, ratification, mortgage, executive authority, enforcement action, federal court, confirmed, argues, restitution, injunction, ratified, modification, intervenors, provisions, violations, mailer, powers, financial protection, marketing materials, bring an action, advertising, parties, counts, recess, executive power

Constitutional Law, The Presidency, Appointment of Officials, Civil Procedure, Appeals, Standards of Review, De Novo Review, Questions of Fact & Law, Summary Judgment Review, Standards of Review, Abuse of Discretion, Reviewability of Lower Court Decisions, Preservation for Review, Remedies, Damages, Monetary Damages, Injunctions, Case or Controversy, Standing, Elements, Particular Parties, The Presidency, Separation of Powers, Third Party Standing, Antitrust & Trade Law, Private Actions, Requirements, Jurisdiction, Subject Matter Jurisdiction, Jurisdiction Over Actions, Business & Corporate Law, Agency Relationships, Ratification, Scope, Consumer Protection, Deceptive & Unfair Trade Practices, Governments, Legislation, Interpretation, Deceptive & Unfair Trade Practices, Federal Trade Commission Act, Management Duties & Liabilities, Causes of Action, Fraud & Misrepresentation, False Advertising, Real Property Law, Financing, Federal Regulations, Regulated Practices, Remedies, Preliminary Considerations, Equity, Relief, Evidence, Burdens of Proof, Burden Shifting, Contracts Law, Equitable Relief, Quantum Meruit, Effect & Operation, Retrospective Operation, Inferences & Presumptions, Presumptions, Effects, Administrative Law, Separation of Powers, Legislative Controls, Scope of Delegated Authority