Consumer Financial Protection v. Chance Gordon

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CONSUMER FINANCIAL PROTECTION No. 13-56484

BUREAU,

Plaintiff-Appellee, D.C. No.

2:12-cv-06147-

v. RSWL-MRW

CHANCE EDWARD GORDON, DBA

Gordon and Associates, DBA OPINION

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.

Appeal from the United States District Court

for the Central District of California

Percy Anderson, District Judge, Presiding

Argued and Submitted

October 20, 2015—Pasadena, California

Filed April 14, 2016

2 CONSUMER FIN. PROT. BUREAU V. GORDON

Before: Sandra S. Ikuta and John B. Owens, Circuit Judges,

and William K. Sessions,* District Judge.

Opinion by Judge Owens;

Dissent by Judge Ikuta

SUMMARY**

Standing / Appointments / Consumer Financial

Protection Bureau

The panel affirmed in part, and vacated in part, the district

court’s summary judgment in favor of the Consumer

Financial Protection Bureau in its civil enforcement action for

violations of the Consumer Financial Protection Act

(“CFPA”) and Regulation O against Chance Gordon.

On January 4, 2012, President Obama, relying on his

recess-appointment power, named Richard Cordray as the

Bureau’s initial Director; and he renominated Cordray as

Director on January 24, 2013, and the Senate confirmed him

on July 16, 2013. The Bureau filed this action against

Gordon in July 2012.

The panel held that Cordray’s improper recess

reappointment, pursuant to NLRB v. Noel Canning, 134 S. Ct.

*

The Honorable William K. Sessions III, District Judge for the U.S.

District Court for the District of Vermont, sitting by designation.

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

CONSUMER FIN. PROT. BUREAU V. GORDON 3

2550, 2556–57 (2014), did not divest this court of jurisdiction

because the Bureau, as an agency of the Executive Branch,

had an interest or power in having federal law enforced, and

there was Article III standing. The panel also held that the

initial invalid recess appointment of Cordray was not fatal to

the case, because the subsequent valid appointment, coupled

with Cordray’s Senate confirmation, cured any Article II

Appointments Clause deficiencies.

The panel held that Gordon failed to demonstrate that

there was any dispute of material fact as to his liability under

the CFPA or Regulation O, and therefore, the district court

properly granted summary judgment in favor of the Bureau.

The panel also held that because the district court

conscientiously tailored the injunction at issue, it did not

abuse its discretion in granting equitable judgment to the

Bureau. The panel further held, however, that because the

district court may have impermissibly entered a monetary

judgment against Gordon for a time period prior to the

enactment or effective date of the relative provisions of the

CFPA and Regulation O, the case was remanded for further

consideration of the monetary judgment.

Judge Ikuta dissented. She would hold that the Bureau

lacked executive power to bring the civil enforcement action

because Richard Cordray was not properly appointed at the

time the action was filed, and therefore there was no Article

III standing, and the district court was bound to dismiss the

action.

4 CONSUMER FIN. PROT. BUREAU V. GORDON

COUNSEL

Gary Kurtz, Law Office of Gary Kurtz, PLC, Woodland Hills,

California, for Defendant-Appellant.

Meredith Fuchs, General Counsel; To-Quyen Truong, Deputy

General Counsel; John R. Coleman, Assistant General

Counsel; Nandan M. Joshi and Kristin Bateman (argued),

Attorneys, Consumer Financial Protection Bureau,

Washington, D.C., for Plaintiff-Appellee.

Charles J. Cooper (argued), David H. Thompson, Howard C.

Nielson, Jr., and John D. Ohlendorf, Cooper & Kirk, PLLC,

Washington, D.C., for Amicus Curiae Judicial Education

Project.

CONSUMER FIN. PROT. BUREAU V. GORDON 5

OPINION

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 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 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.

6 CONSUMER FIN. PROT. BUREAU V. GORDON

To attract clients, Gordon hired Abraham Pessar to

perform marketing and advertising services.1 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,” 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

materials, while Gordon disputed his involvement and control

over the mailers, websites, and telephone calls.

1

The enforcement action at issue here was filed against Chance Gordon,

the “Gordon Entities,” Abraham Pessar, and the “Pessar Entities.” The

entities included various businesses and corporations owned and operated

by Gordon and Pessar. For simplicity, we will refer herein to Gordon and

his entities collectively as “Gordon” and Pessar and his entities as

“Pessar.” Pessar and his entities are no longer defendants in the suit, as

they settled with the government in January 2013.

CONSUMER FIN. PROT. BUREAU V. GORDON 7

B. The Appointment (and Eventual Confirmation) of

Richard Cordray as Director of the CFPB, and His

Ratification of Past Acts

On January 4, 2012, President Obama, relying on his

recess-appointment power, named Richard Cordray as the

CFPB’s initial Director. See U.S. Const. art. II, § 2, cl. 3.2

That same day, he appointed three individuals to the National

Labor Relations Board (NLRB) in similar fashion. See NLRB

v. Noel Canning, 134 S. Ct. 2550, 2556–57 (2014). In Noel

Canning, the Supreme Court held that the NLRB

appointments did not satisfy Article II’s Appointment Clause

requirements, as they did not occur when the Senate was out

of session. Id. at 2574–77.

President Obama renominated Cordray as Director on

January 24, 2013. See White House Office of the Press

Secretary, Remarks by the President at a Personnel

Announcement (Jan. 24, 2013), https://www.whitehouse.gov/

the-press-office/2013/01/24/remarks-president-personnel-

announcement. On July 16, 2013, the Senate confirmed

Cordray as Director. 159 Cong. Rec. D704 (daily ed. July 16,

2013). On August 30, 2013, the CFPB issued the following

Notice of Ratification, signed by Cordray:

The President appointed me as Director of the

Bureau of Consumer Financial Protection on

January 4, 2012, pursuant to his authority

under the Recess Appointments Clause, U.S.

2

The relevant clause provides: “The President shall have Power to fill

up all Vacancies that may happen during the Recess of the Senate, by

granting Commissions which shall expire at the End of their next

Session.”

8 CONSUMER FIN. PROT. BUREAU V. GORDON

Const. art. II, § 2, cl. 3. The President

subsequently appointed me as Director on

July 17, 2013, following confirmation by the

Senate, pursuant to the Appointments Clause,

U.S. Const. art. II, § 2, cl. 2. I believe that the

actions I took during the period I was serving

as a recess appointee were legally authorized

and entirely proper. To avoid any possible

uncertainty, however, I hereby affirm and

ratify any and all actions I took during that

period.

Notice of Ratification, 78 Fed. Reg. 53734-02 (Aug. 30,

2013). The parties agree that while Cordray’s initial January

2012 recess appointment was invalid, his July 2013

confirmation was valid. They disagree as to the significance

of these events and the August 2013 ratification.

C. The CFPB Litigation Against Gordon

In July 2012, the CFPB filed a civil enforcement action

against Gordon, alleging that he violated two sections of the

Consumer Financial Protection Act (CFPA) (12 U.S.C.

§§ 5531, 5536) through unfair and deceptive practices—

namely, suggesting that consumers would likely receive

mortgage relief and that his operation was affiliated with the

government. It also alleged that Gordon violated Regulation

O (12 C.F.R. §§ 1015.1–11) by (i) receiving up-front

payments for mortgage relief services before consumers

entered into loan modification agreements with their lenders,

(ii) failing to make the proper disclosures while

communicating with consumers, (iii) advising consumers not

to communicate with their lenders, and (iv) misrepresenting

material aspects of his services. As relief, the CFPB sought

CONSUMER FIN. PROT. BUREAU V. GORDON 9

a permanent injunction to prevent future violations,

restitution, and disgorgement of compensation. The CFPB

also filed an ex parte application for a temporary restraining

order that would (a) prohibit Gordon from operating his

business, (b) appoint a receiver, and (c) freeze his assets. The

district court issued the TRO and later a preliminary

injunction.

After receiving cross-motions for summary judgment, the

district court in June 2013 ruled in the CFPB’s favor. It

concluded that Gordon violated the CFPA in numerous ways,

including by representing that the Program would benefit his

clients (it actually left them in a far worse position), and that

his business was somehow affiliated with the government (it

was not). It held that Gordon violated Regulation O for the

reasons that the CFPB alleged. It also ordered

$11,403,338.63 in disgorgement and restitution against

Gordon and the Gordon entities, jointly and severally. This

represents the amount that Gordon and Pessar collected from

consumers from January 2010 through July 2012.

The district court chose not to address the merits of

Gordon’s argument that the CFPB lacked authority to bring

the action because its director, Cordray, was

unconstitutionally appointed per Noel Canning. The district

court concluded that Gordon had waived it by failing to

articulate how Cordray’s invalid appointment would prevent

the CFPB from prosecuting civil enforcement actions.

Gordon then appealed, and amicus Judicial Education Project

(JEP) filed a brief that more extensively discussed the

possible Article II and III consequences of Cordray’s failed

recess appointment.

10 CONSUMER FIN. PROT. BUREAU V. GORDON

II. STANDARD OF REVIEW

This court reviews questions of constitutional law de

novo. Bojnoordi v. Holder, 757 F.3d 1075, 1077 (9th Cir.

2014). We review a district court’s grant of summary

judgment de novo and may affirm on any ground supported

by the record. Dietrich v. John Ascuaga’s Nugget, 548 F.3d

892, 896 (9th Cir. 2008). A district court’s determination that

a party waived an issue is reviewed for an abuse of discretion.

L.A. News Serv. v. Reuters Television Int’l, Ltd., 149 F.3d

987, 996 (9th Cir. 1998). We review for an abuse of

discretion a district court’s grant of equitable monetary and

injunctive relief. FTC v. Grant Connect, LLC, 763 F.3d

1094, 1101 (9th Cir. 2014).

III. ANALYSIS

A. Article III Standing

We begin by addressing whether we have jurisdiction to

hear this case. Although Gordon did not argue Article III

standing to the district court, we have the obligation to ensure

that it exists. See WildEarth Guardians v. EPA, 759 F.3d

1064, 1070 (9th Cir. 2014) (citing Summers v. Earth Island

Inst., 555 U.S. 488, 499 (2009)).

“[T]he Constitution’s central mechanism of separation of

powers depends largely upon common understanding of what

activities are appropriate to legislatures, to executives, and to

courts.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 559–60

(1992). “No principle is more fundamental to the judiciary’s

proper role in our system of government than the

constitutional limitation of federal-court jurisdiction to actual

cases or controversies.” Raines v. Byrd, 521 U.S. 811, 818

CONSUMER FIN. PROT. BUREAU V. GORDON 11

(1997) (quoting Simon v. E. Ky. Welfare Rights Org.,

426 U.S. 26, 37 (1976)). Consistent with this checks and

balances principle, a private party can bring a “case” only if

it has standing—“a concrete and particularized injury that is

fairly traceable to the challenged conduct, and is likely to be

redressed by a favorable judicial decision.” Hollingsworth v.

Perry, 133 S. Ct. 2652, 2661 (2013) (citing Lujan, 504 U.S.

at 560–61). A generalized grievance is not enough; a plaintiff

must have more than merely an interest in seeing the law

obeyed. FEC v. Akins, 524 U.S. 11, 23–24 (1998); see also

Lujan, 504 U.S. at 572–78.

As part of our separation of powers foundation, the

Executive Branch is charged under our Constitution with the

enforcement of federal law. “Vindicating the public interest

(including the public interest in Government observance of

the Constitution and laws) is the function of Congress and the

Chief Executive.” Lujan, 504 U.S. at 576 (emphasis in

original); see also U.S. Const. art. II, § 3 (providing that the

President has the duty to “take Care that the Laws be

faithfully executed”). Thus, all parties (and JEP) agree that

the Executive Branch and its duly appointed officers are

excepted from the generalized grievance prohibition that

private parties face under Article III.

CFPB brought the suit in question to vindicate, as

codified by Congress, the public interest in making Gordon’s

victims whole and preventing him from further fleecing

vulnerable homeowners. Under Lujan, it is the Executive

Branch, not any particular individual, that has Article III

standing. 504 U.S. at 576; see also United States v.

Providence Journal Co., 485 U.S. 693, 700 (1988).

12 CONSUMER FIN. PROT. BUREAU V. GORDON

JEP argues that Cordray’s improper recess appointment

divests our court of jurisdiction. According to JEP, the lack

of a valid director from the outset means that the CFPB never

existed for Article III purposes until July 2013, when the

Senate confirmed Cordray, because the CFPB purportedly

could only operate with a properly confirmed director in

place. Not only did Cordray lack authority to initiate any

civil enforcement actions, the argument goes, but so did any

inferior officers that Cordray appointed—essentially an

Article II version of the fruit of the poisonous tree doctrine.

To make this unpredecented argument, JEP points to

Hollingsworth for support.

In Hollingsworth, same-sex couples sued California

officials, alleging that Proposition 8, which banned same-sex

marriage, violated their constitutional rights. 133 S. Ct. at

2659–60. The state officials refused to defend the law in

court (though they continued to enforce it), and the district

court permitted the original proponents of Proposition 8 to

intervene and defend it. Id. at 2660. After a bench trial, the

district court ruled in the plaintiffs’ favor, struck down

Proposition 8, and enjoined California officials from

enforcing the law. Id.

The California officials declined to appeal the case, but

the intervenors did. Id. Our court wondered whether the

intervenors had Article III standing, and asked the California

Supreme Court via certified question if the intervenors

possessed either a particularized interest in Proposition 8’s

validity or the authority to assert the State’s interest to defend

it. Id. The California Supreme Court replied that the

intervenors could assert the State’s interest to defend the

measure, but did not address whether the intervenors had their

own particularized interest in its validity. Id. Concluding

CONSUMER FIN. PROT. BUREAU V. GORDON 13

that the intervenors had the requisite standing, our court then

reached the merits and struck down Proposition 8. Id. at

2660–61.

In a 5–4 decision, the Supreme Court dismissed the case

for lack of Article III standing. Id. at 2668. Citing Lujan, the

Court explained that the intervenors had no direct stake in the

litigation, but merely a “generalized grievance.” Id. at 2662.

Although they were proponents of the measure prior to its

enactment, they had “no role—special or otherwise—in the

enforcement of Proposition 8” post-enactment. Id. at

2662–63. This was true even though they wished to assert

California’s interest in the litigation, as “[i]n the ordinary

course, a litigant must assert his or her own legal rights and

interests, and cannot rest a claim to relief on the legal rights

or interests of third parties.” Id. at 2663 (quoting Powers v.

Ohio, 499 U.S. 400, 410 (1991)) (alteration in original). JEP

argues that because Cordray was improperly appointed, he

was a “private citizen” similar to the intervenors in

Hollingsworth, and therefore lacked Article III standing to

bring the CFPB’s suit against Gordon.

A straightforward reading of Hollingsworth confirms that

it has no impact on this case (and not even the dissent reads

it as JEP and Gordon do). Here, Congress authorized the

CFPB to bring actions in federal court to enforce certain

consumer protection statutes and regulations. See 12 U.S.C.

§ 5564(a)–(b) (authorizing the CFPB to “commence a civil

action against” violators of federal consumer financial

protection laws and “act in its own name and through its own

attorneys in enforcing” the laws under its jurisdiction). And

with this authorization, the Executive Branch, through the

CFPB, need not suffer a “particularized injury”—it is charged

under Article II to enforce federal law. See Lujan, 504 U.S.

14 CONSUMER FIN. PROT. BUREAU V. GORDON

at 576–77. That its director was improperly appointed does

not alter the Executive Branch’s interest or power in having

federal law enforced (and neither JEP nor Gordon point to

any statute or regulation suggesting otherwise). While the

failure to have a properly confirmed director may raise

Article II Appointments Clause issues, it does not implicate

our Article III jurisdiction to hear this case. See Providence

Journal, 485 U.S. at 700 (explaining that, even though the

special prosecutor who filed for a writ of certiorari was not

properly authorized to act on behalf of the United States

government, the case still “clearly is one in which the United

States is interested” (internal quotation marks omitted)).

If the CFPB, as an agency, had lost before the district

court and decided not to appeal, and a concerned citizen

wanted to intervene and bring the appeal, then Hollingsworth

would have relevance. That citizen, like the Proposition 8

intervenors, would be asserting nothing more than a

passionate but generalized grievance. But the CFPB, as part

of the Executive Branch, has never abandoned this lawsuit.

And because the Executive Branch need not demonstrate a

particularized injury, there is no Hollingsworth problem. See,

e.g., De Saracho v. Custom Food Mach., Inc., 206 F.3d 874,

878 n.4 (9th Cir. 2000) (noting that a lawsuit allegedly filed

without authorization does not result in the district court

“lack[ing] subject matter jurisdiction in the sense that it

would if plaintiffs lacked standing to sue under the ‘case or

controversy’ requirement of Article III of the Constitution”).

Providence Journal offers further support. The Court

dismissed that case because the special prosecutor lacked

authority to file the petition for certiorari. 485 U.S. at

699–700. The Court never cast that lack of authority as an

Article III standing problem—“in fact,” Providence Journal

CONSUMER FIN. PROT. BUREAU V. GORDON 15

“[does] not discuss standing at all.” Hollingsworth, 133 S.

Ct. at 2655. Instead, the Court explained that the “action was

initiated in vindication of the ‘judicial power of the United

States,’ U.S. Const., Art. III, § 1 (emphasis added), and it is

that interest, unique to the sovereign, that continues now to be

litigated in this Court.” Providence Journal, 485 U.S. at 700.

The Court thereby confirmed that any issue with an

individual’s authorization to continue prosecuting the case

did not strip the United States of its Article III interest in

bringing the action. The dissent Bass-O-Matics the CFPB’s

authority to execute the laws (Article II) with the United

States’ interest in the case (Article III). The initially flawed

appointment of Cordray is an Article II question, and every

court confronted with this issue has analyzed it as such. See,

e.g., Freytag v. Commissioner, 501 U.S. 868, 878–79 (1991);

Buckley v. Valeo, 424 U.S. 1, 137–42 (1976); FEC v. Legi-

Tech, Inc., 75 F.3d 704, 705–06 (D.C. Cir. 1996).

Our holding tracks the cases in which the Supreme Court

has described Appointments Clause questions as

“nonjurisdictional,” even though they implicate core

separation of powers principles. For instance, in Freytag, the

Supreme Court examined whether the appointment of an

Article I court special tax judge satisfied the Appointments

Clause. 501 U.S. at 877. Even though that case, like ours,

involved important separation of powers issues “embedded in

the Appointments Clause,” the Court classified the issue as

“nonjurisdictional.” Id. at 878–79; see also id. at 893–94 (“A

party forfeits the right to advance on appeal a

nonjurisdictional claim, structural or otherwise, that he fails

to raise at trial.”) (Scalia, J., concurring in the judgment);

Buckley, 424 U.S. at 142 (stating that violations of

Appointments Clause did not negate past actions of Federal

Election Commission).

16 CONSUMER FIN. PROT. BUREAU V. GORDON

Buckley exemplifies this fundamental principle. The

Supreme Court in Buckley held that the Federal Election

Campaign Act violated the Appointments Clause, as it

permitted congressionally appointed FEC Commissioners to

discharge functions (including civil enforcement in federal

court) reserved only for “Officers of the United States.”

Buckley, 424 U.S. at 137–41. Under Gordon and JEP’s view,

this violation would raise irreparable Article III standing

problems, as these Commissioners (much like Cordray)

lacked the authority to take any steps on behalf of the FEC,

rendering any actions involving Article III litigation a nullity.

Rather than invalidate the FEC’s prior actions, the Court

instead accorded the Commission’s prior acts “de facto

validity” and granted a stay to allow Congress to take steps to

rectify the Article II problem and avoid “interrupting

enforcement” of the FECA’s valid provisions. Id. at 142–43.

Nowhere in Buckley did the Court suggest that the Article

II problems rendered the FEC a nullity for Article III

purposes, even though the Court discussed Article III earlier

in its opinion. See id. at 117–18. If Gordon and JEP were

correct, then the Court in Buckley would not have stayed

anything—rather, it would have entered an order dismissing

all FEC civil enforcement actions for lack of standing. When

confronted with a similar Article II problem, the D.C. Circuit

read the same passage in Buckley and rejected as “overstated”

the argument that an Article II defect “necessarily voids all

prior decisions” taken by FEC in civil enforcement actions.

See Legi-Tech, 75 F.3d at 708.3

3

The dissent’s attempts to distinguish these cases miss the mark. It

reads the D.C. Circuit’s opinion in Buckley to undermine the Supreme

Court’s holding in the same case, but then ignores the D.C. Circuit’s own

reading of Buckley in Legi-Tech, where the D.C. Circuit relies on Buckley

CONSUMER FIN. PROT. BUREAU V. GORDON 17

We agree with the D.C. Circuit’s reading of Article II and

Buckley. Indeed, neither Gordon nor JEP cite a single

case—save for the inapplicable Hollingsworth—to support

the argument that an Appointments Clause problem deprives

our court of Article III jurisdiction. Nothing in Noel Canning

suggests that Appointments Clause problems divest federal

courts of jurisdiction. It is true that “any sub silentio

assumption of jurisdiction in a case [by the Supreme Court]

‘does not constitute binding authority’ on the jurisdictional

question.” Thompson v. Frank, 599 F.3d 1088, 1090 n.1 (9th

Cir. 2010) (quoting Burbank-Glendale-Pasadena Airport

Auth. v. City of Burbank, 136 F.3d 1360, 1363 (9th Cir.

1998)). At the same time, we cannot turn a blind eye to the

fact that no court, including the Supreme Court, has ever

suggested that Article II problems nullify Article III

jurisdiction. Absent clear instruction from the Supreme

Court, we will not hold so here.

to ratify prior enforcement actions originally instituted by an

unconstitutionally composed FEC. Dissent at 41–42; Legi-Tech, 75 F.3d

at 707. As for Freytag, we agree that the case “did not raise any question

regarding standing.” Dissent at 40. That is because “nonjurisdictional”

Appointments Clause situations like these do not raise Article III issues.

Perhaps most telling, the dissent (like JEP and Gordon) cannot

identify any authority that actually supports its position—that the United

States’ Article III interest in a case turns solely on the status of one of its

officers.

18 CONSUMER FIN. PROT. BUREAU V. GORDON

B. Appointments Clause4

The initial invalid appointment of Cordray also is not fatal

to this case. The subsequent valid appointment, coupled with

Cordray’s August 30, 2013 ratification, cures any initial

Article II deficiencies.5

We are not the first court to grapple with this issue. For

example, in Legi-Tech, the FEC brought an enforcement

action in federal court after finding probable cause that Legi-

Tech violated election laws. 75 F.3d at 707. Even though the

FEC was illegally constituted when it brought the action, it

cured this problem when the newly constituted Commission

re-approved the litigation decision. Id. at 708–09. The D.C.

Circuit concluded that even if the subsequent FEC “review”

was “nothing more than a ‘rubberstamp,’” it still satisfied the

Appointments Clause. Id. at 709.

4

Because we conclude that there is Article III standing, we need not

reach the question of whether ratification can cure a defect in Article III

standing, which the dissent addresses. See Dissent at 43–44.

5

We may address this issue even though the district court refused to

resolve it because Gordon “properly raised” it in the district court.

O’Rourke v. Seaboard Surety Co., 887 F.2d 955, 957 (9th Cir. 1989). For

an argument to be “properly raised,” it “must be raised sufficiently for the

trial court to rule on it.” Id. Here, Gordon undoubtedly raised the

argument that Cordray was invalidly appointed under the Appointments

Clause and, as a result, the enforcement action against Cordray was

invalid. As this is an issue of law that does not depend on any further

development of the facts, we may exercise our discretion to address it.

See El Paso City of Tex. v. Am. W. Airlines, Inc., 217 F.3d 1161, 1165 (9th

Cir. 2000); see also Self-Realization Fellowship Church v. Ananda Church

of Self-Realization, 59 F.3d 902, 912 (9th Cir. 1995).

CONSUMER FIN. PROT. BUREAU V. GORDON 19

We agree with the D.C. Circuit’s approach. In reviewing

issues like these, the Supreme Court has looked to the

Restatement of Agency. See FEC v. NRA Political Victory

Fund, 513 U.S. 88, 98 (1994) (question of ratification is “at

least presumptively governed by principles of agency law”);

see also Doolin Sec. Sav. Bank, F.S.B. v. Office of Thrift

Supervision, 139 F.3d 203, 212–13 (D.C. Cir. 1998)

(applying Restatement of Agency to Appointments Clause

issue), superseded by statute on other grounds, Federal

Vacancies Reform Act of 1998, Pub. L. No. 105-277, 112

Stat. 2681, as recognized in SW Gen., Inc. v. NLRB, 796 F.3d

67, 70–71 (D.C. Cir. 2015).

Both Gordon and JEP recognize that for a ratification to

be effective, “it is essential that the party ratifying should be

able not merely to do the act ratified at the time the act was

done, but also at the time the ratification was made.” NRA

Political Victory Fund, 513 U.S. at 98 (emphasis in original)

(quoting Cook v. Tullis, 85 U.S. 332, 338 (1874)). This rule

of law is derived from the Second Restatement of Agency.

See id. Under the Second Restatement, if the principal (here,

CFPB) had authority to bring the action in question, then the

subsequent August 2013 ratification of the decision to bring

the case against Gordon is sufficient. See Restatement on

Agency (Second) § 84(1) (“An act which, when done, could

have been authorized by a purported principal, or if an act of

service by an intended principal, can be ratified if, at the time

of the affirmance, he could authorize such an act.”); Legi-

Tech, 75 F.3d at 707, 709. The Third Restatement, which is

less “stringent” than the Second, see Restatement on Agency

(Third) § 4.04 cmt. b, advises that a ratification is valid even

if the principal did not have capacity to act at the time, so

long as the person ratifying has the capacity to act at the time

of ratification, see id. § 4.04(1) (“A person may ratify an act

20 CONSUMER FIN. PROT. BUREAU V. GORDON

if (a) the person existed at the time of the act, and (b) the

person had capacity . . . at the time of ratifying the act.”). For

example, “if a personal representative has been appointed for

a principal, the personal representative may ratify on behalf

of the principal although the principal lacked capacity at the

prior time of the act that is ratified.” Id., cmt. b.

As we discussed above in the section rejecting Gordon’s

Article III challenge, Congress authorized the CFPB to bring

the action in question. See 12 U.S.C. § 5564(a)–(b). Because

the CFPB had the authority to bring the action at the time

Gordon was charged, Cordray’s August 2013 ratification,

done after he was properly appointed as Director, resolves

any Appointments Clause deficiencies. See Restatement

(Second) § 93(3) (“The affirmance can be made by an agent

authorized so to do.”); Intercollegiate Broad. Sys., Inc. v.

Copyright Royalty Bd., 796 F.3d 111, 121 (D.C. Cir. 2015)

(“[O]nce a new Board has been properly appointed (or

reconstituted), the Appointments Clause does not bar it from

reaching the same conclusion as its predecessor.”); Legi-

Tech, 75 F.3d at 707, 709 (writing that a newly constituted

FEC need not “start at the beginning” and “redo the

statutorily required procedures in their entirety”).6

6

Because we decide that Cordray’s ratification of the enforcement

action was effective, we need not address whether the original

constitutional error is susceptible to harmless error review and, if so,

whether the error here was harmless. We also need not decide whether the

officials’ decisions had de facto validity under the de facto officer

doctrine. See generally Ryder v. United States, 515 U.S. 177 (1995).

CONSUMER FIN. PROT. BUREAU V. GORDON 21

C. Merits of Action Against Gordon

Gordon alleges that the district court erred in granting

summary judgment in favor of the CFPB on its claims that he

violated (1) 12 U.S.C. §§ 5531 and 5536 of the CFPA by

engaging in deceptive advertising (counts one through three)

and (2) Regulation O (counts four through seven).

a. Counts One through Three: Violations of the

CFPA, 12 U.S.C. §§ 5531, 5536

Section 5536(a)(1)(B) states that “[i]t shall be unlawful

for (1) any covered person or service provider . . . (B) to

engage in any unfair, deceptive, or abusive act or practice.”

See also id. § 5531(a) (stating that the CFPB may take action

to “prevent a covered person or service provider from

committing or engaging in an unfair, deceptive, or abusive

practice under Federal law”). A “covered person” is “any

person that engages in offering or providing a consumer

financial product or service.” Id. § 5481(6)(A). Loan

modification and foreclosure prevention services constitute

“consumer financial product[s] or service[s]” under the

statute. Id. § 5481(5), (15)(A)(viii)(II).

The district court concluded that Gordon falsely

represented that (1) consumers would obtain mortgage loan

modifications that would substantially reduce mortgage

payments or interest rates, (2) he would conduct forensic

audits that would substantially reduce mortgage payments,

and (3) he was affiliated with, endorsed by, or approved by

the United States government. Gordon challenges these

determinations on several grounds, all of which are

unavailing.

22 CONSUMER FIN. PROT. BUREAU V. GORDON

First, Gordon argues that the district court erred in

concluding at the summary judgment phase that his marketing

materials deceptively suggested an affiliation with the United

States government. An act or practice is deceptive if:

(1) “there is a representation, omission, or practice that,”

(2) “is likely to mislead consumers acting reasonably under

the circumstances,” and (3) “the representation, omission, or

practice is material.” FTC v. Pantron I Corp., 33 F.3d 1088,

1095 (9th Cir. 1994) (citation omitted).7

Gordon does not argue that misleading consumers to

believe that he was affiliated with the United States

government would be immaterial, see FTC v. Stefanchik,

559 F.3d 924, 928 (9th Cir. 2009), but instead asserts that the

mailings were not deceptive. “Deception may be found based

on the ‘net impression’ created by a representation.” Id.

(citation omitted). Here, there can be no dispute that the net

impression was deceptive. The mailer bore the Equal

Opportunity Housing logo, stated that it was a “Notice of

HUD Rights,” and that it was provided courtesy of the

“Qualification Intake Department.” See Floersheim v. FTC,

411 F.2d 874, 876–78 (9th Cir. 1969). The CFPB submitted

evidence that consumers were, in fact, deceived. Eventually,

7

The term “deceptive act or practice” has an established meaning in the

context of the Federal Trade Commission Act, 15 U.S.C. § 45(a), and

Congress used very similar phrasing in § 5536(a)(1)(B). Compare

§ 5536(a)(1)(B) (prohibiting “any unfair, deceptive, or abusive act or

practice”), with 15 U.S.C. § 45(a) (prohibiting “unfair or deceptive acts or

practices”). Accordingly, we adopt that meaning here. See United States

v. Novak, 476 F.3d 1041, 1051 (9th Cir. 2007) (“[C]ourts generally

interpret similar language in different statutes in a like manner when the

two statutes address a similar subject matter.”). Moreover, the parties

both apply cases interpreting § 45(a) to inform their analysis of

§ 5536(a)(1)(B).

CONSUMER FIN. PROT. BUREAU V. GORDON 23

as Pessar testified, he stopped using the “Notice of HUD

Rights” mailer, as callers were complaining because they

thought they were getting in touch with a government agency.

The only evidence Gordon submits in response are his “bald

assertions” that the mailer was not deceptive, which is not

sufficient to create a triable issue of fact. Stefanchik,

559 F.3d at 929.

Second, Gordon argues that, even if the marketing

materials were deceptive, he cannot be held responsible

because Pessar and his company were in charge of marketing,

and Gordon had no control over the materials. An individual

may be liable for corporate violations if “(1) he participated

directly in the deceptive acts or had the authority to control

them and (2) he had knowledge of the misrepresentations,

was recklessly indifferent to the truth or falsity of the

misrepresentation, or was aware of a high probability of fraud

along with an intentional avoidance of the truth.” Id. at 931.8

There is no dispute of material fact that Gordon is liable

under this test, as he had control over the marketing materials

and knowledge of their contents. The CFPB submitted a

declaration from Pessar stating that “Gordon had final

decision-making authority for all marketing used by the

operation.” According to Pessar’s testimony, “Gordon

reviewed the scripts and any marketing material used by the

operation, and he edited and modified those items.” The

CFPB also submitted a business plan for Pessar’s and

Gordon’s loan modification venture that stated that “Mr.

8

We adopt the test for holding an individual liable for a corporation’s

actions used under the FTC Act. See supra n.7. Neither party objects to

the district court’s use of this test, and both apply it in their briefing to this

court.

24 CONSUMER FIN. PROT. BUREAU V. GORDON

Gordon will assure that all advertising is legal.” Further, the

CFPB submitted testimony from John Gearries, the office

manager at Gordon’s law firm, stating that he believed that

Gordon reviewed all the marketing materials, that Gordon

approved the use of the scripts read by sales representatives,

and that he had forwarded marketing materials to Gordon for

his review on at least one occasion. Finally, it submitted an

email from Gordon to Pessar in which Gordon states:

“Mainly, as it pertains to how existing clients will be pitched,

representations made to the public in marketing our services

. . . my word is the law. Period.”

Gordon’s only attempt to dispute this evidence is his own

declaration, in which he states that he had no control over

marketing, was not responsible for representations made by

sales personnel, and had no authority to approve or reject

mailers. This “conclusory, self-serving affidavit” is

insufficient to raise a triable issue of fact as to whether

Gordon had authority to control advertising because it lacks

“detailed facts and any supporting evidence.” FTC v. Publ’g

Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir. 1997);

see also Nigro v. Sears, Roebuck & Co., 784 F.3d 495,

497–98 (9th Cir. 2015). Moreover, it is undermined because

it contradicts Gordon’s prior statements in his emails to

Pessar. See Kennedy v. Applause, Inc., 90 F.3d 1477, 1481

(9th Cir. 1996).

Third, Gordon argues the agreements that his clients

eventually signed, which accurately described the services he

would perform, corrected any deceptive practices in which

Gordon or Pessar might have engaged. These written

agreements, however, do not absolve Gordon of liability. A

later corrective written agreement does not eliminate a

defendant’s liability for making deceptive claims in the first

CONSUMER FIN. PROT. BUREAU V. GORDON 25

instance. See Resort Car Rental Sys., Inc. v. FTC, 518 F.2d

962, 964 (9th Cir. 1975) (per curiam) (explaining that

advertising is deceptive “if it induces the first contact through

deception, even if the buyer later becomes fully informed

before entering the contract”).

Finally, Gordon asserts that the representations in the

advertising materials were mere “puffery.” Gordon does not,

however, identify any specific representations or explain why

they constitute puffery. Accordingly, this argument is

waived. See Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir.

1994) (finding that “a bare assertion does not preserve a

claim, particularly when, as here, a host of other issues are

presented for review”).

b. Counts Four through Seven: Violations of

Regulation O

In counts four through seven, the CFPB alleged that

Gordon violated Regulation O by (1) receiving up-front

payments for mortgage assistance relief services, (2) not

making required disclosures, (3) informing consumers not to

contact lenders, and (4) misrepresenting material aspects of

his services. Regulation O contains several provisions that

apply only to “mortgage assistance relief service provider[s].”

12 C.F.R. §§ 1015.3–1015.5. A “mortgage assistance relief

service provider” is any person that provides “any service,

plan, or program, offered or provided to the consumer in

exchange for consideration, that is represented, expressly or

by implication, to assist or attempt to assist the consumer

with,” among other things, obtaining a loan modification or

preventing foreclosure. Id. § 1015.2.

26 CONSUMER FIN. PROT. BUREAU V. GORDON

Gordon’s only defense on these counts is that he was not

a “mortgage assistance relief service provider” under the

meaning of Regulation O because he did not provide the

mortgage relief services at issue “in exchange for

consideration.” Instead, he argues, he charged fees

exclusively for “custom legal products,” and the loan

modification services were provided free of charge, as part of

a “pro bono program.” This obvious attempt to evade the

requirements of Regulation O fails. It is undisputed that

Gordon’s “pro bono” services were in reality in exchange for

consideration, because consumers were eligible for the “pro

bono” modification services only if they signed up for and

paid the fees for the legal products. Gordon suggests that this

court is bound by the language in his contract, stating this his

services were “pro bono,” but nothing in the regulations

suggest that this court must close its eyes to the facts and rely

only on the contract itself to determine whether the services

were actually “in exchange for consideration.” Id. § 1015.2.

Because there is no dispute as to a material fact regarding

Gordon’s liability, the CFPB is entitled to summary judgment

on all counts.

D. Remedies

Under the CFPA, the CFPB may seek various forms of

relief in an enforcement action, including a permanent or

temporary injunction, restitution, and disgorgement.

12 U.S.C. §§ 5564(a), 5565. Gordon argues that the district

court abused its discretion when it (1) imposed an equitable

monetary judgment against him in the amount of

$11,403,338.63 and (2) granted CFPB’s request for injunctive

relief, which prohibits Gordon from providing any mortgage

assistance relief product or service for a period of three years.

CONSUMER FIN. PROT. BUREAU V. GORDON 27

a. Monetary Judgment

As stated above, the district court entered a

$11,403,338.63 judgment against Gordon for disgorgement

and restitution. Disgorgement is a remedy in which a court

orders a wrongdoer to turn over all profits obtained by

violating the law. See SEC v. JT Wallenbrock & Assocs.,

440 F.3d 1109, 1113 (9th Cir. 2006). A district court has

“broad equity powers to order” disgorgement, and its

“disgorgement calculation requires only a reasonable

approximation of profits causally connected to the violation.”

Id. at 1113–14 (internal quotation marks and citation

omitted).

Restitution “is a form of ancillary relief” that a court can

order “[i]n the absence of proof of ‘actual damages.’” FTC

v. Gill, 265 F.3d 944, 958 (9th Cir. 2001). Restitution may be

measured by the “full amount lost by consumers rather than

limiting damages to a defendant’s profits.” Stefanchik,

559 F.3d at 931. Our circuit has adopted a two-step burden-

shifting framework for calculating restitution awards under

the FTC Act, which the district court applied below and we

apply here. See FTC v. Commerce Planet, Inc., No. 12-

57064, slip op. at 17 (9th Cir. Mar. 3, 2016). Under the first

step, the government “bears the burden of proving that the

amount it seeks in restitution reasonably approximates the

defendant’s unjust gains.” Id. A district court may use a

defendant’s net revenues as a basis for measuring unjust

gains. Id. at 18; see also Gill, 265 F.3d at 958 (“In the

absence of proof of ‘actual damages,’ the court properly used

the amounts consumers paid as the basis for the amount

Defendants should be ordered to pay for their wrongdoing.”).

If the government makes this threshold showing, the burden

shifts to the defendant to demonstrate that the net revenues

28 CONSUMER FIN. PROT. BUREAU V. GORDON

figure overstates the defendant’s unjust gains. See Commerce

Planet, slip op. at 18.

Here, the CFPB demonstrated that Gordon, Pessar, and

their respective entities collected $11,403,338.63 from

consumers from January 2010 through July 2012. The

burden then shifted to Gordon to demonstrate that the

defendants’ unjust gains were less than that amount. In most

of his objections to the judgment, Gordon fails to meet this

burden.

First, Gordon argues that the district court should not have

included fees paid by “satisfied” consumers. There is no

precedent for this proposition. See Gill, 265 F.3d at 958

(rejecting a defendant’s claim that fees paid by consumers

who have benefitted from the services should be excluded

from restitution because there was “no authority” for such an

argument). Moreover, even if there were, Gordon fails to

point to any evidence regarding which or how many

consumers were “satisfied” with their services, and therefore

fails to meet his burden.

Second, Gordon argues that the district court should not

have included fees that he refunded to consumers. Gordon,

however, failed to meet his burden to demonstrate that such

amounts should be subtracted from his unjust gains because,

as the district court noted, Gordon did not submit any

admissible evidence that he had refunded consumers, making

only the unsubstantiated statement that he has made

“reimbursement[s] to dissatisfied customers.” See Stefanchik,

559 F.3d at 931.

Third, Gordon argues that the district court should not

have included fees paid by consumers who were not

CONSUMER FIN. PROT. BUREAU V. GORDON 29

persuaded by the fraudulent materials. The government,

however, is entitled to the presumption that the individuals

who utilized Gordon’s services did so in reliance on the

misrepresentations. See Commerce Planet, slip op. at 19;

FTC v. Figgie Int’l Inc., 994 F.2d 595, 605 (9th Cir. 1993)

(per curiam). While this would not necessarily foreclose

Gordon from presenting evidence of non-reliance, he did not

do so.

Fourth, Gordon argues that the facts do not justify any

monetary award against him, because Pessar was in charge of

the advertising that led to counts one through three and “most

of the money went to Pessar.” Our precedent is clear that

“[e]quity may require a defendant to restore his victims to the

status quo where the loss suffered is greater than the

defendant’s unjust enrichment.” Stefanchik, 559 F.3d at 931;

see also Commerce Planet, slip op. at 10–11 (explaining that

there is “no support in our case law” for the proposition that

a restitution award “must be limited to the unjust gains each

defendant personally received”). Moreover, as described

above, Gordon had control over and approved the marketing

materials used, and it was not an abuse of discretion for the

district court to hold Gordon and his entities jointly and

severally liable for the full amount. Stefanchik, 559 F.3d at

931–32 & n.1 (holding that there was no abuse of discretion

where the district court found an individual, Stefanchik, and

the corporation he solely owned, Beringer Corporation,

jointly and severally liable for the full amount of sales made,

despite other defendants settling, where Stefanchik and

Beringer were the “driving force behind the marketing

scheme”).

Lastly, Gordon challenges the time period, January 2010

through July 2012, which the district court used to calculate

30 CONSUMER FIN. PROT. BUREAU V. GORDON

the monetary judgment. While his argument is unclear,

Gordon appears to argue that it was improper for the district

court to include the time period prior to the effectiveness of

Regulation O. See 12 C.F.R. §§ 1015.1–11. It also appears

that the relevant provisions of the CFPA were not in effect for

the entire time period. See Dodd-Frank Reform and

Consumer Protection Act, Pub. L. No. 111-203, 124 Stat.

1376 (2010).

While retroactivity of legislation and regulations is not

per se unlawful, we have a presumption against retroactivity

that generally requires “that the legal effect of conduct . . .

ordinarily be assessed under the law that existed when the

conduct took place.” Landgraf v. USI Film Prods., 511 U.S.

244, 265 (1994) (applying the presumption against

retroactivity to statutes); Bowen v. Georgetown Univ. Hosp.,

488 U.S. 204, 208 (1988) (applying the presumption to

regulations). Although undecided in our circuit, it may be

impermissible to enforce some provisions of the Dodd-Frank

Act (of which the CFPA is a part and which granted the

rulemaking authority that led to Regulation O, see 12 U.S.C.

§ 5512) retroactively. See Koch v. SEC, 793 F.3d 147,

157–58 (D.C. Cir. 2015) (addressing the issue and finding

that the SEC may not use the remedial provisions of the 2010

Dodd-Frank Act to punish Koch for his conduct in 2009);

Campbell v. Nationstar Mortg., 611 F. App’x 288, 296–98

(6th Cir. 2015) (affirming the district court’s decision not to

apply a CFPB regulation promulgated under the Dodd-Frank

Act and the Real Estate Settlement Procedures Act (RESPA)

retroactively, agreeing that an “effective date reflects an

intent not to apply it to conduct occurring prior to that date”).

We vacate and remand for the district court to consider

whether it is appropriate to include in its judgment against

Gordon money that Gordon earned in the time period prior to

CONSUMER FIN. PROT. BUREAU V. GORDON 31

the enactment or effectiveness of Regulation O and the

relevant portions of the CFPA.

b. Injunctive relief

“[T]he decision whether to grant or deny injunctive relief

rests within the equitable discretion of the district courts.”

eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 394 (2006).

Gordon argues that the district court abused its discretion in

ordering injunctive relief because it was not clear that

Gordon’s “wrongs [were] ongoing or likely to recur.” FTC

v. Evans Prods. Co., 775 F.2d 1084, 1087 (9th Cir. 1985)

(“As a general rule, past wrongs are not enough for the grant

of an injunction[.]”) (internal quotation marks and citations

omitted). According to Gordon, his “lack of desire and

ability to continue to assist distressed homeowners in the

future created a factual dispute sufficient to deny an

injunction.”

Assuming it applies here, the district court did not run

afoul of Evans Products.9 Unlike in Evans Products, where

the district court made no finding that the defendant’s

misconduct was likely to recur, see 775 F.2d at 1088, the

9

The FTC had authority to pursue the action in Evans Products under

15 U.S.C. § 53(b), which gives the FTC authority to pursue injunctive

relief only if it can show that a person “‘is violating, or is about to violate’

any law enforced by the FTC; the statute does not mention past

violations.” 775 F.2d at 1087 (quoting 15 U.S.C. § 53(b)(1)). The

provisions of the CFPA that give the CFPB authority to pursue injunctive

relief do not have that same limiting language. See 12 U.S.C. § 5564(a)

(giving CFPB authority to seek “all appropriate legal and equitable relief

. . . permitted by law”); id. § 5565(a)(1) (giving courts “jurisdiction to

grant any appropriate legal or equitable relief with respect to a violation

of Federal consumer financial law”).

32 CONSUMER FIN. PROT. BUREAU V. GORDON

district court specifically found that Gordon presented an

ongoing risk to consumers. This was not an abuse of

discretion. The record reflects that Gordon was continually

willing to evade and complicate the investigatory process in

ways that undermined his “sincere assurances” against future

violations. During the investigation, Gordon threatened the

CFPB and California State Bar investigators with

“lawlessness” and “anarchy.” Many similarly colorful and

vaguely threatening emails followed. The district court did

not abuse its discretion in concluding that Gordon presented

a risk of future harm if he immediately returned to working

with distressed homeowners without limitation.

Additionally, the record reflects that the district court

carefully considered the scope of the injunction and tailored

it to match the risk of harm it identified and minimize the

impact on Gordon’s legal business. The district court

concluded that the first proposed injunction was too broad, as

it contained provisions that would “unduly limit Gordon’s

ability to engage in lawful employment” with restrictions that

lacked “any corresponding benefit to consumers.” It required

the parties to meet and confer to compose a narrower

injunction. Due to its reasonable finding of future harm and

its efforts to narrowly tailor the injunction, there is no basis

for holding that the district court abused its discretion.

IV. CONCLUSION

This case requires us to decide whether an agency exists

for Article III purposes when its director lacks constitutional

authority to act on its behalf, similar to the age old question,

“If a tree falls in a forest and no one is around to hear it, does

it make a sound?” For purposes of Article III, we believe the

answer to both questions is a resounding yes. Moreover,

CONSUMER FIN. PROT. BUREAU V. GORDON 33

because Director Cordray ratified the decision to bring the

action against Gordon after his proper nomination and Senate

confirmation, there is no Appointments Clause issue.

Additionally, because Gordon has failed to demonstrate

that there is any dispute of material fact as to his liability

under the CFPA or Regulation O, the district court properly

granted summary judgment in favor of the CFPB. Further,

because the district court conscientiously tailored the

injunction at issue, it did not abuse its discretion in granting

equitable judgment. However, because the district court may

have impermissibly entered a monetary judgment against

Gordon for a time period prior to the enactment or effective

date of the relevant provisions of the CFPA and Regulation

O, we vacate and remand for further consideration.

We AFFIRM in part and VACATE AND REMAND in

part for reconsideration of the monetary judgment.

The parties shall bear their own costs on appeal.

IKUTA, Circuit Judge, dissenting:

Who was exercising the executive power of the United

States needed to bring this civil enforcement action? Not

Richard Cordray — he was not properly appointed by the

President and so was not an Officer of the United States at the

time the action was filed. Not the Consumer Financial

Protection Bureau — without an Officer of the United States,

it was a mere Congressional creation that could not exercise

executive power. In fact, no one had the executive power

necessary to prosecute this civil enforcement action in the

34 CONSUMER FIN. PROT. BUREAU V. GORDON

district court. And without the Executive’s power to “take

Care that the Laws be faithfully executed,” U.S. Const. art. II,

§ 3, no one could claim the Executive’s unique Article III

standing. Because the plaintiff here lacked executive power

and therefore lacked Article III standing, the district court

was bound to dismiss the action.

Today the majority flouts this most basic constitutional

limit to our authority by failing to give a single reason why

the Bureau had standing here. The majority’s view of

jurisdiction reduces to zero the “irreducible constitutional

minimum of standing,” Lujan v. Defs. of Wildlife, 504 U.S.

555, 560 (1992), and vitiates the standing requirement’s vital

role in preventing “the judicial process from being used to

usurp the powers of the political branches,” Hollingsworth v.

Perry, 133 S. Ct. 2652, 2661 (2013) (quoting Clapper v.

Amnesty Int’l USA, 133 S. Ct. 1138, 1146 (2013)). I decline

to participate in this power grab, and therefore I dissent.

I

The plaintiff here is the Consumer Financial Protection

Bureau, which was created by the Consumer Financial

Protection Act in 2010. The Act specified that the Bureau is

an executive agency, 12 U.S.C. § 5491(a), and would have a

director who would be “appointed by the President, by and

with the advice and consent of the Senate,” id.

§ 5491(b)(1)–(2). This statutory language tracks the language

of the Appointments Clause, ensuring that the Director of the

Bureau is also an Officer of the United States. U.S. Const.

CONSUMER FIN. PROT. BUREAU V. GORDON 35

art. II, § 2.1 The Act gave the Bureau broad powers,

including the authority to commence civil litigation against

any person who violates a Federal consumer financial law.

12 U.S.C. § 5564(a)–(b).

After the Act became law, President Obama appointed

Richard Cordray as the Director of the Bureau under the

Recess Appointments Clause, U.S. Const. art. II, § 2, cl. 3,

while the Senate was in a brief recess between two pro forma

sessions. In NLRB v. Noel Canning, the Supreme Court held

that President Obama’s appointments to the NLRB were

invalid exercises of the Recess Appointment power. 134 S.

Ct. 2550, 2557 (2014). Because these appointments were

made on the same day and through the same method as

President Obama’s appointment of Cordray to the CFPB,

there is no dispute that Cordray was not properly appointed

under the Constitution or the Act and was therefore not an

Officer of the United States with executive authority.

12 U.S.C. § 5491(b)(2)–(3); NLRB v. Noel Canning, 134 S.

Ct. 2550 (2014). The Bureau does not claim that some other

person in the Bureau had the requisite executive authority of

an Officer of the United States. Of course, Cordray could not

1

The Appointments Clause states:

[The President] shall nominate, and by and with the

Advice and Consent of the Senate, shall appoint

Ambassadors, other public Ministers and Consuls,

Judges of the supreme Court, and all other Officers of

the United States, whose Appointments are not herein

otherwise provided for, and which shall be established

by Law: but the Congress may by Law vest the

Appointment of such inferior Officers, as they think

proper, in the President alone, in the Courts of Law, or

in the Heads of Departments.

36 CONSUMER FIN. PROT. BUREAU V. GORDON

give his subordinates executive authority that he did not

possess. See, e.g., Olympic Fed. Sav. & Loan Ass’n v. Dir.,

Office of Thrift Supervision, 732 F. Supp. 1183, 1200 (D.D.C.

1990) (“[E]ach of the Directors could not delegate more

authority than he himself had.”). As explained below, this

means that on July 18, 2012, when a civil enforcement action

was filed against Chance Gordon and The Gordon Law Firm,

P.C., neither the Bureau nor anyone in it had executive

authority, and therefore the Bureau lacked standing to bring

this action.

A

In order to establish standing, a plaintiff must prove “a

concrete and particularized injury that is fairly traceable to

the challenged conduct, and is likely to be redressed by a

favorable judicial decision.” Hollingsworth, 133 S. Ct. at

2661 (citing Lujan, 504 U.S. at 560–61). An “injury to the

interest in seeing that the law is obeyed” does not suffice to

satisfy the standing inquiry, at least when the person suing is

a private citizen. See FEC v. Akins, 524 U.S. 11, 24 (1998).

Enforcement actions brought by the Executive satisfy the

requirements of Article III for purposes of a federal court’s

subject matter jurisdiction. The Constitution imposes on the

President the duty to “take Care that the Laws be faithfully

executed,” U.S. Const. art. II, § 3, and an important

component of that duty is obtaining criminal convictions for

violations of law in federal court, see United States v.

Valenzuela-Bernal, 458 U.S. 858, 863 (1982), as well as

enforcing and defending federal law in civil suits, see, e.g.,

Buckley v. Valeo, 424 U.S. 1, 138 (1976) (“A lawsuit is the

ultimate remedy for a breach of the law, and it is to the

President, and not to the Congress, that the Constitution

CONSUMER FIN. PROT. BUREAU V. GORDON 37

entrusts the responsibility to ‘take Care that the Laws be

faithfully executed.’” (quoting U.S. Const. art. II, § 3)). The

Executive has a unique need to access the federal courts in

order to fulfill this constitutional responsibility for ensuring

that public rights are enforced, and such an executive

enforcement action is a “Case” or “Controversy” that satisfies

Article III. See Steel Co. v. Citizens for a Better Env’t,

523 U.S. 83, 102 n.4 (1998) (confirming that the Court’s

standing jurisprudence “derives from Article III and not

Article II,” even when it has “an impact on Presidential

powers”). Therefore, federal courts have jurisdiction over

such executive actions under Article III. See In re Debs,

158 U.S. 564, 586 (1895) (holding that when the government

acts to enforce public rights, “the mere fact that the

government has no pecuniary interest in the controversy is

not sufficient to exclude it from the courts”).

There is only one way for a plaintiff to obtain the

Executive’s Article III standing to enforce public rights in

federal court: the plaintiff must be vested with executive

authority. The Constitution vests the executive power “in a

President of the United States of America.” U.S. Const. art.

II, § 1. The President may authorize others to exercise

executive authority pursuant to the Appointments Clause of

the Constitution, U.S. Const. art. II, § 2, which requires the

President to appoint principal officers with the “Advice and

Consent” of the U.S. Senate.2 See Buckley, 424 U.S. at

125–27. Because the Appointments Clause provides “the

only authorization for appointment of those to whom

2

Inferior officers may be appointed by the President alone, the heads of

departments, or the judiciary, as Congress may determine, but it is

undisputed that no inferior officer was involved in the civil enforcement

action here.

38 CONSUMER FIN. PROT. BUREAU V. GORDON

substantial executive or administrative authority is given by

statute,” id. at 124–25, any person exercising significant

executive authority must “be appointed in the manner

prescribed” by that clause, id. at 126. A person properly

appointed would thus have standing to file suit in vindication

of public rights. Id. at 126, 140.

We know that Cordray was not properly appointed by the

President and therefore did not have any authority to enforce

public rights. As a result, Cordray lacked the Executive’s

unique Article III standing.

And without Cordray, or any properly appointed Officer

of the United States, the Bureau lacked any executive

authority that would allow it to enforce public rights.

Contrary to the majority, Maj. op. at 13–14, Congress cannot

by itself confer executive authority to bring a civil

enforcement action on an entity created by statute. See

Buckley, 424 U.S. at 137–38. In Buckley, the Court

considered a provision in the 1974 Amendments to the

Federal Election Campaign Act (FECA) that empowered the

Federal Election Commission (FEC) to file civil enforcement

suits. Id. at 6, 111. Because FECA gave Congress the right

to appoint a majority of the FEC’s members, id. at 126–27,

Buckley held that the FEC could not exercise the FECA’s

grant of enforcement power or conduct civil litigation. Id. at

137–40. Only the President and persons who are “Officers of

the United States” could do so. Id. at 139–40. Buckley

therefore struck down the provisions in FECA “vesting in the

[FEC] primary responsibility for conducting civil litigation in

the courts of the United States for vindicating public rights.”

Id. at 140. In light of Buckley’s reasoning, the Act’s

statement that the Bureau is an Executive Branch agency is

not enough to give the Bureau the Executive’s enforcement

CONSUMER FIN. PROT. BUREAU V. GORDON 39

authority. Cf. Maj. op. at 13–14. As a result, the Bureau did

not have the Executive’s unique Article III standing.3

If neither Cordray nor the Bureau had standing, then no

one before the district court in this case had Article III

standing to bring this action against Gordon and his law firm.4

Since Article III standing is assessed at the time an action is

filed and must be met throughout all stages of litigation in the

federal courts, Hollingsworth, 133 S. Ct. at 2661, the district

court had a duty to determine whether the Bureau had

standing before ruling on the enforcement action. WildEarth

Guardians v. EPA, 759 F.3d 1064, 1070 (9th Cir. 2014)

(quoting Summers v. Earth Island Inst., 555 U.S. 488, 499

(2009)). Because the requirements of Article III were not

satisfied when the Bureau filed this action, the district court

was obliged to dismiss it for want of subject matter

jurisdiction. We are now required to do the same.

Hollingsworth, 133 S. Ct. at 2659.

B

The majority fails to even address how a Bureau with no

executive power has standing to bring a civil enforcement

3

Nor can Congress confer the Executive’s unique Article III standing to

private individuals. See Lujan, 504 U.S. at 573–74 (holding that Congress

cannot confer the Executive’s standing to enforce public rights on private

individuals through “citizen-suit” provisions); see also Vt. Agency of Nat.

Res. v. U.S. ex rel. Stevens, 529 U.S. 765, 772–74 (2000) (holding that

private individuals can assert the federal government’s interests in a qui

tam suit because they have their own pecuniary interest as partial

assignees of the government’s pecuniary claim).

4

Neither Richard Cordray nor the Bureau allege any injury in fact that

would otherwise provide standing under Article III.

40 CONSUMER FIN. PROT. BUREAU V. GORDON

action. Instead of providing reasoning, the majority merely

makes the conclusory statement that the Bureau is “part of the

Executive Branch,” Maj. op. at 14, which does not explain the

source of the Bureau’s executive power. The majority then

points to two cases rejecting Appointments Clause claims as

“nonjurisdictional.” Maj. op. at 15. But these cases give the

majority no support because neither addressed the issue of

standing. The first case, Freytag v. Commissioner, addresses

only the question whether a court should entertain an

argument that had not been raised below. Freytag ruled that

a statute authorizing the Chief Judge of the Tax Court to

assign any proceeding to a special trial judge did not violate

the Appointments Clause. 501 U.S. 868 (1991). As a

preliminary housekeeping matter, the Court held that it could

consider the appellants’ Appointments Clause objection to the

judicial officer for the first time on appeal because such

objection was “in the category of nonjurisdictional structural

constitutional objections that could be considered on appeal

whether or not they were ruled upon below.” Id. at 878–79.

Because there was no dispute that the petitioners (who had

been ordered to pay taxes owed to the federal government)

had suffered a concrete and particularized injury, this case did

not raise any question regarding standing and therefore

provides no support to the majority’s theory that the court has

jurisdiction to hear a claim brought by a plaintiff who lacks

the Executive’s unique Article III standing to bring an

enforcement action.

Nor did the majority’s second authority, Buckley, hold

that a court has jurisdiction over a civil enforcement action

brought by someone who lacks standing. See Maj. op. at

15–16. Of course, Buckley did not address the FEC’s

standing at all, and thus has no precedential effect on this

issue. See Steel Co., 523 U.S. at 91. Moreover, contrary to

CONSUMER FIN. PROT. BUREAU V. GORDON 41

the majority, Buckley did not hold that the FEC could bring

civil enforcement actions at a time when it lacked the

Executive’s enforcement authority. Maj. op. at 16. Rather,

the Court accorded de facto validity only to the FEC’s past

administrative actions and legislative determinations that

were analogous to the powers that Congress could delegate to

one of its own committees. Buckley, 424 U.S. at 142.

Specifically, the Court held that the FEC’s inability to

exercise enforcement powers “because of the method by

which its members have been selected” did not “affect the

validity of the Commission’s administrative actions and

determinations to this date, including its administration of

those provisions, upheld today, authorizing the public

financing of federal elections” and so those “past acts of the

Commission are therefore accorded de facto validity, just as

we have recognized should be the case with respect to

legislative acts performed by legislators held to have been

elected in accordance with an unconstitutional apportionment

plan.” Id. (emphasis added); see also id. at 137.

Indeed, at the time the Court ruled, it appears that the

FEC had not yet even exercised its enforcement authority. As

Buckley explained, the D.C. Circuit had ruled that it could not

address the constitutionality of the FEC’s enforcement

authority because it was not yet ripe for resolution. Id. at 115

n.157; see also Buckley v. Valeo, 519 F.2d 821, 893 (D.C.

Cir. 1975) (“No party has been joined in a civil enforcement

action initiated by the Commission.”). The Court disagreed

with the D.C. Circuit on the ripeness issue, but only because

by that time, the FEC “ha[d] undertaken to issue rules and

regulations,” and “[w]hile many of its other functions

remain[ed] as yet unexercised, the date of their all but certain

exercise [was] now closer by several months than it was at

the time the Court of Appeals ruled.” 424 U.S. at 116–17.

42 CONSUMER FIN. PROT. BUREAU V. GORDON

Based on these and other statements in Buckley, it is clear that

the FEC had not undertaken any enforcement action at the

time the Court ruled (or at least, the Court did not know of

any), and therefore we cannot infer that the Court accorded de

facto validity to such actions.5

Because Freytag and Buckley are inapposite and did not

address the standing issue before us here, the majority has no

support for its conclusion that the Bureau has standing to

bring a civil enforcement action to enforce the Act. Instead

of explaining why the Bureau has standing under Article III,

the majority instead claims that the Bureau’s standing to

bring a civil enforcement action is not affected by the

President’s failure to appoint Cordray under Article II and

accuses the dissent of conflating Article II and Article III.

Maj. op. at 15. But this is backwards. The improper

appointment of Cordray merely deprived the Bureau of one

basis for standing. In most cases, an executive agency has

Article III standing because it has a director properly vested

with executive authority under Article II, but it is undisputed

that the Bureau cannot claim standing on this basis. So the

real question is: what is the alternative basis for the Bureau’s

standing? Instead of providing one, the majority merely

reiterates that Congress enacted a statute stating that the

Bureau is part of the Executive Branch. Maj. op. at 14. But

Congress cannot confer executive authority to bring a civil

enforcement action on an entity created by statute, see

5

The majority cites Legi-Tech for the proposition that the D.C. Circuit

interpreted Buckley as retroactively validating civil enforcement actions

brought by an improperly constituted FEC. Maj. op. at 16. This is

mistaken: Legi-Tech held that a properly constituted FEC had the

authority to continue an enforcement action, and did not address any

standing issue. FEC v. Legi-Tech, Inc., 75 F.3d 704 (D.C. Cir. 1996).

CONSUMER FIN. PROT. BUREAU V. GORDON 43

Buckley, 424 U.S. at 137–38, so this rationale fails. In sum,

the majority offers no explanation for the Bureau’s standing

because it has none.

II

Because Article III standing must exist at the time a

complaint is filed, Richard Cordray’s August 30, 2013,

ratification could not retroactively cure the district court’s

lack of jurisdiction.

Federal courts have consistently rejected arguments that

a later act can cure a lack of standing at the time suit was

filed. Thus, where a plaintiff files a complaint before its

asserted injury occurred, it lacks standing even if a sufficient

injury-in-fact occurs while the case is pending. See Police &

Fire Ret. Sys. of Detroit v. IndyMac MBS, Inc., 721 F.3d 95,

110 (2d Cir. 2013) (“[W]e hold that the Rule 15(c) ‘relation

back’ doctrine does not permit members of a putative class,

who are not named parties, to intervene in the class action as

named parties in order to revive claims that were dismissed

from the class complaint for want of jurisdiction.”); Utah

Ass’n of Ctys. v. Bush, 455 F.3d 1094, 1101 & n.6 (10th Cir.

2006) (holding that “[b]ecause standing is determined as of

the time of the filing of the complaint,” the plaintiff’s alleged

subsequent injury could not serve as a basis for standing).

Similarly, the intervention of a party with standing after an

action has been filed “cannot cure any jurisdictional defect

that would have barred the federal court from hearing the

original action.” 7 Charles Alan Wright, Arthur R. Miller, et

al., Federal Practice and Procedure § 1917 (3d ed. 2005); see

also Disability Advocates, Inc. v. N.Y. Coalition for Quality

Assisted Living, Inc., 675 F.3d 149, 160–62 (2d Cir. 2012)

(“[I]f jurisdiction is lacking at the commencement of a suit,

44 CONSUMER FIN. PROT. BUREAU V. GORDON

it cannot be aided by the intervention of a plaintiff with a

sufficient claim.” (alterations omitted)).

At the time the Bureau filed this enforcement action, it

had no standing because it had no executive authority to

vindicate the public interest in federal court. While the

President subsequently properly appointed an Officer of the

United States to the position of Director, who could then

constitutionally bring an enforcement action, that official

could not retroactively cure the Bureau’s lack of standing.

Cf. FEC v. NRA Political Victory Fund, 513 U.S. 88, 90,

98–99 (1994) (holding that the Solicitor General’s ratification

of an unauthorized petition for certiorari could not cure a

failure to meet the “mandatory and jurisdictional” 90-day

deadline to file a petition).

III

Because the Bureau lacked standing when it brought this

enforcement action, we lack jurisdiction. This conclusion

undoubtedly applies to numerous other enforcement actions

taken by the Bureau for the 18 months of its existence before

Richard Cordray was properly confirmed by the Senate in

July 2013. But while the Supreme Court understands the

practical consequences of invalidating large numbers of

agency actions, it has nevertheless done so when the law

requires. See Noel Canning v. NLRB, 705 F.3d 490, 493

(D.C. Cir. 2013), aff’d 134 S. Ct. 2550 (2014) (holding that

because there was no quorum of validly appointed board

members, the NLRB “lacked authority to act,” and the

enforcement order was therefore “void ab initio”); see also

New Process Steel, L.P. v. NLRB, 560 U.S. 674, 687–88

(2010); id. at 689 (Kennedy, J., dissenting) (“Under the

Court’s holding, the Board was unauthorized to resolve the

CONSUMER FIN. PROT. BUREAU V. GORDON 45

more than 500 cases it addressed during those 26 months in

the course of carrying out its responsibility . . . .”).

We likewise have a duty to dismiss this case for lack of

Article III jurisdiction, practical effects notwithstanding.

“[N]o principle is more fundamental to the judiciary’s proper

role in our system of government than the constitutional

limitation of federal-court jurisdiction to actual cases or

controversies.” DaimlerChrysler Corp. v. Cuno, 547 U.S.

332, 341 (2006). The limitations imposed by Article III may

not be swept aside for “the sake of convenience and

efficiency.” Raines v. Byrd, 521 U.S. 811, 820 (1997).

Because the majority ignores these fundamental limits to our

Constitutional authority, I dissent.