Federal Trade Commission v. Burnlounge Inc et al

Filing 437

FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF AGAINST DEFENDANTS BURNLOUNGE, INC., JUAN ALEXANDER ARNOLD, JOHN TAYLOR AND ROB DEBOER filed by Judge George H Wu (MD JS-6. Case Terminated) (pj)

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1 MADE JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION 9 10 11 12 13 14 15 ______________________________ ) FEDERAL TRADE COMMISSION, ) ) Plaintiff ) ) v. ) ) BURNLOUNGE, INC., et al., ) ) Defendants. ) ______________________________ ) Case No. CV 07-3654 GW FMOx FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF AGAINST DEFENDANTS BURNLOUNGE, INC., JUAN ALEXANDER ARNOLD, JOHN TAYLOR AND ROB DEBOER 16 17 On June 6, 2007, the Plaintiff, Federal Trade Commission (“FTC” or 18 “Commission”) filed a Complaint for Injunctive and Other Equitable Relief against 19 BurnLounge, Inc., Juan Alexander Arnold, John Taylor, Rob DeBoer and Scott 20 Elliot pursuant to Section 13(b) of the Federal Trade Commission Act (“FTC 21 Act”), 15 U.S.C. § 53(b), alleging that they had engaged in deceptive acts or 22 practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). A 23 settlement was agreed upon between the Commission and Defendant Scott Elliot, 24 and the Court entered a stipulated final order for permanent injunction and other 25 equitable relief against him (Docket No. 248) on June 16, 2008. 26 As to the remaining defendants, the matter proceeded to a nine-day bench 27 trial between December 9, 2008 and December 22, 2008. On March 30, 2009, the 28 Court held a hearing to allow the parties to present closing arguments. On July 1, 1 2011, the Court issued a Statement of Decision (Docket No. 431) finding by a 2 preponderance of evidence that BurnLounge, Inc., Juan Alexander Arnold, John 3 Taylor, and Rob DeBoer had violated Section 5 of the FTC Act, and that 4 permanent injunctive and equitable monetary relief was warranted pursuant to 15 5 U.S.C. §§ 45 and 53. The Court directed Plaintiff to resubmit an amended 6 proposed order conforming to the Court’s Statement of Decision. Based on the record established in this matter and for reasons set forth in the 7 8 Court’s Statement of Decision, it is hereby ORDERED, ADJUDGED AND 9 DECREED: DEFINITIONS 10 For purposes of this Final Judgment and Order for Permanent Injunction and 11 12 Other Equitable Relief (hereinafter “Final Order”), the following definitions shall 13 apply: 14 15 1. “Business opportunity” means: (a) A commercial arrangement in which the seller solicits a prospective purchaser to enter into a new business; 16 17 (b) The prospective purchaser makes a required payment; and 18 (c) The seller, expressly or by implication, orally or in writing, 19 represents that the seller or one or more designated persons 20 will: 21 (i) Provide locations for the use or operation of equipment, 22 displays, vending machines, or similar devices, owned, 23 leased, controlled or paid for by the purchaser; 24 (ii) Provide outlets, accounts, or customers, including, but 25 not limited to, Internet outlets, accounts, or customers, 26 for the purchaser’s goods or services; or 27 28 (iii) Buy back any or all of the goods or services that the purchaser makes, produces, fabricates, grows, breeds, Page 2 1 modifies, or provides, including but not limited to 2 providing payment for such services as, for example, 3 stuffing envelopes from the purchaser’s home. 4 2. "Business Venture" means any written or oral business arrangement, 5 however denominated, that is a business opportunity, franchise, or that 6 consists of the payment of any consideration in exchange for: (a) the 7 right or means to offer, sell, or distribute goods or services (regardless 8 of whether identified by a trademark, service mark, trade name, 9 advertising or other commercial symbol); and (b) more than nominal 10 assistance to any person or entity in connection with or incident to the 11 establishment, maintenance, or operation of a new business, or the 12 entry by an existing business into a new line or type of business. 13 3. subscriber, or natural person. 14 15 "Consumer" means an actual or potential purchaser, customer, 4. "Defendant BurnLounge" means Defendant BurnLounge, Inc., and its successors and assigns. 16 17 5. “Defendant Arnold” means Defendant Juan Alexander Arnold. 18 6. “Defendant Taylor” means Defendant John Taylor, whose legal name is John Marcus Taylor. 19 20 7. name is Robert Edwards DeBoer. 21 22 8. 9. “Individual Defendants” means Defendants Arnold, Taylor and DeBoer. 25 26 “Defendants” means Defendants BurnLounge, Inc., Juan Alexander Arnold, John Taylor and Rob DeBoer. 23 24 “Defendant DeBoer” means Defendant Rob DeBoer, whose legal 10. The term "document" is synonymous in meaning and equal in scope to 27 the usage of the term in Federal Rule of Civil Procedure 34(a), and 28 includes writings, drawings, graphs, charts, photographs, audio and Page 3 1 video recordings, electronically stored information, computer records, 2 and other data compilations from which information can be obtained 3 and translated, if necessary, through detection devices into reasonably 4 usable form. A draft or non-identical copy is a separate document 5 within the meaning of the term. 6 11. “Franchise” means any continuing commercial relationship or 7 arrangement, whatever it may be called, in which the terms of the 8 offer or contract specify, or the franchise seller promises or represents, 9 orally or in writing, that: (a) the franchisee will obtain the right to 10 operate a business that is identified or associated with the franchisor’s 11 trademark, or to offer, sell, or distribute goods, services, or 12 commodities that are identified or associated with the franchisor’s 13 trademark; (b) the franchisor will exert or has authority to exert a 14 significant degree of control over the franchisee’s method of 15 operation, or provide significant assistance in the franchisee’s method 16 or operation; and (c) as a condition of obtaining or commencing 17 operation of the franchise, the franchisee makes a required payment or 18 commits to make a required payment to the franchisor or its affiliate. 19 12. “Franchisee” means any person who is granted a franchise. 20 13. “Franchise seller” means a person that offers for sale, sells, or arranges for the sale of a franchise. 21 22 14. participates in the franchise relationship. 23 24 15. "Material fact" means any fact likely to affect a person's choice of, or conduct regarding, goods, services, or business ventures. 25 26 “Franchisor” means any person who grants a franchise and 16. "Multi-level Marketing Program" means any marketing program in 27 which participants pay money to the program promoter in return for 28 which the participants obtain the right to: (a) recruit additional Page 4 1 participants, or have additional participants placed by the promoter or 2 any other person into the program participant’s downline, tree, 3 cooperative, income center, or other similar program grouping; (b) sell 4 goods or services; and (c) receive payment or other compensation, in 5 whole or in part, based upon the sales of those in the participants 6 downline, tree, cooperative, income center or similar program 7 grouping. 8 17. is not currently engaged, or a new line or type of business. 9 10 “New business” means a business in which the prospective purchaser 18. “Participating in any prohibited marketing scheme” includes, but is 11 not limited to, promoting, marketing, advertising, offering for sale, or 12 selling, or assisting others in the offering for sale or selling the right to 13 participate in, the prohibited marketing scheme, as well as acting or 14 serving as an officer, director, employee, salesperson, agent, 15 shareholder, advisor, consultant, independent contractor, or 16 distributor, or acting as a speaker or spokesperson on behalf of, any 17 prohibited marketing scheme. 18 19. "Prohibited Marketing Scheme” means a pyramid sales scheme, Ponzi 19 scheme, chain marketing scheme, or other marketing plan or program 20 in which participants pay money or valuable consideration in return 21 for which they obtain the right to receive rewards for recruiting other 22 participants into the program, and those rewards are unrelated to the 23 sale of products or services to ultimate users. For purposes of this 24 definition, “sale of products or services to ultimate users” does not 25 include sales to other participants or recruits or to the participants’ 26 own accounts. 27 28 20. “Trademark” means trademarks, service marks, names, logos, and other commercial symbols. Page 5 1 ORDER 2 I. Prohibited Marketing Schemes 3 IT IS THEREFORE ORDERED that each Defendant and their officers, 4 agents, servants, employees, and attorneys, and those persons in active concert or 5 participation with them who receive actual notice of this Final Order by personal 6 service or otherwise, whether acting directly or through any entity, corporation, 7 subsidiary, division, or other device, are permanently restrained and enjoined from 8 engaging, participating, or assisting in any manner or capacity whatsoever, in any 9 Prohibited Marketing Scheme. II. Prohibited Representations 10 11 IT IS FURTHER ORDERED that, in connection with the advertising, 12 promotion, offering for sale, or sale, or assisting others in the advertising, 13 promotion, offering for sale, or sale of any Multi-level Marketing Program or 14 Business Venture, each Defendant and their officers, agents, servants, employees, 15 and attorneys, and those persons in active concert or participation with them who 16 receive actual notice of this Final Order by personal service or otherwise, whether 17 acting directly or through any entity, corporation, subsidiary, division, or other 18 device, are permanently restrained and enjoined from making, expressly or by 19 implication, orally or in writing, any false or misleading statement or 20 misrepresentation of material fact including, but not limited to, the following: 21 A. Misrepresentations about the amount of sales, income, or profits that a 22 participant in such Multi-level Marketing Program or Business Venture can 23 reasonably expect to achieve; 24 B. Misrepresentations about the amount of sales, income, or profits that a 25 participant or participants in such Multi-level Marketing Program or Business 26 Venture have actually achieved; 27 28 C. Misrepresentations about the profitability of participating in such Multi-level Marketing Program or Business Venture Page 6 1 D. Misrepresentations that a person who participates in such Multi-level 2 Marketing Program or Business Venture can reasonably expect to recoup his or her 3 investment; 4 5 6 7 8 9 10 E. in such Multi-level Marketing Program or Business Venture; F. Misrepresentations of the legality of such Multi-level Marketing Program or Business Venture; and G. Misrepresentations of any material aspect of the performance, efficacy, nature, or central characteristic of any good or service offered for sale through such Multi-level Marketing Program or Business Venture. III. Prohibition Against Material Omissions 11 12 Misrepresentations of any reward offered to or earned by participants IT IS FURTHER ORDERED that, in connection with the advertising, 13 promotion, offering for sale, or sale, or assisting others in the advertising, 14 promotion, offering for sale, or sale of any Multi-level Marketing Program or 15 Business Venture, each Defendant and their officers, agents, servants, employees, 16 and attorneys, and those persons in active concert or participation with them who 17 receive actual notice of this Final Order by personal service or otherwise, whether 18 acting directly or through any entity, corporation, subsidiary, division, or other 19 device, are hereby permanently restrained and enjoined from failing to disclose, 20 clearly and conspicuously, to any participant or prospective participant in any 21 Multi-level Marketing Program or Business Venture to whom any earnings, profits 22 or sales volume claims have been made: 23 A. The number and percentage of participants in the Multi-level 24 Marketing Program or Business Venture who have earned, profited or sold at least 25 the amount represented; and 26 B. The number and percentage of participants in the Multi-level 27 Marketing Program or Business Venture who have made a profit through their 28 participation in the Multi-level Marketing Program or Business Venture. Page 7 IV. Equitable Monetary Relief 1 IT IS FURTHER ORDERED that: 2 3 A. Judgment is hereby entered in favor of the Commission and against 4 Defendants BurnLounge and Arnold, jointly and severally, in the amount of 5 sixteen million two hundred forty-five thousand seven hundred ninety-nine dollars 6 and seventy cents ($16,245,799.70), to be utilized to directly reimburse 7 consumers who were injured by the BurnLounge pyramid scheme, except as 8 provided for in Section V.A. The judgment shall be paid to the Commission within 9 ten (10) days of entry of this Final Order. Full payment of this sum shall fully 10 satisfy all monetary claims asserted by the Commission against Defendants 11 BurnLounge and Arnold in this matter. Within ten (10) days of entry of this Final 12 Order, in partial satisfaction of the judgment, Defendants Arnold and BurnLounge 13 shall do the following: 1. 14 Defendant Arnold shall transfer to the Commission his interest 15 in 1430 N. Cahuega Partners, LP, and all rights and title to that 16 interest; and 2. 17 Defendant BurnLounge shall: a. 18 Transfer to the Commission its membership interest in 19 Beatport LLC, and all rights and title to that membership 20 interest; and b. 21 Transfer to the Commission all funds owned by 22 BurnLounge or held on its behalf in banks or financial 23 institutions, or otherwise. These funds shall include, but 24 not be limited to, the $72,076.68 and $50,267.00 and any 25 interest earned thereon, that Defendant BurnLounge was 26 ordered to preserve, pursuant to the Court’s Order of 27 August 4, 2008 [Docket No. 268]. 28 B. Judgment is hereby entered in favor of the Commission and against Page 8 1 Defendant DeBoer in the amount of one hundred fifty thousand dollars 2 ($150,000.00) as disgorgement. Defendant DeBoer shall disgorge that amount to 3 the Commission within ten (10) days of entry of this Final Order. Full payment of 4 this sum shall fully satisfy all monetary claims asserted by the Commission against 5 Defendant DeBoer in this matter. 6 C. Judgment is hereby entered in favor of the Commission and against 7 Defendant Taylor, in the amount of six hundred twenty thousand one hundred 8 thirty-nine dollars and sixty-four cents ($620,139.64) as disgorgement. Defendant 9 Taylor shall disgorge that amount to the Commission within ten (10) days of entry 10 of this Final Order. Full payment of this sum shall fully satisfy all monetary claims 11 asserted by the Commission against Defendant Taylor in this matter. 12 13 14 D. The judgments entered pursuant to this Section are equitable monetary relief, and are not fines, penalties, punitive assessments or forfeitures. E. Defendants shall relinquish all dominion, control, and title to the 15 funds or assets paid or transferred pursuant to this Final Order to the fullest extent 16 permitted by law. 17 F. Pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. 18 § 1681b(1), any consumer reporting agency may furnish consumer reports 19 concerning the Individual Defendants to the FTC, which shall be used for purposes 20 of collecting and reporting on any delinquent amount arising out of this Order. V. Administration of Funds Collected 21 22 IT IS FURTHER ORDER THAT: 23 A. Any and all funds collected by Plaintiff pursuant to this Final Order, 24 shall be deposited into a fund administered by the Commission or its agent to be 25 used for consumer redress and any attendant expenses for the administration of any 26 redress fund. Defendants shall have no right to contest the manner of distribution 27 chosen by the Commission. The Commission in its sole discretion may use a 28 designated agent to administer consumer redress. If the Commission determines in Page 9 1 its sole discretion that redress to purchasers is wholly or partially impracticable, or 2 any funds collected from Defendants remain after the redress process is completed, 3 then any funds not used for redress or expenses attendant to the redress fund shall 4 be deposited in the United States Treasury as disgorgement. 5 B. Defendants shall cooperate fully to assist the Commission in 6 identifying consumers who may be entitled to redress pursuant to this Final Order. 7 The cooperation shall include, but not be limited to, providing Plaintiff a list of 8 each consumer who purchased a VIP, Exclusive or Basic package, and at any time 9 was a BurnLounge Mogul. As to each such consumer, Defendants shall provide 10 consumer contact information including the consumer’s name, member and retailer 11 identification numbers, address, telephone numbers and e-mail addresses. This 12 consumer contact information shall be provided to Plaintiff within twenty (20) 13 days of entry of this Final Order in the form of a searchable electronic document 14 formatted in Microsoft Excel [.xls or .xlsx] or Microsoft Access [.mdb or .mdbx], 15 and supplied on CD-R CD ROM optical disks formatted to ISO 9660 16 specifications, DVD-ROM optical disks for Windows-compatible personal 17 computers, or USB 2.0 flash drives, or in such other electronic form as may be 18 agreed to in writing by Plaintiff. VI. Compliance Monitoring 19 20 21 22 IT IS FURTHER ORDERED that, for the purpose of monitoring and investigating compliance with any provision of this Final Order: A. Within ten (10) days of receipt of written notice from a representative 23 of the Commission, Defendants each shall submit additional written reports, which 24 are true and accurate and sworn to under penalty of perjury; produce documents for 25 inspection and copying; appear for deposition; and provide entry during normal 26 business hours to any business location in each Defendant’s possession or direct or 27 indirect control to inspect the business operation; 28 B. In addition, the Commission is authorized to use all other lawful Page 10 1 means, including but not limited to: 1. 2 Obtaining discovery from any person, without further leave of 3 court, using the procedures prescribed by Fed. R. Civ. P. 30, 31, 4 33, 34, 36, 45 and 69; 2. 5 Posing as consumers and suppliers to Defendants, their 6 employees, or any other entity managed or controlled in whole 7 or in part by any Defendant, without the necessity of 8 identification or prior notice; and 9 C. Defendants shall permit representatives of the Commission to 10 interview any employer, consultant, independent contractor, representative, agent, 11 or employee who has agreed to such an interview, relating in any way to any 12 conduct subject to this Final Order. The person interviewed may have counsel 13 present. 14 Provided however, that nothing in this Final Order shall limit the 15 Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of 16 the FTC Act, 15 U.S.C. §§ 49, 57b-1, to obtain any documentary material, tangible 17 things, testimony, or information relevant to unfair or deceptive acts or practices in 18 or affecting commerce (within the meaning of 15 U.S.C. § 45(a)(1)) VII. Compliance Reporting 19 20 21 22 23 24 IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Final Order may be monitored: A. For a period of five (5) years from the date of entry of this Final Order, 1. Each Individual Defendant shall notify the Commission of the 25 following: 26 a. Any changes in such Defendant’s residence, mailing 27 addresses, and telephone numbers, within ten (10) days 28 of the date of such change; Page 11 b. 1 Any changes in such Defendant’s employment status 2 (including self-employment), and any change in such 3 Defendant’s ownership in any business entity, within ten 4 (10) days of the date of such change. Such notice shall 5 include the name and address of each business that such 6 Defendant is affiliated with, employed by, creates or 7 forms, or performs services for; a detailed description of 8 the nature of the business; and a detailed description of 9 such Defendant’s duties and responsibilities in connection with the business or employment; and 10 c. 11 aliases or fictitious names; 12 13 Any changes in such Defendant’s name or use of any 2. Defendant BurnLounge shall notify the Commission of any 14 changes in structure of Defendant BurnLounge or any business 15 entity that Defendant BurnLounge directly or indirectly 16 controls, or has an ownership interest in, that may affect 17 compliance obligations arising under this Final Order, including 18 but not limited to: incorporation or other organization; a 19 dissolution, assignment, sale, merger, or other action; the 20 creation or dissolution of a subsidiary, parent, or affiliate that 21 engages in any acts or practices subject to this Final Order; or a 22 change in the business name or address, at least thirty (30) days 23 prior to such change, provided that, with respect to any 24 proposed change in the business entity about which Defendant 25 BurnLounge learns less than thirty (30) days prior to the date 26 such action is to take place, Defendant BurnLounge shall notify 27 the Commission as soon as is practicable after obtaining such 28 knowledge. Page 12 1 B. One hundred eighty (180) days after the date of entry of this Final 2 Order and annually thereafter for a period of five (5) years, Defendants each shall 3 provide a written report to the FTC, which is true and accurate and sworn to under 4 penalty of perjury, setting forth in detail the manner and form in which they have 5 complied and are complying with this Final Order. This report shall include, but 6 not be limited to: 1. 7 For each Individual Defendant: a. 8 Such Defendant’s then-current residence address, mailing addresses, and telephone numbers; 9 b. 10 Such Defendant’s then-current employment status 11 (including self-employment), including the name, 12 addresses, and telephone numbers of each business that 13 such Defendant is affiliated with, employed by, or 14 performs services for; a detailed description of the nature 15 of the business; and a detailed description of such 16 Defendant’s duties and responsibilities in connection 17 with the business or employment; and c. 18 Any other changes required to be reported under Subsection A of this Section. 19 2. 20 For all Defendants: a. 21 A copy of each acknowledgment of receipt of this Final 22 Order, obtained pursuant to the Section titled 23 “Distribution of Order”; b. 24 Subsection A of this Section. 25 26 27 28 Any other changes required to be reported under C. Each Defendant shall notify the Commission of the filing of a bankruptcy petition by such Defendant within fifteen (15) days of filing. D. For the purposes of this Final Order, Defendants shall, unless Page 13 1 otherwise directed by the Commission’s authorized representatives, send by 2 overnight courier all reports and notifications required by this Final Order to the 3 Commission, to the following address: Associate Director for Enforcement Federal Trade Commission 600 Pennsylvania Avenue, N.W., Room NJ-2122 Washington, D.C. 20580 RE: FTC v. BurnLounge, Inc. 4 5 6 7 Provided that, in lieu of overnight courier, Defendants may send such reports 8 or notifications by first-class mail, but only if Defendants contemporaneously send 9 an electronic version of such report or notification to the Commission at: 10 11 DEBrief@ftc.gov. E. For purposes of the compliance reporting and monitoring required by 12 this Final Order, the Commission is authorized to communicate directly with each 13 Defendant. VIII. Record Keeping Provisions 14 15 IT IS FURTHER ORDERED that, for a period of eight (8) years from the 16 date of entry of this Final Order, Defendants, in connection with advertising, 17 offering, marketing, promotion or sale of any multi-level marketing program or 18 business venture and their agents, employees, officers, corporations, and those 19 persons in active concert or participation with them who receive actual notice of 20 this Final Order by personal service or otherwise, are hereby restrained and 21 enjoined from failing to create and retain the following records: 22 23 24 A. Accounting records that reflect the cost of goods or services sold, revenues generated, and the disbursement of such revenues; B. Personnel records accurately reflecting: the name, address, and 25 telephone number of each person employed in any capacity by such business, 26 including as an independent contractor; that person's job title or position; the date 27 upon which the person commenced work; and the date and reason for the person's 28 termination, if applicable; Page 14 1 C. Customer files containing the names, addresses, phone numbers, 2 dollar amounts paid, quantity of items or services purchased, and description of 3 items or services purchased, to the extent such information is obtained in the 4 ordinary course of business; 5 6 7 8 9 D. Complaints and refund requests (whether received directly, indirectly, or through any third party) and any responses to those complaints or requests; E. Copies of all sales scripts, training materials, advertisements, or other marketing materials; and F. All records and documents necessary to demonstrate full compliance 10 with each provision of this Final Order, including but not limited to, copies of 11 acknowledgments of receipt of this Final Order required by the Sections titled 12 “Distribution of Order” and “Acknowledgment of Receipt of Order” and all reports 13 submitted to the FTC pursuant to the Section titled “Compliance Reporting.” IX. Distribution of Order 14 15 IT IS FURTHER ORDERED that, for a period of five (5) years from the 16 date of entry of this Final Order, Defendants shall deliver copies of the Final Order 17 as directed below: 18 A. Defendant BurnLounge must deliver a copy of this Final Order to 19 (1) all of its principals, officers, directors, and managers; (2) all of its employees, 20 agents, and representatives who engage in conduct related to the subject matter of 21 the Final Order; and (3) any business entity resulting from any change in structure 22 set forth in Subsection A of the Section titled “Compliance Reporting.” For 23 current personnel, delivery shall be within five (5) days of service of this Final 24 Order upon Defendant BurnLounge. For new personnel, delivery shall occur prior 25 to them assuming their responsibilities. For any business entity resulting from any 26 change in structure set forth in Subsection A of the Section titled “Compliance 27 Reporting,” delivery shall be at least ten (10) days prior to the change in structure. 28 B. Individual Defendant as Control Person: For any business that an Page 15 1 Individual Defendant controls, directly or indirectly, or in which such Defendant 2 has a majority ownership interest, such Defendant must deliver a copy of this Final 3 Order to (1) all principals, officers, directors, and managers of that business; (2) all 4 employees, agents, and representatives of that business who engage in conduct 5 related to the subject matter of the Final Order; and (3) any business entity 6 resulting from any change in structure set forth in Subsection A.2 of the Section 7 titled “Compliance Reporting.” For current personnel, delivery shall be within five 8 (5) days of service of this Final Order upon such Defendant. For new personnel, 9 delivery shall occur prior to them assuming their responsibilities. For any business 10 entity resulting from any change in structure set forth in Subsection A.2 of the 11 Section titled “Compliance Reporting,” delivery shall be at least ten (10) days prior 12 to the change in structure. 13 C. Individual Defendant as employee or non-control person: For any 14 business where an Individual Defendant is not a controlling person of a business 15 but otherwise engages in conduct related to the subject matter of this Final Order, 16 such Defendant must deliver a copy of this Final Order to all principals and 17 managers of such business before engaging in such conduct. 18 D. Defendants must secure a signed and dated statement acknowledging 19 receipt of the Final Order, within thirty (30) days of delivery, from all persons 20 receiving a copy of the Final Order pursuant to this Section. X. Acknowledgment of Receipt of Order 21 IT IS FURTHER ORDERED that each Defendant, within five (5) 22 23 business days of receipt of this Final Order as entered by the Court, must submit to 24 the Commission a truthful sworn statement acknowledging receipt of this Final 25 Order. 26 27 28 XI. Independence of Obligations IT IS FURTHER ORDERED that each of the obligations imposed by this Final Order is independent of all other obligations under the Final Order, and Page 16 1 that the expiration of any requirements imposed by this Final Order shall not affect 2 any other obligation arising under this Final Order. XII. Costs and Attorneys Fees 3 IT IS FURTHER ORDERED that each party to this Final Order bear 4 5 its own costs and attorneys fees incurred in connection with this action. XIII. Continued Jurisdiction 6 7 IT IS FURTHER ORDERED that this Court shall retain jurisdiction 8 of this matter for purposes of construction, modification, and enforcement of this 9 Final Order. 10 11 Dated: 25th of July, 2011 12 ______________________________ Hon. George H. Wu United States District Judge 13 14 15 Submitted by: 16 17 18 19 20 21 _/s/Chris M. Couillou Chris M. Couillou, Esq. ccouillou@ftc.gov Counsel for the Plaintiff Federal Trade Commission 225 Peachtree Street, Suite 1500 Atlanta, GA 30303 (404) 656-1353 (voice) (404) 656-1379 (fax) 22 23 24 25 26 27 28 Page 17

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