Federal Trade Commission v. AWS, LLC et al

Filing 92

ORDER granting Stipulation for Qualified Turnover of Reserve Funds. Signed by Judge James C. Mahan on 9/12/2018. (Copies have been distributed pursuant to the NEF - JM)

Case 2:18-cv-00442-JCM-PAL Document 89 Filed 09/10/18 Page 1 of 4

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Michael F. Lynch (NV SBN 8555)
[e-mail]
LYNCH LAW PRACTICE, PLLC
3613 S. Eastern Ave.
Las Vegas, Nevada 89169
Telephone: [phone]
Facsimile: [phone]
Gary Owen Caris (CA SBN 088918)
[e-mail]
Admitted Pro Hac Vice dated March 27, 2018
BARNES & THORNBURG LLP
2029 Century Park East, Suite 300
Los Angeles, California 90067
Telephone: [phone]
Facsimile: [phone]

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Attorneys for Receiver
ROBB EVANS & ASSOCIATES LLC

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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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FEDERAL TRADE COMMISSION,

Case No. 2:18-cv-00442-JCM-PAL

Plaintiff,

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v.

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AWS, LLC, et al.,

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STIPULATED ORDER FOR QUALIFIED
TURNOVER OF RESERVE FUNDS
Defendants.

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The Federal Trade Commission (the “FTC”), the Court-Appointed Receiver Robb Evans

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& Associates LLC (the “Receiver”), Non-Party Synovus Bank (“Synovus”), and Non-Party

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Qualpay, Inc. (“Qualpay,” and collectively with Synovus, the “Acquirers”) stipulate to the entry

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of this Stipulated Order for Qualified Turnover of Reserve Funds to facilitate the resolution of

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competing claims to the reserve funds referenced in Section III, paragraph C, subsection 31 of the

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Court’s Stipulated Order for Permanent Injunction and Monetary Judgment (the “Stipulated

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Order”) [Doc. No. 80].

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B ARNES &
T HORNBURG LLP
ATTO RNEY S AT LAW
LOS A NG EL ES

Case 2:18-cv-00442-JCM-PAL Document 89 Filed 09/10/18 Page 2 of 4

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THEREFORE, IT IS ORDERED as follows:

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1.

The Acquirers currently hold $2,601,106.85 in reserve funds associated with

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payment card transactions initiated by cardholders doing business with Defendant FBA Stores

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LLC (the “Reserve Funds”). The FTC and the Receiver claim that such Reserve Funds are

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property of Defendant FBA Stores LLC and must be turned over to the Receiver pursuant to the

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Stipulated Order. The Acquirers, by contrast, claim that such Reserve Funds, as well as income

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therefrom, are not the property of the Defendants and that, in any event, the Acquirers are entitled

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to use those Reserve Funds to offset consumer-initiated chargebacks based on, inter alia,

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ownership of the Reserve Funds, their contract with Defendant FBA Stores, their security interest

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in the Reserve Funds, and the doctrine of recoupment.
2.

The FTC and the Receiver have agreed to promptly negotiate with the Acquirers in

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good faith regarding the proper disposition of the Reserve Funds, but only after a preliminary

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turnover of the Reserve Funds to the Receiver. At the same time, the FTC and the Receiver have

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agreed that such a turnover will not operate to prejudice or limit the rights, claims, or defenses of

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the Acquirers vis-à-vis the Reserve Funds, if any.

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3.

The Court therefore ORDERS the Acquirers to turn over the Reserve Funds to the

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Receiver, but finds that such a turnover will not impair, and is without prejudice to or limitation

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on, the Acquirers’ rights, claims, and defenses with respect to the Reserve Funds, and income

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therefrom, whether based on ownership of the Reserve Funds, the Acquirers’ contract with

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Defendant FBA Stores, any security interest in the Reserve Funds (and any perfection of that

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security interest that exists or existed prior to the turnover), the doctrine of recoupment, or

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otherwise.

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4.

The Receiver shall place the Reserve Funds on deposit in a separate interest-

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bearing receivership account. Unless otherwise ordered by the Court, such funds shall not be

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available to pay the expenses of the receivership estate. In the event the Receiver shall seek any

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disbursement of Reserve Funds or income therefrom, the Receiver shall give the Acquirers

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fourteen (14) days advance notice of such request and an opportunity to object. Should any

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B ARNES &
T HORNBURG LLP
ATTO RNEY S AT LAW
LOS A NG EL ES

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Case 2:18-cv-00442-JCM-PAL Document 89 Filed 09/10/18 Page 3 of 4

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objection be filed with the Court, the Receiver shall not make such disbursement until the Court

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resolves Acquirer(s)’ objection

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SO ORDERED.

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Dated: September 12, 2018.

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JAMES C. MAHAN
UNITED STATES DISTRICT JUDGE

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B ARNES &
T HORNBURG LLP
ATTO RNEY S AT LAW
LOS A NG EL ES

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Case 2:18-cv-00442-JCM-PAL Document 89 Filed 09/10/18 Page 4 of 4

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CERTIFICATE OF SERVICE

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STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I am employed in the County of Los Angeles, State of California. I am over the age of 18
and not a party to the within action; my business address is: 2029 Century Park East, Suite 300,
Los Angeles, CA 90067. On September 10, 2018, I served the foregoing document(s) described
as: STIPULATED ORDER FOR QUALIFIED TURNOVER OF RESERVE FUNDS on the
interested party(ies) below, using the following means:

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All parties identified for Notice of Electronic Filing generated
by the Court’s CM/ECF system under the referenced case
caption and number

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BY ELECTRONIC MAIL. I caused the document(s) to be sent to the respective e-mail
address(es) of the party(ies) as stated above. I did not receive, within a reasonable time after the
transmission, any electronic message or other indication that the transmission was unsuccessful.

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
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

Edward A. Marshall, [e-mail]
Steven Kaufmann, [e-mail]
Theresa Kananen, [e-mail]

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I declare that I am employed in the office of a member of the bar of this court at whose
direction the service was made.

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Executed on September 10, 2018 at Los Angeles, California.

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/s/ Stephanie L. Moore
Stephanie L. Moore

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13260096v1

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B ARNES &
T HORNBURG LLP
ATTO RNEY S AT LAW
LOS A NG EL ES

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