Federal Trade Commission v. Discountmetalbrokers, Inc. et al, No. 2:2016cv02112 - Document 92 (C.D. Cal. 2017)
Court Description: ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT 73 by Judge Otis D. Wright, II. The Court GRANTS Plaintiff Federal Trade Commission's Motion for Summary Judgment 73 . See document for details. (smo)
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Federal Trade Commission v. Discountmetalbrokers, Inc. et al Doc. 92 O 1 2 3 4 5 6 7 United States District Court Central District of California 8 9 10 11 FEDERAL TRADE COMMISSION, Plaintiff, 12 v. 13 14 15 DISCOUNTMETALBROKERS, INC., et al., Defendants. Case 2:16-cv-2112-ODW(JC) ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [73] 16 I. 17 INTRODUCTION 18 Plaintiff Federal Trade Commission (“FTC”) alleges that Donald Dayer and 19 Katherina Dayer violated Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the 20 Mail, Internet, or Telephone Order Merchandise Rule (“Merchandise Rule”), 16 21 C.F.R. Part 435 22 distributed advertisements which contained misrepresentations, failed to ship 23 merchandise in the required time frame, and failed to offer consumers remedial 24 measures upon nonreceipt of their merchandise. (Id.) Before the Court is the FTC’s 25 unopposed Motion for Summary Judgment. (Mot., ECF No. 73.) For the reasons 26 discussed below, the Court GRANTS the Motion. 27 /// (Compl. ¶ 1, ECF No. 1.) Plaintiff alleges that Defendants 28 Dockets.Justia.com 1 II. FACTUAL BACKGROUND 2 Between 2008 and 2014, Defendant DiscountMetalBrokers, Inc., f/k/a Discount 3 Gold Brokers, Inc., Discount Metal Brokers, Inc. d/b/a Discount Gold Brokers, and 4 North American Discount Gold.com (“DGB”), sold gold and silver to customers 5 throughout the United States. 6 Conclusions of Law (“SUF”) ¶¶ 8–10, 32, 33, 55, ECF No. 74.) During this time, 7 Defendant Donald Lee Dayer (“Mr. Dayer”) represented on various business and legal 8 documents that he served a myriad of positions in DGB, including President, 9 Secretary, CEO, Vice-President, and officer. (SUF ¶¶ 15, 93, 113, 117, 175, 176.) 10 Similarly, Defendant Katherina Dayer (“Mrs. Dayer”) also represented on various 11 documents that she held a number of positions at DGB, including President, Secretary, 12 and officer. (SUF ¶¶ 18, 92, 102, 104.) Around January 2012, Defendant Michael 13 Berman (“Berman”), a close friend of Mr. Dayer, served as DGB’s Chief Financial 14 Officer. (SUF ¶¶ 94, 222.) (FTC’s Statement of Uncontroverted Facts & 15 In 2008, Mr. Dayer and Mrs. Dayer (collectively, “the Dayers”) registered 16 DGB’s online website with Go Daddy and listed their personal phone number as well 17 as their personal email address on the website as DGB’s contact information. (SUF ¶¶ 18 97–101.) In 2009 and 2010, Mrs. Dayer created multiple buyer accounts on behalf of 19 DGB with various precious metals sellers. (SUF ¶¶ 102–106.) Mr. Dayer signed 20 numerous contracts and agreements on behalf of DGB, including multiple office space 21 leases. (SUF ¶¶ 109–16.) In 2009, Mrs. Dayer opened a Citibank account on behalf 22 of DGB and gave Mr. Dayer signing authority to that account—which he utilized 23 often. (SUF ¶¶ 120–24.) After Mrs. Dayer opened the Citibank account, Mr. Dayer 24 also opened Wells Fargo and US Bank accounts on behalf of DGB. (SUF ¶¶ 127–37.) 25 Defendant Michael Berman was granted access to the Wells Fargo bank account and 26 Berman later opened and controlled an additional Wells Fargo on behalf of DGB. 27 (SUF ¶¶ 130, 132.) On numerous occasions, the Dayers wrote checks to themselves, 28 to each other, to another business they owned, or to Michael Berman from one or all 2 1 of the DGB bank accounts. (SUF ¶¶ 139–44.) During the course of DGB’s 2 operations, Mrs. Dayer would often sign checks and other official documents at the 3 request of Berman without questioning the amounts. (SUF ¶¶ 226–27.) Mrs. Dayer 4 testified that she was aware that Berman had “issues” from apast business and that 5 those issues were the reason Berman did not sign these documents himself. (SUF ¶ 6 225.) 7 DGB marketed their gold and silver via television advertisements, radio 8 advertisements, and online platforms. (SUF ¶¶ 40, 44, 46.) The Dayers had virtually 9 complete control over DGB’s marketing and advertisement material, which included 10 creating the content and appearance of the advertisements. (SUF ¶¶ 159–83.) Mr. 11 Dayer worked on the graphics, script, and production of DGB’s advertisements. (SUF 12 ¶ 166.) DGB’s advertisements ran on a number of networks and stations, including 13 Fox News Network, Turner Broadcasting System, and various radio programs. (SUF 14 ¶¶ 10, 44, 46.) DGB’s television advertisements promised its viewers the sale of gold 15 or silver at “zero percent above dealer cost” with “zero commissions, fees, or 16 expenses.” (SUF ¶¶ 47–49.) The DGB advertisements claimed “Discount Gold 17 Brokers is making your dream a reality.” (SUF ¶ 53.) The advertisements also urged 18 viewers and listeners to place an order for DGB’s merchandise by calling the phone 19 number listed in the advertisements or by going online to the DGB website. (SUF ¶ 20 54.) 21 shipment time nor did it warn consumers about possible shipment delays. (SUF ¶¶ 22 57–58.) DGB’s advertisements did not include information regarding the expected 23 When a consumer would contact DGB to place an order, they were first asked 24 to pay a deposit. (SUF ¶ 59.) After the consumer payed the initial deposit, DGB 25 required the consumer to send the remaining balance owed by wire or check to a DGB 26 bank account. (SUF ¶ 62.) Next, DGB sent the consumers who paid the full balance 27 a confirmation email which instructed them to “allow a minimum of 2–4 weeks for 28 delivery of [their] product upon the clearing of [their] funds.” (SUF ¶ 65.) A similar 3 1 wait time estimate was also indicated on DGB’s website. (SUF ¶ 69.) In a number of 2 instances, DGB either shipped the products after more than thirty days or completely 3 failed to ship the products at all. (SUF ¶¶ 70, 87–89.) When shipments were not 4 received thirty days after an order was placed, DGB did not automatically issue a 5 refund, provide consumers the opportunity to consent to shipment delay, or offer 6 consumers the option to cancel their orders. (SUF ¶¶ 71–73.) 7 Numerous consumers called DGB to inquire about the status of their orders. 8 (SUF ¶ 74.) In response, DBG told consumers that their gold or silver would “ship 9 soon,” but did not provide a definitive deadline or shipping date. (SUF ¶¶ 74–76.) 10 Although many consumers demanded refunds due to the shipment delays, DGB 11 refused to issue any such refunds. (See SUF ¶¶ 70, 81.) Consumers also filed 12 complaints with a multitude of governmental agencies including the Better Business 13 Bureau, local law enforcement, state attorneys general, and the Federal Trade 14 Commission. (SUF ¶¶ 82–86.) Only in a few instances did DGB eventually fulfill 15 customer orders or process refunds. (See SUF ¶ 87.) 16 Many consumers lost great sums of money when DGB failed to ship their goods 17 or issue a refund. (SUF ¶ 242.) Further, the Dayers did not maintain accurate records 18 of DGB’s business dealings. (SUF ¶¶ 240–41.) From 2012 to 2014, DGB received an 19 estimated $39,270,295.52 from customers and paid an estimated $32,743,735.56 to 20 third-party precious metals suppliers. (SUF ¶¶ 246, 248.) 21 On March 8, 2016, Plaintiff filed this action, seeking equitable relief and a 22 permanent injunction pursuant to Section 13(b) of the Federal Trade Commission Act 23 (“FTC Act”), 15 U.S.C. § 53(b), for violations of Section 5(a) of the FTC Act, 15 24 U.S.C. § 45(a), and the Mail, Internet, or Telephone Order Merchandise Rule 25 (“Merchandise Rule”), 16 C.F.R. Part 435. (Compl. ¶ 1, ECF No. 1.) Plaintiff has 26 moved for summary judgment against Defendants Donald Dayer and Katherina Dayer 27 on all counts. (ECF No. 73.) That Motion is now before the Court for consideration. 28 /// 4 III. 1 LEGAL STANDARD 2 A court “shall grant summary judgment if the movant shows that there is no 3 genuine dispute as to any material fact and the movant is entitled to judgment as a 4 matter of law.” Fed. R. Civ. P. 56(a). Courts must view the facts and draw reasonable 5 inferences in the light most favorable to the nonmoving party. Scott v. Harris, 550 6 U.S. 372, 378 (2007). A disputed fact is “material” where the resolution of that fact 7 might affect the outcome of the suit under the governing law, and the dispute is 8 “genuine” where “the evidence is such that a reasonable jury could return a verdict for 9 the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 10 Conclusory or speculative testimony in affidavits is insufficient to raise genuine issues 11 of fact and defeat summary judgment. Thornhill Publ’g Co. v. Gen. Tel. & Elec. 12 Corp., 594 F.2d 730, 738 (9th Cir. 1979). Moreover, though the court may not weigh 13 conflicting evidence or make credibility determinations, there must be more than a 14 mere scintilla of contradictory evidence to survive summary judgment. Addisu v. 15 Fred Meyer, 198 F.3d 1130, 1134 (9th Cir. 2000). Where the moving and nonmoving 16 parties’ versions of events differ “courts are required to view the facts and draw 17 reasonable inferences ‘in the light most favorable to the nonmoving party.’” Scott, 18 550 U.S. at 378 (quoting Saucier v. Katz, 533 U.S. 194 201 (2001)). 19 IV. DISCUSSION 20 Plaintiff’s Motion raises the following issues: (1) whether DGB violated 21 Section 5(a) of the FTC Act, 15 U.S.C. § 45(a); (2) whether DGB violated the Mail, 22 Internet, or Telephone Order Merchandise Rule (“Merchandise Rule”), 16 C.F.R. Part 23 435; (3) whether the Dayers are personally liable for DGB’s violations; (4) whether 24 the Court may grant an injunction pursuant to Section 13(b) of the FTC Act, 15 U.S.C. 25 § 53(b); and (5) whether the amount of monetary relief proposed by the FTC is an 26 appropriate measure of restitution. 27 /// 28 /// 5 1 A. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a) 2 Section 5(a) of the FTC Act makes it unlawful to engage in “[u]nfair methods 3 of competition in or affecting commerce, and unfair or deceptive acts or practices in 4 or affecting commerce.” 15 U.S.C. § 45(a)(1). In order to establish that a defendant 5 engaged in deceptive acts, Plaintiff must demonstrate: (1) that “there is a 6 representation, omission, or practice”; (2) which “is likely to mislead consumers 7 acting reasonably under the circumstances”; and (3) that “the representation, omission, 8 or practice is material.” F.T.C. v. Stefanchik, 559 F.3d 924, 928 (9th Cir. 2009). An 9 advertisement may be found deceptive based on a representation which is explicit or 10 conveyed through the advertisement’s “net impression.” F.T.C. v. Cyberspace.Com 11 LLC, 453 F.3d 1196, 1200 (9th Cir. 2006). 12 First, it is undisputed that DGB’s various advertisements did not mention the 13 potential nonreceipt of goods or shipping delays. While DGB’s television and radio 14 advertisements never made any explicit representations regarding estimated shipping 15 times, by not disclosing critical details regarding shipment times, DGB created the 16 impression that consumers would, at the very least, receive the goods they paid for. 17 The DGB advertisements created the “net impression” that if a consumer placed an 18 order and then paid for the gold or silver, they would receive their goods in a timely 19 manner. See Cyberspace.Com, 453 F.3d at 1200. 20 Second, a representation is likely to mislead consumers when the advertisement 21 is either false or the advertiser lacked a reasonable basis for the claim. See F.T.C. v. 22 Pantron I Corp., 33 F.3d 1088, 1096 (9th Cir. 1994); see also F.T.C. v. John Beck 23 Amazing Profits, LLC, 865 F. Supp. 2d 1052, 1067 (C.D. Cal. 2012). In making the 24 determination of whether there was a reasonable basis for a defendant’s 25 representation, the court “must first determine what level of substantiation the 26 advertiser [was] required to have for [its] advertising claims. Then, the [court] must 27 determine whether the advertiser possessed that level of substantiation.” Pantron I, 33 28 F.3d at 1096. 6 1 Here, DGB lacked a reasonable basis for their advertisements’ representations 2 that goods would be delivered upon receipt of payment. In order to substantiate the 3 representation that goods would be delivered to consumers, let alone in a timely 4 manner, DGB needed to be in possession of information that suggested it could fulfill 5 those orders. Moreover, if DGB possessed information which indicated their inability 6 or unlikeness to deliver the goods, then it would not be able to substantiate the 7 advertisements’ representations. 8 deficiencies at the time the advertisements aired, DGB could not have substantiated a 9 reasonable basis for the advertisements’ representations on shipping and delivery. Because DGB had knowledge of the delivery 10 Lastly, an advertisement’s misleading impression is material “if it involves 11 information that is important to consumers and, hence, likely to affect their choice of, 12 or conduct regarding, a product.” Cyberspace.Com LLC, 453 F.3d at 1201 (citing 13 Matter of Cliffdale Assocs., Inc., 103 F.T.C. 110, 165 (1984)). 14 representation that ordered goods would be delivered was material. It is not practical 15 to suggest that any consumer would purchase an item or good without finding delivery 16 of said item material to their decision to purchase. Information that goods may never 17 be delivered is important information to consumers. Surely, if consumers were aware 18 that there was a likelihood, that the goods they paid for would never come, they would 19 not have engaged in business with DGB. Furthermore, it can be inferred that a 20 prolonged delay of the shipment of goods was also material to consumers, especially 21 given that many consumers were paying great sums of money for the merchandise. Here, DGB’s 22 Based on the uncontroverted facts, Defendants’ misrepresentations violated 23 Section 5(a) of the FTC Act; therefore, the Court GRANTS summary judgment on 24 Plaintiff’s FTC Act claim. 25 /// 26 /// 27 /// 28 /// 7 1 B. The Mail, Internet, or Telephone Order Merchandise Rule, 16 C.F.R. Part 2 435 (“The Merchandise Rule”) 3 The Merchandise Rule1 states that when a seller solicits consumers to purchase 4 their goods for sale via mail, internet, or telephone, they must have a reasonable basis 5 to believe that any order will ship either: “within that time clearly and conspicuously 6 stated in any such solicitation; or if no time is clearly and conspicuously stated, within 7 thirty (30) days after receipt of a properly completed order from the buyer.” 16 C.F.R. 8 § 435.2(a)(1). 9 Furthermore, when a seller is unable to comply with the shipping requirements 10 of the Merchandise Rule, they must offer the buyer an opportunity to either receive a 11 refund or consent to further delay. 16 C.F.R. § 435.2(b)(1). When a seller has failed 12 to maintain “records or other documentary proof establishing its use of systems and 13 procedures which assure the shipment of merchandise” in compliance with 14 Merchandise Rule, there is a “rebuttable presumption that the seller lacked a 15 reasonable basis for any expectation of shipment within said applicable time.” 16 16 C.F.R. § 435.2(a)(4). A rebuttable presumption is also created when the seller has 17 failed to maintain records establishing any offers of refunds or consumers’ consent to 18 further delay in the event they are unable to ship in a timely manner. 16 C.F.R. § 19 435.2(d). Here, DGB lacked a reasonable basis to believe that orders would ship within 20 21 the guidelines provided by the Merchandise Rule. 22 consumers’ orders no later than thirty days after orders were completed. See 16 23 C.F.R. § 435.2(a)(1). Because DGB did not “clearly and conspicuously” state a 24 shipping time frame in their advertisements, the Merchandise Rule required shipment 25 of completed orders within thirty days. See id. On numerous occasions, DGB failed 26 to ship items within thirty days—if at all. Thus, DGB failed to meet the time allotted 27 by both the Merchandise Rule as well as time estimates indicated in their email 28 1 16 C.F.R. Part 435. 8 DGB was required to ship 1 confirmations. Moreover, DGB’s failure to maintain adequate shipping records 2 creates a rebuttable presumption that DGB lacked a reasonable basis to believe they 3 could ship goods within the guidelines provided by the Merchandise Rule. 4 Further, DGB failed to offer consumers an opportunity to either receive a 5 refund or consent to further delay. DGB refused to provide refunds on numerous 6 occasions despite many consumers demanding their money back. DGB issued some 7 refunds only after several consumers complained to governmental agencies. DGB’s 8 lack of record keeping in regard to consumers’ refunds or consumers’ consent to 9 further delays creates another rebuttable presumption that DGB lacked a reasonable 10 basis to expect that the goods would be shipped in compliance with the Merchandise 11 Rule. 12 Because DGB did not oppose this Motion, the Court presumes DGB lacked a 13 reasonable basis for an expectation of shipment pursuant to the guidelines provided in 14 the Merchandise Rule. Therefore, the Court GRANTS summary judgment on FTC’s 15 Merchandise Rule claims. 16 C. Individual Liability for Corporate Violations 17 Personal liability for injunctive relief based on corporate violations of the FTC 18 Act may be found where: “(1) the corporation committed misrepresentations of a kind 19 usually relied on by a reasonably prudent person and resulted in consumer injury, and 20 (2) individuals participated directly in the violations or had authority to control the 21 entities.” F.T.C. v. Grant Connect, LLC, 763 F.3d 1094, 1101 (9th Cir. 2014). In 22 order to hold an individual personally liable for equitable monetary restitution, the 23 FTC must also establish that the individual possessed knowledge of the corporation’s 24 bad acts. See Grant Connect, LLC, 763 F.3d at 1101. 25 First, DGB’s advertisements created the implicit representation that products 26 would be delivered. A reasonably prudent person would rely on such a representation. 27 As a result, many consumers were injured by DGB’s misrepresentations because they 28 paid for goods they never received. Second, an individual’s active involvement in 9 1 business affairs or operations (including serving as a corporate officer) may establish 2 that the individual directly participated in the violations or had authority to control the 3 entities. See F.T.C. v. Publ'g Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir. 4 1997)2; see also F.T.C. v. Amy Travel Serv., Inc., 875 F.2d 564, 573 (7th Cir. 1989). 5 Here, the Dayers were actively involved in DGB’s deceptive acts. Donald Dayer 6 played a critical role in creating the content and appearance of the various 7 advertisements that DGB placed on news networks and radio programs. 8 requested, Mrs. Dayer assisted Mr. Dayer in coordinating with the various networks 9 that aired the advertisements created by Mr. Dayer. Furthermore, the Dayers had 10 authority to control DGB, because they were both corporate officers, signed binding 11 legal documents on behalf of DGB, created accounts with various precious metals 12 suppliers, and maintained control of corporate funds. When 13 Lastly, the Dayers possessed the requisite knowledge to be found personally 14 liable for equitable monetary relief. The Dayers’ conduct demonstrates that they both 15 were “recklessly indifferent to the truth or falsity of the misrepresentation.” See 16 Stefanchik, 559 F.3d at 931.3 The Dayers placed a great deal of trust in Michael 17 Berman, despite their knowledge that Berman had “issues” regarding his past business 18 endeavors. The Dayers knew about consumer complaints regarding shipping, but 19 continued to rely on Berman to handle daily business operations. The Dayers’ blind 20 trust in Berman (who possessed a central role in DGB’s daily business operations) 21 demonstrates the requisite level of reckless indifference to establish liability. See 22 Publ’g Clearing House, 104 F.3d at 1171 (the defendant was found to be recklessly 23 24 25 26 27 28 2 In determining whether the corporate-officer defendant may be held personally liable for corporate actions, the court noted that the defendant’s “assumption of the role of president of [the corporation] and her authority to sign documents on behalf of the corporation demonstrate[d] that she had the requisite control over the corporation.” Publ’g Clearing House, Inc., 104 F.3d at 1170 (9th Cir. 1997). 3 The Court found that the defendant was recklessly indifferent when he had the authority to control the marketing and representations about his product. Stefanchik, 559 F.3d at 931. 10 1 indifferent when she filed a business license at the direction of someone she knew 2 faced issues with the law). 3 DGB’s advertisements created the implicit representation that products would 4 be delivered, and a reasonably prudent person would rely on such a representation. 5 Further, the Dayers participated directly in the violations and had authority to control 6 DGB. Therefore, it is appropriate to impose personal liability on Defendants Donald 7 and Katherina Dayer for the acts of DGB. 8 D. Permanent Injunction 9 The FTC seeks a permanent injunction against the Dayers to enjoin them from 10 marketing any investment opportunities to consumers and from violating the FTC Act 11 and the Merchandise Rule in the future. Section 13(b) of the FTC Act provides the 12 following: “Whenever the [FTC] has reason to believe ... that any person ... is violating ... any provision of law enforced by the Federal Trade Commission, and ... that the enjoining thereof ... would be in the interest of the public—the Commission ... may bring suit in a district court of the United States to enjoin any such act or practice.” 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 15 U.S.C. § 53(b). Section 13(b) grants courts the authority to issue a permanent injunction upon the FTC’s showing of proper proof. Id. Furthermore, “[section 13(b)] has been interpreted to authorize [a court] to permanently enjoin defendants from violating the FTC Act if there is some cognizable danger of recurring violation.” F.T.C. v. Gill, 71 F. Supp. 2d 1030, 1047 (C.D. Cal. 1999). In determining the likelihood of recurring violations, the court may consider past unlawful conduct as well as the “totality of the circumstances”. Id. When the “violation has been predicated upon systematic wrongdoing, rather than isolated occurrences, a court should be more willing to enjoin future conduct.” Id. (quoting Commodity Futures Trading Comm'n v. Co Petro Mktg. Grp., Inc., 502 F. Supp. 806, 818 (C.D. Cal. 1980)). 28 11 1 Here, there is a danger that the Dayers will violate the FTC Act again. The 2 FTC has shown that the Dayers’ deceptions and other shady business practices 3 demonstrate a pattern of systematic wrongdoing, rather than mere isolated events. 4 The totality of events from 2012–2014 suggest that the Dayers voluntarily chose to 5 turn a blind eye toward the deficiencies of their business. The FTC has also shown 6 that the Dayers were reckless in regard to the oversight and management of their 7 business, and that such recklessness proved detrimental to countless consumers. 8 Therefore, the Court GRANTS the FTC’s permanent injunction enjoining 9 Katherina and Donald Dayer from marketing investments to consumers and from 10 further violating the FTC Act and the Merchandise Rule. The injunction does not 11 extend, however, to Plaintiff’s recommendation of mandatory compliance reporting to 12 the Commission. 13 E. Measure of Restitution 14 In calculating the measure of restitution to award under section 13(b), the Ninth 15 Circuit has adopted a two-step burden shifting framework. F.T.C. v. Commerce 16 Planet, Inc., 815 F.3d 593, 603 (9th Cir. 2016). First, “the FTC bears the burden of 17 proving that the amount it seeks in restitution reasonably approximates the defendant's 18 unjust gains.” Id. If the FTC meets their burden, “the burden then shifts to the 19 defendant to show that the FTC's figures overstate the amount of the defendant's 20 unjust gains.” Id. at 604. The focus of the calculation should not be on what the 21 consumer lost but, rather, the unjust gains made by the defendant. See id. at 603. 22 Often times, courts determining restitution stemming from violations of the 23 FTC Act have awarded “the full amount of funds lost by consumers…” F.T.C. v. 24 Inc21.com Corp., 745 F.Supp.2d 975, 1011 (N.D. Cal. 2010). It is possible for 25 restitution to exceed the defendant’s unjust enrichment. 26 FTC…is not required to prove that every individual consumer was injured to satisfy 27 such an award.” Id. The FTC need only demonstrate that “misrepresentations were 28 widely disseminated…and caused actual 12 Id. consumer Moreover, “[t]he injury.” Id. 1 Here, the FTC proposes that the Court adopt their calculation by measuring the 2 difference between DGB’s incoming payments from consumers (less returns, 3 chargebacks, and refunds) and outgoing payments from DGB to precious metal 4 suppliers. According to the FTC, the aforementioned calculation approximates that 5 DGB received $6,526,559.96 in unjust gains between 2012 and 2014. (Mot. p. 20; 6 George Decl. ¶ 10.) The FTC argues that there is no other way to reasonably ascertain 7 the proper measure of unjust gains because of the Dayers’ lack of recordkeeping. 8 Furthermore, the FTC has established that DGB’s misleading advertisements were 9 widely disseminated across various media platforms. 10 The Court finds that the FTC’s calculation is reasonable, in light of the Dayers’ 11 reckless indifference to the record keeping, oversight, and management of DGB. 12 Because this Motion is unopposed, Defendants have failed to meet their burden of 13 establishing that the figure presented by the FTC overstates the amount of unjust 14 gains. Therefore, $6,526,559.00 is an appropriate measure of restitution in this case. V. 15 16 17 CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiff Federal Trade Commission’s Motion for Summary Judgment. 18 19 IT IS SO ORDERED. 20 21 October 4, 2017 22 23 24 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 25 26 27 28 13
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