Federal Trade Commission v. Wordsmart Corporation et al, No. 3:2014cv02348 - Document 5 (S.D. Cal. 2014)
Court Description: Order Granting 3 Stipulated Final Judgment and Order for Permanent Injunction and Monetary judgment. Judgment in the amount of Eighteen Million Seven Hundred Thousand Dollars ($18,700,000.00) is entered in favor of the Commission against the Individual Defendant and the Corporate Defendant, each jointly and severally, as equitable monetary relief. Signed by Judge Anthony J. Battaglia on 10/6/14. (Modified to indicate judgment amount information, NEF regenerated on 10/7/2014)(cge)(jrd)
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Federal Trade Commission v. Wordsmart Corporation et al Doc. 5 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 FEDERAL TRADE COMMISSION, 13 14 v. Plaintiff, WORD SMART CORPORATION, a 15 California corporation also doing business as WS LEARNING 16 CENTER; DAVID A. KAY, individually and as the President and 17 CEO of WORDSMART CORPORATION, 18 Defendant. 19 20 21 22 23 24 25 26 27 28 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No.14cv2348 AJB (RBB) ORDER GRANTING STIPULATED FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT Plaintiff, the Federal Trade Commission ("Commission" or "FTC"), filed a Complaint for Permanent Injunction and Other Equitable Relief ("Complaint") pursuant to Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and the Telemarketing and Consumer Fraud and Abuse Prevention Action ("Telemarketing Act"), 15 U.S.C. §§ 6101-6108, as amended, to obtain temporary, preliminary, and permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other relief for Defendants' deceptive and abusive practices in marketing goods and services to 1 14cv2348 Dockets.Justia.com 1 consumers throughout the United States in violation of Section 5(a) of the FTC Act, 15 2 U.S.C. § 45(a), and the FTC's "Telemarketing Sales Rule" ("TSR"), 16 C.F.R. Part 310. 3 The Commission and Defendants have agreed to the entry of this Stipulated Final 4 Judgment and Order for Permanent Injunction and Monetary Judgment ("Order") by this 5 Court to resolve all matters in dispute in this action between them. 6 NOW, THEREFORE, Plaintiff FTC and Defendants, through their respective 7 counsel, having filed a joint motion requesting the Court to enter this Order. 8 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows: 9 I. FINDINGS 10 1. This Court has jurisdiction over this matter. 11 2. The Complaint alleges that Defendants participated in deceptive acts 12 or practices in violation of Section 5 of the FTC act, 15 U.S.C. § 45, and have initiated, or 13 caused others to initiate, numerous outbound telephone calls that violate the TSR, 16 14 C.F.R. Part 310. 15 3. Defendants neither admit nor deny any of the allegations in the 16 Complaint, except as specifically stated in this Order. Only for purposes of this action, 17 Defendants admit the facts necessary to establish jurisdiction. 18 4. Defendants waive any claim that they may have under the Equal 19 Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action 20 through the date of this Order, and agree to bear their own costs and attorney fees. 21 5. Defendants and the Commission waive all rights to appeal or other- 22 wise challenge or contest the validity of this Order. Defendants further waive and release 23 any claim they may have against the FTC or its employees, agents, and representatives 24 arising out of this action and under the terms of this Order. 25 6. Entry of this Order is in the public interest. 26 II. 27 For the purpose of this Order, the following definitions apply: DEFINITIONS 28 2 14cv2348 1 1. "Competent and Reliable Scientific Evidence" means tests, analyses, 2 research, or studies that have been conducted and evaluated in an objective manner by 3 qualified Persons, that are generally accepted in the profession to yield accurate and 4 reliable results, and that are sufficient in quality and quantity based on standards gener5 ally accepted in the relevant scientific fields, when considered in light of the entire body 6 of relevant and reliable scientific evidence, to substantiate that a representation is true. 7 2. "Corporate Defendant" means WordSmart Corporation, also d/b/a WS 8 Learning Center, and its successors and assigns. 9 3. "Defendant" or "Defendants" means the Individual Defendant and the 10 Corporate Defendant, individually, collectively, or in any combination. 11 4. "Established Business Relationship" means a relationship between a 12 seller and a Person based on: (a) the Person's purchase, rental, or lease of the seller's 13 goods or services or a financial transaction between the seller and Person, within the 14 eighteen months immediately preceding the date of the Telemarketing call; or (b) the 15 Person's inquiry or application regarding a good or service offered by the seller, within 16 the three months immediately preceding the date of a Telemarketing call. 17 5. "Individual Defendant" means David A. Kay. 18 6. "National Do Not Call Registry" means the "do-not-call" registry of 19 telephone numbers maintained by the Commission pursuant to 16 C.F.R. § 20 310.4(b)(1)(iii)(B). 21 7. "Outbound Telephone Call" means a telephone call initiated by a 22 Telemarketer to induce the purchase of goods or services or to solicit a charitable 23 contribution. 24 8. "Person" means a natural person, an organization or other legal entity, 25 including a corporation, partnership, sole proprietorship, limited liability company, 26 association, cooperative, or any other group or combination acting as an entity. 27 9. "Plaintiff" means the Federal Trade Commission. 28 3 14cv2348 1 10. "Representative" means Defendants' officers, agents, servants, 2 employees, attorneys, and all other Persons in active concert or participation with any of 3 them, who receives actual notice of this Order by personal service or otherwise. 4 11. "Telemarketer" means any Person who, in connection with 5 Telemarketing, initiates or receives telephone calls to or from a customer or donor. 6 12. "Telemarketing" means any plan, program, or campaign which is 7 conducted to induce the purchase of goods or services or a charitable contribution by use 8 of one or more telephones, and which involves a telephone call, whether or not covered 9 by the TSR. 10 ORDER 11 III. PROHIBITION AGAINST MISREPRESENTATIONS 12 IT IS ORDERED that Defendants and their Representatives, whether acting directly or 13 indirectly, in connection with the manufacturing, advertising, marketing, promotion, 14 offering for sale, sale, or distribution of any goods or services, are permanently restrained 15 and enjoined from: 16 A. Making, or assisting others in making, in any manner, expressly or by 17 implication, including through the use of a product name, endorsement, depiction, 18 trademark, or illustration, any representation about the benefits, performance, or efficacy 19 of any goods or services for teaching vocabulary or reading comprehension, or enhancing 20 language ability, cognitive ability, reading speed, income potential, test scores, college 21 options, or school performance, including, but not limited to, that: 22 1. Consumers who use Defendants' goods or services will learn faster; 23 2. Consumers who use Defendants' goods or services will score higher in 24 school and on tests; 25 3. Consumers who use Defendants' goods or services will learn words 4. Consumers who use Defendants' speed reading program will improve 26 faster; 27 28 their reading speed, while improving comprehension; 4 14cv2348 1 5. Consumers who use Defendants' goods or services will be able to 2 identify the meaning of any word they come across; 3 6. Consumers who use Defendants' goods or services will improve their 4 letter grades, SAT scores, ACT scores, GRE and GMAT scores, and IQ scores; or 5 7. Consumers who use Defendants' goods or services will perform better 6 in school, on standardized tests, or in other areas of life; 7 unless the representation is true, not misleading, and, at the time it is made, Defendants 8 possess and rely upon Competent and Reliable Scientific Evidence that substantiates the 9 representation; 10 B. Making, or assisting others in making, in any manner, expressly or by 11 implication, including through the use of a product name, endorsement, depiction, 12 trademark, or illustration, any representation not covered by Subsection A above about 13 the benefits, performance, or efficacy of any goods or services unless the representation is 14 true, not misleading, and, at the time it is made, Defendants possess and rely upon 15 competent and reliable evidence, which when appropriate must be Competent and 16 Reliable Scientific Evidence, that substantiates the representation; and 17 C. Misrepresenting, or assisting others in misrepresenting, in any manner, 18 expressly or by implication, including through the use of a product name, endorsement, 19 depiction, trademark, or illustration: 20 1. That the child or children of a consumer expressed an interest in 21 Defendants' goods or services; 22 2. That Defendants have an affiliation with the administrators of a 23 standardized test or a school attended by a consumer's child; 24 3. Any material aspect of the nature or terms of Defendants' refund, 25 cancellation, exchange, or repurchase policies, including but not limited to any 26 money-back policy or guarantee; or 27 4. Any other material fact concerning Defendants' goods or services, 28 including but not limited to the total costs; any material restrictions, limitations, or 5 14cv2348 1 conditions; or any material aspect of their benefits, performance, efficacy, nature, or 2 central characteristics. 3 IV. PROHIBITIONS REGARDING TELEMARKETING 4 IT IS FURTHER ORDERED that, in connection with Telemarketing, Defendants 5 and their Representatives, whether acting directly or indirectly, are permanently re6 strained and enjoined from engaging in, causing others to engage in, or assisting others 7 engaging in, any of the following practices: 8 A. Initiating any Outbound Telephone Call to any Person at a telephone number 9 on the National Do Not Call Registry, unless Defendants prove that: 10 1. Defendants have obtained the express agreement, in writing, of such 11 Person to place calls to that Person. Such written agreement shall clearly evidence such 12 Person's authorization that calls made by or on behalf of Defendants may be placed to 13 that Person, and shall include the telephone number to which the calls may be placed and 14 the signature of that Person; or 15 2. Defendants have an Established Business Relationship with such 16 Person, and that Person has not previously stated that he or she does not wish to receive 17 Outbound Telephone Calls made by or on behalf of Defendants; 18 B. Initiating any Outbound Telephone Call to a Person when that Person has 19 previously stated that he or she does not wish to receive an Outbound Telephone Call 20 made by or on behalf of Defendants; 21 C. Abandoning, or causing others to abandon, any Outbound Telephone Call to 22 a Person by failing to connect the call to a live operator within two seconds of the 23 Person's completed greeting, unless Defendants or their Representatives prove that the 24 following four conditions are met: 25 1. Defendants or their Representatives employ technology that ensures 26 abandonment of no more than three percent of all calls answered by a Person, measured 27 over the duration of a single calling campaign, if less than thirty days, or separately over 28 each successive 30-day period or portion thereof that the campaign continues; 6 14cv2348 1 2. Defendants or their Representatives, for each Telemarketing call 2 placed, allow the telephone to ring for at least fifteen seconds or four rings before 3 disconnecting an unanswered call; 4 3. Whenever a live operator is not available to speak with the Person 5 answering the call within two seconds after the Person's completed greeting, Defendants 6 or their Representatives promptly play a recorded message that states Defendants' name 7 and telephone number; and 8 4. Defendants or their Representatives retain records establishing 9 compliance with the preceding three conditions. 10 V. 11 IT IS FURTHER ORDERED that Defendants and their Representatives, whether PROHIBITION ON COLLECTING ON ACCOUNTS 12 acting directly or indirectly, are hereby restrained and enjoined from attempting to 13 collect, collecting, or assigning any right to collect payment from any consumer who 14 purchased or agreed to purchase any good or service from any Defendant prior to entry of 15 this Order. 16 VI. 17 IT IS FURTHER ORDERED that: 18 A. MONETARY JUDGMENT AND PARTIAL SUSPENSION Judgment in the amount of Eighteen Million Seven Hundred Thousand 19 Dollars ($18,700,000) is entered in favor of the Commission against the Individual 20 Defendant and the Corporate Defendant, each jointly and severally, as equitable monetary 21 relief. 22 B. Defendants are ordered to pay to the Commission One Hundred Forty-Seven 23 Thousand and Four Hundred Dollars ($147,400), which, as Defendants stipulate, their 24 undersigned counsel holds in escrow for no purpose other than payment to the Commis25 sion. Such payment must be made within 7 days of entry of this Order by electronic fund 26 transfer in accordance with instructions previously provided by a representative of the 27 Commission. Upon such payment, the remainder of the judgment is suspended, subject to 28 the Subsections below. 7 14cv2348 1 C. The Commission's agreement to the suspension of part of the judgment is 2 expressly premised upon the truthfulness, accuracy, and completeness of Defendants' 3 sworn financial statements and related documents (collectively, "financial representa4 tions") submitted to the Commission, namely: 5 1. The Financial Statement of Individual Defendant David A. Kay 6 signed on January 7, 2014, including the attachments; 7 2. The Financial Statement of Corporate Defendant WordSmart Corpora- 8 tion signed by David A. Kay, President of WordSmart Corporation on December 18, 9 2013, including the attachments; 10 3. The additional documentation submitted by e-mail from Defendants' 11 counsel Helen Mac Murray to Commission counsel Kathleen Daffan and Danielle 12 Estrada dated November 8, 2013, attaching Corporate Defendant WordSmart Corpora13 tion's Combined Financial Statements for the period ending December 31, 2012; 14 4. The documentation submitted by file transfer protocol (FTP) on 15 January 21, 2014, February 18, 2014, March 12, 2014, and April 1, 2014 from Defen16 dants' counsel Erica Sherrick to Commission counsel Kathleen Daffan and Danielle 17 Estrada; 18 5. The additional documentation submitted by e-mail from Defendants' 19 counsel Erica Sherrick to Commission counsel Kathleen Daffan and Danielle Estrada 20 dated March 4, 2014, March 11, 2014, March 13, 2014, March 21, 2014, March 26, 2014, 21 March 27, 2014, March 31, 2014, April 5, 2014, April 15, 2014, April 18, 2014, April 28, 22 2014, May 9, 2014, May 27, 2014, and May 28, 2014; and 23 6. The additional documentation submitted by e-mail from Defendants' 24 counsel Helen Mac Murray to Commission counsel Kathleen Daffan and Danielle 25 Estrada dated April 8, 2014, April 9, 2014, April 13, 2014, and May 22, 2014. 26 D. The suspension of the judgment will be lifted as to any Defendant if, upon 27 motion by the Commission, the Court finds that the Defendant failed to disclose any 28 8 14cv2348 1 material asset, materially misstated the value of any asset, or made any other material 2 misstatement or omission in the financial representations identified above. 3 E. If the suspension of the judgment is lifted, the judgment becomes immedi- 4 ately due as to that Defendant in the amount specified in Subsection A above, which the 5 parties stipulate only for purposes of this Section represents the consumer injury and 6 unjust enrichment alleged in the Complaint, less any payment previously made pursuant 7 to this Section, plus interest computed from the date of entry of this Order. 8 VII. ADDITIONAL MONETARY PROVISIONS 9 IT IS FURTHER ORDERED that: 10 A. Defendants relinquish dominion and all legal and equitable right, title, and 11 interest in all assets transferred pursuant to this Order and may not seek the return of any 12 assets. 13 B. The facts alleged in the Complaint will be taken as true, without further 14 proof, in any subsequent civil litigation by or on behalf of the Commission, including in a 15 proceeding to enforce its rights to any payment or monetary judgment pursuant to this 16 Order, such as a nondischargeability complaint in any bankruptcy case. 17 C. The facts alleged in the Complaint establish all elements necessary to sustain 18 an action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 19 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such 20 purposes. 21 D. Defendants acknowledge that their Taxpayer Identification Numbers (Social 22 Security Numbers or Employer Identification Numbers), which they previously submitted 23 to the Commission, may be used for collecting and reporting on any delinquent amount 24 arising out of this Order, in accordance with 31 U.S.C. § 7701. 25 E. All money paid to the Commission pursuant to this Order may be deposited 26 into a fund administered by the Commission or its designee to be used for equitable 27 relief, including consumer redress and any attendant expenses for the administration of 28 any redress fund. If a representative of the Commission decides that direct redress to 9 14cv2348 1 consumers is wholly or partially impracticable or money remains after redress is com2 pleted, the Commission may apply any remaining money for such other equitable relief 3 (including consumer information remedies) as it determines to be reasonably related to 4 Defendants' practices alleged in the Complaint. Any money not used for such equitable 5 relief is to be deposited to the U.S. Treasury as disgorgement. Defendants have no right 6 to challenge any actions the Commission or its representatives may take pursuant to this 7 Subsection. 8 F. If any Defendant is in default on any obligations under this Section, then the 9 judgment amount, minus any payments previously made pursuant to this Section, 10 becomes immediately due. A further ten-day grace period or other such concession 11 concerning default is unlikely to be warranted. 12 G. If any Defendant fails to pay fully the amount due at the time specified, 13 Defendants must cooperate fully with the Commission and their representatives in all 14 attempts to collect the judgment. In such an event, Defendants agree to provide federal 15 and state tax returns for the preceding 2 years, and to complete new financial disclosure 16 forms fully and accurately within 10 business days of receiving a request from the 17 Commission. Defendants further authorize the Commission to verify all information 18 provided on their financial disclosure forms with all appropriate third parties, including 19 financial institutions. 20 H. The Commission may request any tax-related information, including 21 amended tax returns and any other filings, that Defendants have the authority to release. 22 Within 14 days of receipt of a written request from a representative of the Commission, 23 Defendants must take all necessary steps (such as filing a completed IRS Form 4506 or 24 8821) to cause the Internal Revenue Service or other tax authority to provide the informa25 tion directly to the Commission. 26 VIII. CUSTOMER INFORMATION 27 IT IS FURTHER ORDERED that Defendants and their Representatives are 28 permanently restrained and enjoined from directly or indirectly: 10 14cv2348 1 A. Failing to provide sufficient customer information to enable the Commission 2 to efficiently administer consumer redress. If a representative of the Commission requests 3 in writing any information related to redress, Defendants must provide it, in the form 4 prescribed by the Commission, within 14 days; and 5 B. Disclosing, using, or benefitting from customer information, including the 6 name, address, telephone number, email address, social security number, other identify7 ing information, or any data that enables access to a customer's account (including a 8 credit card, bank account, or other financial account), that any Defendant obtained prior 9 to entry of this Order in connection with the manufacturing, advertising, marketing, 10 promotion, offering for sale, sale, or distribution of any of Defendants' goods or services. 11 IX. 12 IT IS FURTHER ORDERED that Defendants must fully cooperate with represen- COOPERATION 13 tatives of the Commission in this case and in any investigation related to or associated 14 with the transactions or the occurrences that are the subject of the Complaint. Defendants 15 must provide truthful and complete information, evidence, and testimony. Individual 16 Defendant must appear and Corporate Defendant must cause its officers, employees, 17 representatives, or agents to appear for interviews, discovery, hearings, trials, and any 18 other proceedings that a Commission representative may reasonably request upon 5 days 19 written notice, or other reasonable notice, at such places and times as a Commission 20 representative may designate, without the service of a subpoena. 21 X. 22 IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt ORDER ACKNOWLEDGMENTS 23 of this Order: 24 A. Each Defendant, within 7 days of entry of this Order, must submit to the 25 Commission an acknowledgment of receipt of this Order sworn under penalty of perjury. 26 B. For 15 years after entry of this Order, Individual Defendant, for any business 27 that he, individually or collectively with Defendant, is the majority owner or directly or 28 indirectly controls, and Corporate Defendant must each deliver a copy of this Order to: 11 14cv2348 1 (1) all principals, officers, directors, and LLC managers and members; (2) all employees, 2 agents, and representatives who participate in the conduct specified in Sections III-V; and 3 (3) any business entity resulting from any change in structure as set forth in the Section 4 titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order 5 for current personnel. For all others, delivery must occur before they assume their 6 responsibilities. 7 C. From each individual or entity to which a Defendant delivered a copy of this 8 Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment 9 of receipt of this Order. 10 XI. 11 IT IS FURTHER ORDERED that Defendants make timely submissions to the COMPLIANCE REPORTING 12 Commission: 13 A. One year after entry of this Order, each Defendant must submit a compliance 14 report, sworn under penalty of perjury: 15 1. Each Defendant must: (a) identify the primary physical, postal, and 16 email address and telephone number, as designated points of contact, which representa17 tives of the Commission may use to communicate with that Defendant; (b) identify all of 18 that Defendant's businesses by all of their names, telephone numbers, and physical, 19 postal, email, and Internet addresses; (c) describe the activities of each business, includ20 ing the goods and services offered, the means of manufacturing, advertising, marketing, 21 promotion, offering for sale, sale, and distribution, and the involvement of any other 22 Defendant (which Individual Defendant must describe if he knows or should know due to 23 his own involvement); (d) describe in detail whether and how that Defendant is in 24 compliance with each Section of this Order; and (e) provide a copy of each Order 25 Acknowledgment obtained pursuant to this Order, unless previously submitted to the 26 Commission. 27 2. Additionally, Individual Defendant must: (a) identify all telephone 28 numbers and all physical, postal, email and Internet addresses, including all residences; 12 14cv2348 1 (b) identify all business activities, including any business for which he performs services 2 whether as an employee or otherwise and any entity in which he has any ownership 3 interest; and (c) describe in detail his involvement in each such business, including title, 4 role, responsibilities, participation, authority, control, and any ownership. 5 B. For 15 years after entry of this Order, each Defendant must submit a 6 compliance notice, sworn under penalty of perjury, within 14 days of any change in the 7 following: 8 1. Each Defendant must report any change in: (a) any designated point 9 of contact; or (b) the structure of Corporate Defendant or any entity that Defendant has 10 any ownership interest in or controls directly or indirectly that may affect compliance 11 obligations arising under this Order, including: creation, merger, sale, or dissolution of 12 the entity or any subsidiary, parent, or affiliate that engages in any acts or practices 13 subject to this Order. 14 2. Additionally, Individual Defendant must report any change in: (a) 15 name, including aliases or fictitious name, or residence address; or (b) title or role in any 16 business activity, including any business for which he performs services whether as an 17 employee or otherwise and any entity in which he has any ownership interest, and 18 identify the name, physical address, and Internet address, if any, of the business or entity. 19 C. Each Defendant must submit to the Commission notice of the filing of any 20 bankruptcy petition, insolvency proceeding, or similar proceeding by or against such 21 Defendant within 14 days of its filing. 22 D. Any submission to the Commission required by this Order to be sworn under 23 penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as 24 by concluding: "I declare under penalty of perjury under the laws of the United States of 25 America that the foregoing is true and correct. Executed on: _____" and supplying the 26 date, signatory's full name, title (if applicable), and signature. 27 E. Unless otherwise directed by a Commission representative in writing, all 28 submissions to the Commission pursuant to this Order must be emailed to DE13 14cv2348 1 brief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: Associate 2 Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 3 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: 4 FTC v. WordSmart Corporation. 5 XII. RECORDKEEPING 6 IT IS FURTHER ORDERED that Defendants must create certain records for 15 7 years after entry of the Order, and retain each such record for 5 years. Specifically, 8 Corporate Defendant in connection with its Telemarketing and/or its manufacturing, 9 advertising, marketing, promotion, offering for sale, sale, or distribution of goods or 10 services; and Individual Defendant for any business in which he, individually or collec11 tively with any other Defendant, is a majority owner or directly or indirectly controls, 12 must create and retain the following records: 13 A. Accounting records showing the revenues from all goods or services sold; 14 B. Personnel records showing, for each Person providing services, whether as 15 an employee or otherwise, that Person's: name; addresses; telephone numbers; job title or 16 position; dates of service; and, if applicable, the reason for termination; 17 C. Records of all consumer complaints and refund requests, whether received 18 directly or indirectly, such as through a third party, and any response; 19 D. All records necessary to demonstrate full compliance with each provision of 20 this Order, including all submissions to the Commission; and 21 E. 22 XIII. COMPLIANCE MONITORING 23 IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants' A copy of each unique advertisement or other marketing material. 24 compliance with this Order, including the financial representations upon which part of 25 the judgment was suspended and any failure to transfer any assets as required by this 26 Order: 27 A. Within 14 days of receipt of a written request from a representative of the 28 Commission each Defendant must: submit additional compliance reports or other 14 14cv2348 1 requested information, which must be sworn under penalty of perjury; appear for 2 depositions; and produce documents for inspection and copying. The Commission is also 3 authorized to obtain discovery, without further leave of court, using any of the procedures 4 prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 5 31, 33, 34, 36, 45, and 69. 6 B. For matters concerning this Order, the Commission is authorized to 7 communicate directly with each Defendant. Defendants must permit representatives of 8 the Commission to interview any employee or other Person affiliated with any Defendant 9 who has agreed to such an interview. The Person interviewed may have counsel present. 10 C. The Commission may use all other lawful means, including posing, through 11 its representatives, as consumers, suppliers, or other individuals or entities, to Defendants 12 or any individual or entity affiliated with Defendants, without the necessity of identifica13 tion or prior notice. Nothing in this Order limits the Commission's lawful use of compul14 sory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1. 15 XIV. RETENTION OF JURISDICTION 16 IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for 17 purposes of construction, modification, and enforcement of this Order. 18 IT IS SO ORDERED. 19 20 DATED: October 6, 2014 21 22 Hon. Anthony J. Battaglia U.S. District Judge 23 24 25 26 27 28 15 14cv2348
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