United States District Court, D. Oregon, Medford Division
OPINION AND ORDER
D. CLARKE, United States Magistrate Judge
the Federal Trade Commission ("FTC"), brings claims
against more than thirty defendants, alleging claims under
section 5(a) and section 13(b) the Federal Trade Commission
Act, 15 U.S.C. §§ 45(a), 53(b), to obtain
preliminary and permanent injunctive relief, rescission or
reformation of contracts, restitution, the refund of monies
paid, disgorgement of ill-gotten monies and other equitable
relief. The FTC claims that the defendants, who are a large
number of corporate entities, groups, and individuals,
engaged in a nationwide campaign using misrepresentations to
solicit newspaper renewals and new subscriptions from
consumers. Most of the defendants claim that they operated a
legitimate and legal solicitation business.
case comes before the Court on a motion by defendants Dennis
Simpson and Reality Kats, Inc., (#152) for summary judgment.
Plaintiff FTC has responded by moving for relief under Rule
56(d), which allows the Court to defer ruling on a motion for
summary judgment, or to allow time to take discovery before
ruling. Plaintiffs motion (#153) is GRANTED. The Simpson
defendants' motion (#152) is premature and is hereby
deferred until after the time for factual discovery has
Federal Trade Commission brings claims against a large number
of corporate and individual defendants, alleging a complex
scheme to defraud consumers by sending mass mailings designed
to look like subscription notices. The FTC alleges that
defendants represented that they were authorized by, or
acting on behalf of, the publishers to obtain and renew
subscriptions, when they did not have such authorization,
causing consumers to experience delivery problems, delays, or
in some cases failing to receive the requested newspapers at
are corporate entities and groups from Oregon, Nevada, and
New York, as well as individuals, most of whom have been
owners or managers or employees of the various corporate
entities. The Complaint classifies the corporate defendants
into the following five categories: (1) Direct Mail
Marketing, (2) Receiving, (3) Processing and Clearing, (4)
Owners, and (5) Consultants. The majority of the defendants
claim that they operated a legitimate and legal business
soliciting magazine and newspaper subscriptions.
Simpson defendants, specifically, are alleged to have been
part of the common scheme by participating as consultants.
FTC alleges that the Simpson defendants have received more
than $15 million from other defendants since 2010.
judgment shall be granted when the record shows that there is
no genuine dispute as to any material of fact and that the
moving party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby Inc.,
477 U.S. 242, 247 (1986). The moving party has the initial
burden of showing that no genuine issue of material fact
exists. Celotex Corp. v. Catrett, 411 U.S. 317, 323
(1986); Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th
Cir. 2001) (en banc). The court cannot weigh the evidence or
determine the truth but may only determine whether there is a
genuine issue of fact. Playboy Enters., Inc. v.
Welles, 279 F.3d 796, 800 (9th Cir. 2002). An issue of
fact is genuine "if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party." Anderson, 411 U.S. at 248.
properly supported motion for summary judgment is made, the
burden shifts to the opposing party to set forth specific
facts showing that there is a genuine issue for trial.
Id. at 250. Conclusory allegations, unsupported by
factual material, are insufficient to defeat a motion for
summary judgment. Taylor v. List, 880 F.2d 1040,
1045 (9th Cir. 1989). Instead, the opposing party must, by
affidavit or as otherwise provided by Rule 56, designate
specific facts which show there is a genuine issue for trial.
Devereaux, 263 F.3d at 1076. In assessing whether a
party has met its burden, the court views the evidence in the
light most favorable to the non-moving party. Allen v.
City of Los Angeles, 66 F.3d 1052, 1056 (9th Cir. 1995).
"if a nonmovant shows by affidavit or declaration that,
for specified reasons, it cannot present facts essential to
justify its opposition, the court may: (1) defer considering
the motion, or deny it; (2) allow time to obtain affidavits
or declarations or to take discovery; or (3) issue any other
appropriate order." Fed.R.Civ.P. 56(d).
motion under Federal Rule of Civil Procedure 56(d) is
granted, and the Simpson defendants' motion for summary
judgment is deferred until after the close of discovery. A
party seeking relief under Rule 56(d) must show: "(1) it
has set forth in affidavit form the specific facts it hopes
to elicit from further discovery; (2) the facts sought exist;
and (3) the sought-after facts are essential to oppose
summary judgment." Family Home and Fin. Ctr., Inc.
v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th
Cir. 2008). The party seeking relief must "explain why
those facts would preclude summary judgment." Tatum
v. City & Cty. o/S.F, 441 F.3d 1090, 1100 (9th Cir.
2006). The party must also show that it "diligently
pursued its previous discovery opportunities, and ...
demonstrate that allowing additional discovery would . . .
preclude[ ] summary judgment." Bank of Am.,
NT&SA v. PENGWIN, 175 F.3d 1109, 1118 (9th Cir.
case, Plaintiff FTC has met the requirements for relief under
Rule 56(b). First, it has set forth the facts it hopes to
elicit from further discovery, including the details of the
allegedly deceptive newspaper subscription operation, the
interactions between the different defendants, and the
participation and responsibilities of each of them within the
scheme. Second, it has asserted that these facts exist. For
instance, the Simpson defendants contend that they were
authorized by newspaper publishers to market subscriptions.
Plaintiff, in response, contends that it has obtained
declarations from a number of newspapers stating that they
did not authorize such subscriptions. Plaintiff argues that
it should be able to continue to pursue other similar