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Federal Trade Commission v. 8 Figure Dream Lifestyle LLC

United States District Court, C.D. California

July 19, 2019

Federal Trade Commission, Plaintiff,
v.
8 Figure Dream Lifestyle LLC, et al., Defendants.

          PRELIMINARY INJUNCTION

          ANDREW J. GUILFORD, UNITED STATES DISTRICT JUDGE

         On June 12, 2019, Plaintiff, Federal Trade Commission, filed its Complaint for a Permanent Injunction and other Equitable Relief under 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 Act (“Telemarketing Act”), 15 U.S.C. §§ 6101-6108 (Docket No. 2). Under Fed.R.Civ.P. 65(b), the FTC also filed an ex parte application for a temporary restraining order, asset freeze, other equitable relief, and an order to show cause why a preliminary injunction should not issue against 8 Figure Dream Lifestyle LLC, JL Net Bargains Inc., Kappy Enterprises LLC, Millionaire Mind Enterprises LLC, OEA LLC (a/d/b/a Online Entrepreneur Academy, d/b/a 14 Day Champion Challenge, d/b/a 14 Day Challenge), Spirit Consulting Group Inc., John A. Bain, Alex Dee, Brian M. Kaplan, and Jerrold S. Maurer (a/k/a Jerry Maurer) (collectively “Defendants”). (Docket No. 3).

         The Court granted the application, issuing a temporary restraining order (“TRO”) on June 13, 2019, including an asset freeze, expedited discovery, and other equitable relief. (Docket Nos. 28 and 29). The Court ordered Defendants to appear at a hearing on June 24, 2019, to show cause why a preliminary injunction should not issue. On June 21, Defendants moved to continue the show cause hearing to July 8. (Docket No. 31). In response, the Court ordered the parties to appear for a status conference on June 24. (Docket No. 34). At the June 24 status conference, all parties informed the Court that they had stipulated to extend and abide by the TRO until a preliminary injunction hearing. (Docket No. 36). The Court subsequently rescheduled the preliminary injunction hearing for July 19, 2019. (Docket No. 36). Before that hearing, the FTC and Defendant OEA LLC (“OEA”) agreed to entry of a preliminary injunction for the duration of this litigation. The terms of the stipulated preliminary injunction are as follows:

         FINDINGS OF FACT

         A. This Court has jurisdiction over the subject matter of this case, and there is good cause to believe that it will have jurisdiction over all parties hereto and that venue in this district is proper.

         B. In order to avoid litigation and as part of the process to settle the action between the FTC and OEA, the FTC and OEA have agreed to entry of this Order.

         C. The relief granted by this Order is appropriate equitable relief permitted by the FTC Act and within the inherent equitable powers of the Court. See, e.g., FTC v. H.N. Singer, Inc., 668 F.2d 1107, 1110-13 (9th Cir. 1982) (holding that Section 13(b) of the FTC Act “provides a basis” for a preliminary injunction “freezing assets” and other equitable relief); FTC v. American Nat'l Cellular, Inc., 810 F.2d 1511, 15-12-14 (9th Cir. 1987) (upholding preliminary injunction including asset freeze and appointment of a receiver).

         D. Weighing the equities and considering the FTC's likelihood of ultimate success on the merits, a preliminary injunction with an asset freeze and other equitable relief is in the public interest.

         E. This Court has the authority to issue this Order pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b); Federal Rule of Civil Procedure 65; and the All Writs Act, 28 U.S.C. § 1651.

         F. The FTC is an independent agency of the United States and no security is required of any agency of the United States for the issuance of a preliminary injunction. Fed.R.Civ.P. 65(c).

         DEFINITIONS

         For the purpose of this Order, the following definitions shall apply:

         A. “8 Figure Dream Lifestyle Corporate Defendants” means 8 Figure Dream Lifestyle LLC; JL Net Bargains Inc.; Kappy Enterprises LLC; Millionaire Mind Enterprises LLC; and Spirit Consulting Group Inc. and each of their subsidiaries, affiliates, successors, and assigns.

         B. “8 Figure Dream Lifestyle Defendants” means the 8 Figure Dream Lifestyle Corporate and Individual Defendants, individually, collectively, or in any combination.

         C. “8 Figure Dream Lifestyle Individual Defendants” means John A. Bain, Alex Dee, Brian M. Kaplan, and Jerrold S. Maurer, a/k/a Jerry Maurer, individually, collectively, or in any combination.

         D. “Defendants” means the 8 Figure Dream Lifestyle Defendants and the OEA Defendants, individually, collectively, or in any combination.

         E. “Document” is synonymous in meaning and equal in scope to the usage of “document” and “electronically stored information” in Federal Rule of Civil Procedure 34(a), Fed.R.Civ.P. 34(a), and includes writings, drawings, graphs, charts, photographs, sound and video recordings, images, Internet sites, web pages, websites, electronic correspondence, including e-mail and instant messages, contracts, accounting data, advertisements, FTP Logs, Server Access Logs, books, written or printed records, handwritten notes, telephone logs, telephone scripts, receipt books, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, computer records, customer or sales databases and any other electronically stored information, including Documents located on remote servers or cloud computing systems, and other data or data compilations from which information can be obtained directly or, if necessary, after translation into a reasonably usable form. A draft or non-identical copy is a separate Document within the meaning of the term.

         F. “Electronic Data Host” means any person or entity in the business of storing, hosting, or otherwise maintaining electronically stored information. This includes, but is not limited to, any entity hosting a website or server, and any entity providing “cloud based” electronic storage.

         G. “OEA Corporate Defendants” means JL Net Bargains Inc.; Kappy Enterprises LLC; Millionaire Mind Enterprises LLC; OEA LLC, also d/b/a Online Entrepreneur Academy, d/b/a 14 Day Champion Challenge, d/b/a 14 Day Challenge; and Spirit Consulting Group Inc. and each of their subsidiaries, affiliates, successors, and assigns.

         H. “OEA Defendants” means the OEA Corporate and Individual Defendants, individually, collectively, or in any combination.

         I. “OEA Individual Defendants” means Alex Dee, Brian M. Kaplan, and Jerrold S. Maurer, a/k/a Jerry Maurer, individually, collectively, or in any combination.

         J. “Temporary Monitor” means the monitor appointed in Section XI of this Order.

         ORDER

         I. PROHIBITED BUSINESS ACTIVITIES

         IT IS THEREFORE ORDERED that OEA, its officers, agents, employees, and attorneys, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, whether acting directly or indirectly, in connection with the advertising, marketing, promoting, or offering for sale of any goods or services, are preliminarily restrained and enjoined from misrepresenting or assisting others in misrepresenting, expressly or by implication, any material fact, including, but not limited to:

         A. Consumers who purchase OEA's purported money-making opportunities will earn or are likely to earn substantial income; and

         B. Any other fact material to consumers concerning any good or service, such as: the total costs; any refund policy; any material restrictions, limitations, or conditions; or any material aspect of its performance, efficacy, nature, or central characteristics.

         II. PROHIBITION ON RELEASE OF CUSTOMER INFORMATION

         IT IS FURTHER ORDERED that OEA, its officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are hereby preliminarily restrained and enjoined from:

         A. Selling, renting, leasing, transferring, or otherwise disclosing, the name, address, birth date, telephone number, email address, credit card number, bank account number, Social Security number, or other financial or identifying information of any person that any Defendant obtained in connection with any activity that pertains to the subject matter of this Order; and

         B. Benefitting from or using the name, address, birth date, telephone number, email address, credit card number, bank account number, Social Security number, or other financial or identifying information of any person that any Defendant obtained in connection with any activity that pertains to the subject matter of this Order.

         Provided, however, that OEA may disclose such identifying information to a law enforcement agency, to its attorneys as required for its defense, as required by any law, regulation, or court order, or in any filings, pleadings or discovery in this action in the manner required by the Federal Rules of Civil Procedure and by any protective order in the case.

         III. ASSET FREEZE

         IT IS FURTHER ORDERED that OEA and its officers, agents, employees, and attorneys, and all other persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are hereby preliminarily restrained and enjoined from:

         A. Transferring, liquidating, converting, encumbering, pledging, loaning, selling, concealing, dissipating, disbursing, assigning, relinquishing, spending, withdrawing, granting a lien or security interest or other interest in, or otherwise disposing of any assets that are:

1. owned or controlled, directly or indirectly, by any ...

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