Plaintiff Federal Trade Commission ("Commission" or "FTC"), pursuant to Sections 13(b) and 19(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b(a), has filed a Complaint for injunctive and other relief, including consumer redress, and applied ex parte for a temporary restraining order with asset freeze, an order permitting expedited discovery, and an order to show cause why a preliminary injunction should not issue pursuant to Rule 65 of the Federal Rules of Civil Procedure.

This Court has considered plaintiff's Complaint, Application for Ex Parte Temporary Restraining Order, Memorandum of Points and Authorities, Declarations and Exhibits, and all other papers filed herein. It appears to the satisfaction of the Court that:

1. This Court has jurisdiction over the subject matter of this case, and there is good cause to believe that the Court will have jurisdiction over the parties.

 

2. Venue lies properly with this Court.

 

3. There is good cause to believe that defendants Bargains & Deals Magazine, LLC, also doing business as Keith's Wholesale and Bargains & Deals Wholesale, and its principal, Michael P. Casey, have engaged in and are likely to engage in acts and practices that violate Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the Federal Trade Commission Trade Regulation Rule entitled "Mail or Telephone Order Merchandise Rule" ("the Rule" or "MTOR"), 16 C.F.R. Part 435, and that the Commission is likely to prevail on the merits of this action.

 

4. There is good cause to believe that immediate and irreparable harm will result from defendants' ongoing violations of Section 5(a) of the FTC Act, 15 U.S.C.

§ 45(a), and the Rule, absent the entry of this Temporary Restraining Order ("Order").

1. There is good cause to believe that immediate and irreparable damage to the Court's ability to grant effective final relief for consumers in the form of monetary redress will occur from the sale, transfer, assignment, or other disposition or concealment by defendants of their assets or records unless they are immediately restrained and enjoined by Order of this Court.

 

2. There is thus good cause for issuing this Order without prior notice to defendants of the Commission's application, pursuant to Federal Rule of Civil Procedure 65(b).

 

3. Weighing the equities and considering the Commission's likelihood of success in its causes of action, this Order is in the public interest.

(1) "Assets" means any legal or equitable interest in, right to or claim to any real or personal property including, but not limited to, chattel, goods, instruments, equipment, fixtures, general intangibles, effects, leaseholds, mail or other deliveries, inventory, checks, notes, accounts, credits, receivables (as those terms are defined in the Uniform Commercial Code), and all cash, wherever located.

(2) "Defendants" means Bargains & Deals Magazine, LLC, also d/b/a Keith's Wholesale and Bargains & Deals Wholesale, and Michael P. Casey, and each of them, by whatever names each might be known, as well as their successors, assigns, officers, agents, directors, servants, employees, salespersons, independent contractors, attorneys, corporations, subsidiaries, affiliates, all other persons or entities directly or indirectly under their control or under common control with them, and all other persons or entities in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any corporation, subsidiary, division or other device.

(3) "Document" is synonymous in meaning and equal in scope to the usage of the term in Federal Rule of Civil Procedure 34(a), and includes writings, drawings, graphs, charts, photographs, audio and video recordings, computer records, and other data compilations from which information can be obtained and translated, if necessary, through detection devices into reasonably usable form. A draft or non-identical copy is a separate document within the meaning of the term.

(4) "Named Defendants" means Bargains & Deals Magazine, LLC, also d/b/a Keith's Wholesale and Bargains & Deals Wholesale, and Michael P. Casey, and each of them, by whatever names each might be known.

(5) "Person" means any individual, group, unincorporated association, limited or general partnership, corporation or other business entity.

IT IS THEREFORE ORDERED that defendants are hereby temporarily restrained and enjoined from:

A. Misrepresenting or assisting others in misrepresenting, either orally or in writing, expressly or by implication, any material fact, including, but not limited to, the following:

 

1. Defendants have in their possession or under their control goods or services available to be purchased;

 

2. Defendants will ship goods or provide services, within a reasonable time period or within a specified time period, upon receipt of payment for those goods or services;

 

3. Defendants have shipped goods upon receipt of payment for those goods;

 

4. Goods that defendants offer for sale or sell are in new condition; and

 

5. Goods that defendants offer for sale or sell have designer or famous brand names; and

 

B. Violating or assisting others in violating any provision of the Mail or Telephone Merchandise Order Rule, 16 C.F.R. Part 435, including, but not limited to:

 

1. Soliciting orders for the purchase of goods without a reasonable basis for believing that they can ship the goods within the time stated in the solicitation or, if no time is stated, within thirty days of the solicitation, as required by 16 C.F.R. § 435.1(a)(1);

 

2. Failing to give consumers who have ordered goods from defendants the option to accept a delay or cancel the order upon defendants' discovery that they are unable to ship within the stated time period or within thirty days if no period was stated, as required by 16 C.F.R. § 435.1(b)(1); and

 

3. Failing to deem an order canceled and provide a refund where defendants have failed to give a delay or cancellation option, as required by 16 C.F.R. § 435.1(c).

IT IS FURTHER ORDERED that, except as stipulated by the parties or as directed by further order of the Court, named defendants are hereby temporarily restrained and enjoined from:

A. Transferring, converting, encumbering, selling, concealing, dissipating, disbursing, assigning, spending, withdrawing, or otherwise disposing of any funds, property, artwork, coins, precious metals, jewelry, contracts, shares of stock, or other assets, wherever located, that are owned or controlled by, in whole or in part, or in the actual or constructive possession of, named defendants or any other entity that is directly or indirectly owned, managed or controlled by, or under common control with named defendants, including, but not limited to, any assets held by or for named defendants in any private mailbox or with any mail delivery service, in any account at any bank or savings and loan institution, or with any broker-dealer, escrow agent, title company, commodity trading company, precious metal dealer or other financial institution of any kind;

 

B. Opening or causing to be opened any safe deposit boxes, storage facilities or private mailboxes or boxes with any mail delivery services titled in the name of any named defendant, or subject to access by any named defendant or under their control, without providing the Commission prior notice and an opportunity to inspect the contents in order to determine whether they contain assets covered by this Section;

 

C. The assets affected by this Section shall include both existing assets and assets acquired after the effective date of this Order, and named defendants shall hold and account for such property and assets and payments received by them, including, but not limited to, borrowed property and gifts; and

 

D. Failing to disclose immediately upon service of this Order, to Commission personnel or its designated agents, information that fully identifies each of named defendants' assets and each entity holding such assets, including without limitation, the entity's name, address, and telephone number, the account number of the asset, if any, and the name under which the asset is held.

IT IS FURTHER ORDERED that, effective immediately upon notification of this Order, and pending determination of plaintiff's request for a preliminary injunction, any bank, savings and loan institution, credit union, financial institution, brokerage house, escrow agent, money market or mutual fund, title company, commodity trading company, common carrier, storage company, trustee, commercial mail receiving agency, private mailbox, mail holding or forwarding company, or any other person, partnership, corporation, legal entity, business entity, or person that holds, controls or maintains custody of any account or asset belonging to or titled in the name of any named defendant or belonging to or titled in the name of any corporation, partnership or other entity directly or indirectly owned, managed or controlled by, in whole or in part, any named defendant, or to which they are a signatory, or which is held on behalf of, or for the benefit of, any named defendant, individually or jointly, or that has held, controlled or maintained custody of any such account or asset at any time since January 1, 1999, shall:

A. Prohibit named defendants and their agents, servants, employees, attorneys, and all persons or entities directly or indirectly under their control or in common control with them, from withdrawing, removing, assigning, transferring, pledging, encumbering, disbursing, dissipating, converting, selling or otherwise disposing of any such account or asset except:

 

1. As directed by further order of the Court; or

 

2. By written agreement of the Commission and the parties claiming an interest in such account or asset;

 

B. Maintain the status quo of any such account or asset and shall not withdraw, remove, assign, transfer, pledge, encumber, disburse, dissipate, convert, sell, or otherwise dispose of any such account or asset except:

 

1. As directed by further order of the Court; or

 

2. By written agreement of the Commission and the parties claiming an interest in such account or asset;

 

C. Deny named defendants and their agents, servants, employees, attorneys, and all persons or entities directly or indirectly under their control or in common control with them, unless accompanied by counsel for the Federal Trade Commission, access to any private mailbox, mail holding facility, storage facility or safe deposit box that is:

 

1. Titled in the name of any named defendant or their affiliates or subsidiaries, either individually or jointly; or

 

2. Otherwise subject to access by any named defendant or their affiliates;

 

D. Provide counsel for the Commission within five business days of receiving a copy of this Order, a sworn statement setting forth:

 

1. The identification number of each such mailbox, account or asset belonging to or titled in the name of any named defendant, or to which any named defendant is a signatory, or which is held on behalf of or for the benefit of any named defendant;

 

2. The balance of each such account, or a description of the nature and value of such asset as of the time this Order is served, and, if any asset valued at over $1,000 has been removed or transferred within the last 90 days, the date removed or transferred, the total funds removed or transferred, and the name of the person or entity to whom such account or other asset was remitted;

 

3. The identification of any private mailbox, mail holding facility, storage facility or safe deposit box that is titled in the name, individually or jointly, of any named defendant or is otherwise subject to access by any defendant; and

 

E. Upon the Commission's request, promptly provide the Commission with copies of all records or other documentation pertaining to such mailbox, storage facility, account or asset, including without limitation originals or copies of account applications, account statements, signature cards, checks, drafts, deposit tickets, transfers to and from the accounts, all other debit and credit instruments or slips, currency transaction reports, 1099 forms, and safe deposit box logs.

IT IS FURTHER ORDERED that, within five business days following service of this Order, named defendants shall:

A. Repatriate to the United States all funds, documents or assets in foreign countries held either: (1) by them; (2) for their benefit; or (3) under their direct or indirect control, jointly or singly;

 

B. The same business day as any repatriation under Section IV.A. above, (1) notify counsel for the Commission of the name and location of the financial institution or other entity that is the recipient of such funds, documents or assets; and (2) serve this Order on any such financial institution or other entity;

 

C. Provide plaintiff with a full accounting of all funds, documents, and assets outside of the territory of the United States held either: (1) by them; (2) for their benefit; or (3) under their direct or indirect control, jointly or singly; and

 

D. Hold and retain all repatriated funds, documents and assets and prevent any transfer, disposition or dissipation whatsoever of any such assets or funds.

IT IS FURTHER ORDERED that:

A. Defendant Michael P. Casey shall, within 48 hours after entry of this Order, prepare and deliver to counsel for the Commission a completed financial statement on the form captioned "Form Re: Financial Statement for Individual Defendant," which is appended to this Order as Attachment A. This financial statement shall be accurate as of the date of entry of this Order;

 

B. Defendant Michael P. Casey shall also, within 48 hours after entry of this Order, prepare and deliver to counsel for the Commission a completed financial statement on the form captioned "Form Re: Financial Statement for Business Defendant," which also is appended to this Order as Attachment B, and shall include one such form for each business entity owned, controlled or managed by him. These financial statements shall be accurate as of the date of entry of this Order; and

 

C. The named defendants shall each, within 48 hours after entry of this Order, provide the Commission access to records and documents pertaining to named defendants that are held by financial institutions outside the territory of the United States by signing the Consent to Release of Financial Records, attached to this Order as Attachment C.

IT IS FURTHER ORDERED that defendants are hereby temporarily restrained and enjoined from destroying, erasing, mutilating, concealing, altering, transferring or otherwise disposing of, in any manner, directly or indirectly, any documents that relate to the business practices or business or personal finances of defendants; to the business practices or finances of entities directly or indirectly under the control of defendants; or to the business practices or finances of entities directly or indirectly under common control with any other defendant.

IT IS FURTHER ORDERED that defendants are hereby temporarily restrained and enjoined from:

A. Failing to create and maintain documents that, in reasonable detail, accurately, fairly, and completely reflect their incomes, disbursements, transactions, and use of money, beginning as of the time of effective service of this Order;

 

B. Failing to make and keep books, records, accounts, bank statements, current accountants' reports, general ledgers, general journals, cash receipt ledgers, cash disbursement ledgers and source documents, documents indicating title to real or personal property, and any other data which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of defendants;

 

C. Destroying, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, any books, records, tapes, discs, accounting data, checks (fronts and backs), correspondence, forms, advertisements, brochures, manuals, electronically stored data, banking records, customer lists, customer files, invoices, telephone records, ledgers, payroll records or other documents of any kind, including information stored in computer-maintained form, in their possession, custody or control; and

 

D. Creating, operating or exercising any control over any business entity, including any partnership, limited partnership, joint venture, sole proprietorship or corporation, without first providing the Commission with a written statement disclosing: (1) the name of the business entity; (2) the address and telephone number of the business entity; (3) the names of the business entity's officers, directors, principals, managers, and employees; and (4) a detailed description of the business entity's intended activities.

IT IS FURTHER ORDERED that named defendants shall immediately provide a copy of this Order to each affiliate, partner, division, sales entity, successor, assign, employee, independent contractor, agent, attorney, and representative of named defendants and shall, within ten days from the date of entry of this Order, serve upon counsel for the Commission a sworn statement that they have complied with this provision of the Order, which statement shall include the names and addresses of each such person or entity who received a copy of the Order.

IT IS FURTHER ORDERED that:

A. Plaintiff's agents or employees may serve this Order upon any financial institution, or other entity or person that may have possession, custody, control or knowledge of any documents or assets of any defendant, or any other entity or person that may be otherwise subject to any provision of this Order, by serving a copy at any office or branch by any means, including facsimile transmission; and

 

B. For purposes of service on anyone in possession of records, assets, property or property rights, actual notice of this Order shall be deemed complete upon notification by any means including, but not limited to, notice from service by facsimile transmission of the first page, Paragraphs II, III, and IX, and the final page of this Order, provided that notice is followed within five business days by delivery of a complete copy of this Order.

IT IS FURTHER ORDERED that pursuant to Section 604(a)(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(1), any consumer reporting agency served with this Order shall promptly furnish consumer reports concerning defendant Michael P. Casey to counsel for the Commission.

IT IS FURTHER ORDERED that pursuant to Federal Rules of Civil Procedure Rules 30(a), 31(a), 34, and 45, plaintiff is granted leave to, at any time after service of this Order:

A. Take the deposition, including depositions upon 48 hours' written notice, of any person, whether or not a party, for the purpose of discovering the nature, location, status, and extent of assets of defendants or their affiliates or subsidiaries; the nature and location of documents reflecting the business transactions of defendants; the whereabouts of defendants; and the applicability of any evidentiary privileges to this action. The limitations and conditions set forth in Fed. R. Civ. P. 30(a)(2)(B) and 31(a)(2)(B) regarding subsequent depositions of an individual shall not apply to depositions taken pursuant to this paragraph. Any such depositions taken pursuant to this paragraph shall not be counted toward the ten-deposition limit set forth in Fed. R. Civ. P. 30(a)(2)(A) and 31(a)(2)(A). Service of discovery upon a party, taken pursuant to this paragraph, shall be sufficient if made by facsimile or by overnight delivery; and

 

B. Demand the production of documents, on five days' notice, from any person, whether or not a party, relating to the nature, status or extent of defendants' assets, or of their affiliates or subsidiaries; the location of documents reflecting the business transactions of defendants; the whereabouts of defendants; and the applicability of any evidentiary privileges to this action, provided that 24 hours' notice shall be deemed sufficient for the production of any such documents that are maintained or stored as electronic data.

IT IS FURTHER ORDERED that this Order shall expire on ______________________, 2001, unless within such time, the Order, for good cause shown, is extended for an additional period not to exceed ten days, or unless it is further extended by the Court for good cause shown or with the consent of the parties.

IT IS FURTHER ORDERED pursuant to Federal Rule of Civil Procedure 65(b), that defendants shall appear before this Court, on the _____ day of _______________, 2001, at __________ o'clock ___.m., to show cause, if there is any, why this Court should not enter a preliminary injunction, pending final ruling on the Complaint against defendants, enjoining them from further violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the Mail or Telephone Merchandise Order Rule, 16 C.F.R. Part 435, continuing the freeze of their assets, and imposing such additional relief as may be appropriate.

IT IS FURTHER ORDERED that defendants, in responding to this Court's Order to Show Cause, shall serve all memoranda, affidavits, and other evidence on which they intend to rely not later than 4:00 p.m. (PST) of the fourth day prior to the preliminary injunction hearing set in this matter. Service on the Commission shall be performed by personal delivery, or confirmed facsimile delivery, to Nadine Samter, Esq., at the following address: Federal Trade Commission, 915 Second Ave., Suite 2896, Seattle, WA 98174, (206) 220-6366 (fax number). The Commission may serve and file a supplemental memorandum of points and authorities based on evidence discovered subsequent to the filing of its Complaint by no later than 4:00 p.m. (PST) of the fourth day prior to the preliminary injunction hearing, and may serve and file a reply to defendants' opposition by no later than 4:00 p.m. (PST) on the day prior to the preliminary injunction hearing.

IT IS FURTHER ORDERED that there will be no direct examination of witnesses at the preliminary injunction hearing in this matter, unless specifically ordered by this Court. In the event this Court permits direct examination of witnesses at the preliminary injunction hearing in this matter, the parties shall exchange and file with the Court the names of those witnesses to testify at the hearing and a summary of the substance of the witnesses' testimony to be proffered at the hearing no later than four business days prior to the scheduled hearing.

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes.

No security is required of any agency of the United States for the issuance of a restraining order. Fed. R. Civ. P. 65(c).

SO ORDERED, this _____ day of __________________, 2001, at _______.m.

__________________________________
United States District Judge

Presented by:

Nadine S. Samter WSBA # 23881
Kathryn C. Decker WSBA #12389
Federal Trade Commission
915 Second Ave., Suite 2896
Seattle, WA 98174
(206) 220-6350
FAX (206) 220-6366
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION

I, ______________________ , of the State of in the United States of America, do hereby direct any bank or trust company at which I have a bank account of any kind or at which a corporation has a bank account of any kind upon which I am authorized to draw, and its officers, employees and agents, to disclose all information and deliver copies of all documents of every nature in your possession or control which relate to the said bank accounts to any attorney of the Federal Trade Commission, and to give evidence relevant thereto, in the matter of Bargains & Deals Magazine, LLC, also doing business as Keith's Wholesale and Bargains & Deals Wholesale, and Michael P. Casey, now pending in the United States District Court for the Western District of Washington at Seattle, and this shall be irrevocable authority for so doing. This direction is intended to apply to the laws of countries other than the United States which restrict or prohibit the disclosure of bank information without the consent of the holder of the account, and shall be construed as consent with respect thereto, and the same shall apply to any of the bank accounts for which I may be the relevant principal.

Dated: , 2001