Free Motion for TRO - District Court of California - California

Case 3:08-cv-01718-VRW

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Filed 03/31/2008

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WILLIAM BLUMENTHAL General Counsel JANICE L. CHARTER Colo. Bar No. 12750 DAVID M. NEWMAN Cal. Bar No. 54218 THOMAS DAHDOUH N.Y. Bar No. 2222370 Federal Trade Commission 901 Market Street, Suite 570 San Francisco, CA 94103 Phone (415) 848-5100/ Fax (415) 848-5184 [email protected] [email protected] [email protected] Attorneys for Plaintiff Federal Trade Commission UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION FEDERAL TRADE COMMISSION, Plaintiff, v. NEXTCLICK MEDIA, LLC, a Delaware limited liability company, dba StopSmoking180.com, StopSmokingResolution.com, BeautifulSkin.com, and OnLineDirectProducts; NEXT INTERNET, LLC, a Delaware limited liability company; KENNETH CHAN, individually and as an officer of NEXTCLICK MEDIA, LLC, and NEXT INTERNET, LLC; and ALBERT CHEN, individually and as an officer of NEXTCLICK MEDIA, LLC,

Case No. 4:08-cv-01718

VRW

PLAINTIFF'S MOTION FOR A TEMPORARY RESTRAINING ORDER WITH ASSET FREEZE, APPOINTMENT OF RECEIVER, ORDER TO SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT ISSUE, AND OTHER EQUITABLE RELIEF

Defendants. Plaintiff Federal Trade Commission ("FTC" or "Commission"), pursuant to Rule 65(b) of the Federal Rules of Civil Procedure and Local Rule 65-1, respectfully applies TRO Motion Page 1

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to this Court on an expedited basis for a Temporary Restraining Order ("TRO"). As grounds for this application, the Commission states that Defendants are engaging in acts and practices that violate Sections 5(a) and 12 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a) and 52; Section 907(a) of the Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. § 1693e(a); and Section 205.10(b) of Regulation E, 12 C.F.R. § 205.10(b), as set forth in the Complaint, Memorandum of Points and Authorities in support of this motion, and the supporting declarations and exhibits. Plaintiff asks that the Court enter a TRO that will: 1. Temporarily restrain Defendants from violating Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52; Section 907(a) of the EFTA, 15 U.S.C. § 1693e(a); and Section 205.10(b) of Regulation E, 12 C.F.R. § 205.10(b); 2. Temporarily restrain Defendants from disposing of individual or corporate assets, including financial accounts, real and personal property, safe deposit boxes, and other assets, all of which are subject to disgorgement and claims of restitution; 3. Temporarily restrain financial institutions from permitting Defendants to dispose of the assets of Defendants and from granting Defendants access to safe deposit boxes; 4. Require financial institutions to file a statement describing any assets held on behalf of Defendants, wherever held, and to provide the Commission with copies of all records pertaining to Defendants' financial accounts; 5. Temporarily restrain Defendants from destroying or disposing of any business records or from failing to maintain business records; 6. Require Defendants to complete financial accounting forms and describe their present individual and corporate financial conditions; 7. Require Defendants to repatriate all assets and corporate records that are located outside of the United States; TRO Motion Page 2

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8.

Require the individual Defendants to give notice of their affiliation with any new or currently-existing business entity;

9. 10.

Temporarily restrain Defendants from selling consumer list information; Appoint a temporary receiver over Defendants NextClick Media, LLC, dba StopSmoking180.com, StopSmokingResolution.com, BeautifulSkin.com, and OnLineDirectProducts; and Next Internet, LLC ("Receivership Defendants");

11. 12.

Temporarily stay any lawsuit against Receivership Defendants; Permit expedited discovery for the taking of depositions, interrogatories, production of documents, and requests for admissions pursuant to Rules 30(a), 33, 34 and 36 of the Federal Rules of Civil Procedure, concerning the location of Defendants or their assets;

13.

Allow the Commission's employees to have access to any Defendant's business premises;

14.

Permit the Commission to obtain consumer credit reports for Defendants pursuant to 15 U.S.C. § 1681(1);

15.

Require Defendants to immediately provide a copy of the attached TRO to each of their employees and subsidiaries;

16.

Require Defendants to show cause why a preliminary injunction would not issue, extending the foregoing temporary relief until the merits of the Commission's allegations are finally adjudicated; and

17.

Provide other ancillary equitable relief.

The interests of justice require that this motion be heard on an expedited basis, pursuant to Fed. R. Civ. P. 65(b) and Local Rule 65-1. Hearing this application on an expedited basis will prevent immediate and irreparable damage to the Commission's efforts to redress consumer losses that have resulted from Defendants' law violations. Issuing the TRO with asset freeze and appointment of a temporary receiver will facilitate TRO Motion Page 3

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full and effective relief by preserving the status quo pending a hearing on the requested Preliminary Injunction. This motion is accompanied by a supporting Memorandum, and a proposed TRO and Preliminary Injunction. Pursuant to Local Rule 65-1(b), plaintiff will provide timely notice to Defendants once the Court has set a hearing date for this motion.

Dated: March 31, 2008

Respectfully Submitted, WILLIAM BLUMENTHAL General Counsel /S/ JANICE L. CHARTER DAVID M. NEWMAN THOMAS DAHDOUH Attorneys for Plaintiff Federal Trade Commission

TRO Motion

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