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Federal Trade Commission v. Amg Services, Inc.

United States District Court, D. Nevada

January 21, 2015

FEDERAL TRADE COMMISSION, Plaintiff,
v.
AMG SERVICES, INC., et al., Defendants.

ORDER

GLORIA M. NAVARRO, District Judge.

Pending before the Court is a Motion for Certificate of Appealability (ECF No. 635) pursuant to 28 U.S.C. § 1292(b) filed by the Lending Defendants[1] on July 30, 2014. The Federal Trade Commission (the "FTC") filed its Response to the Motion for Certificate of Appealability (ECF No. 657) on August 18, 2014.

For the reasons discussed below, the Court Denies the Lending Defendants' Motion for Certificate of Appealability.

I. BACKGROUND

The FTC filed its Complaint on April 2, 2012, alleging claims for deceptive acts and practices and deceptive collection practices in violation of the FTC Act (Counts I & II), for failing to properly disclose certain loan information in violation of the Truth in Lending Act ("TILA") and its implementing Regulation Z (Count III), for conditioning the extension of credit on the preauthorization of recurring loans in violation of EFTA (Count IV), and for disgorgement as provided under section 13(b) of the FTC Act (Count V). (Complaint 15:1-20:8, ECF No. 1).

On December 27, 2012, the Court signed an Order entering the parties' joint stipulation for preliminary injunction and bifurcation. (ECF No. 296). The Bifurcation Order divided the litigation into two phases: a liability phase and a relief phase. ( Id. 9:1-10:23) During Phase I of the proceedings, the Court would adjudicate the merits of the FTC's claims for violations of the FTC Act, TILA, and EFTA. ( Id. 9:1-24). During Phase II of the proceedings, the Court. would adjudicate the remaining issues, including the individual liability of the various Defendants. ( Id. 10:1-19).

On July 18, 2013, the Lending Defendants as well as Defendants AMG Capital Management, Level 5 Motorsports, LeadFlash Consulting, Black Creek Capital Corporation, Broadmoor Capital Partners, Scott A. Tucker, Blaine A. Tucker, Don E. Brady, Troy LittleAxe, and Robert D. Campbell (collectively the "Settling Defendants") stipulated to settle Counts II & IV with the FTC. On September 30, 2013, the FTC moved for summary judgment on Counts I-IV, and the Lending Defendants filed their own motion seeking summary judgment on Count III. (FTC's Mot. Summary Judgment p. 1, ECF No. 454; Lending Defendants' Mot. Summary Judgment, ECF No. 461). Following a Court Order (ECF No. 478) approving the stipulated settlement, however, the FTC withdrew its summary judgment motion on Counts II & IV against the Settling Defendants. (Withdrawal Motion p. 2, ECF No. 487).

The summary judgment motions were referred to Magistrate Judge Ferenbach pursuant to 28 U.S.C. § 636(b)(1)(B) and District of Nevada Local Rule IB 1-4. On January 28, 2014, Judge Ferenbach recommended that this Court enter an order granting the FTC's Motion for Summary Judgment on Counts I & III against the Defendants and denying the Lending Defendants' Motion for Summary Judgment on Count III. (Report & Recommendation, ECF No. 539).

On May 28, 2014, the Court entered an Order (ECF No. 584) accepting and adopting Judge Ferenbach's Report & Recommendation. In that Order, the Court found that the Loan Note Disclosure document used by the Lending Defendants in providing their loans violated the FTC Act and TILA because it failed to clearly and conspicuously disclose the nature of Defendants' automatic renewal plan whereby borrowers would incur repeated finance charges unless they opted out of the plan. (Summary Judgment Order 11:7-21:20, ECF No. 584). The Court, therefore, granted the FTC's Motion for Summary Judgment regarding Counts I & III. ( Id. 24:16-25:1); see also (July 16, 2014 Order, ECF No. 629 (clarifying the Summary Judgment Order and beginning Phase II)).

The Lending Defendants subsequently filed their Motion for a Certificate of Appealability, seeking an order from this Court certifying an interlocutory appeal pursuant to 28 U.S.C. § 1292(b). In their motion, the Lending Defendants assert that the Court's Summary Judgment Order involved three controlling questions of law as to which there are substantial grounds for difference of opinion. (Mot. for Cert. of Appealability 2:2-3:6, ECF No. 635). The three allegedly controlling questions of law are: (1) whether a TILA disclosure can be ambiguous and misleading for failing to clearly and conspicuously disclose the loan's automatic renewal plan, (2) whether the summary judgment standard permits "disregarding" the Lending Defendants' evidence, and (3) whether the summary judgment standard permits drawing inferences in favor of the movant. ( Id. ).

II. LEGAL STANDARD

"Section 1292(b) provides for interlocutory appeals from otherwise not immediately appealable orders, if conditions specified in the section are met, the district court so certifies, and the court of appeals exercises its discretion to take up the request for review." Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 n.10 (1996). Certification of an interlocutory appeal under section 1292(b) requires that "(1) there is a controlling question law, (2) that there are substantial grounds for difference of opinion, and (3) that an immediate appeal may materially advance the ultimate termination of the litigation." In re Cement Antitrust Litigation, 673 F.2d 1020, 1026 (9th Cir. 1982) (en banc), aff'd sub nom Arizona v. Ash Grove Cement Co., 459 U.S. 1190 (1983). However, even when all three statutory criteria are satisfied, district court judges have complete discretion to deny certification, and a district judge's decision to deny certification is unreviewable. Executive Software North America, Inc. v. U.S. Dist. Court for Cent. Dist. of California, 24 F.3d 1545, 1550 (9th Cir. 1994), overruled on other grounds by California Dept. of Water Resources v. Powerex Corp., 533 F.3d 1087 (9th Cir. 2008); see also United States v. W.R. Grace, 526 F.3d 499, 522 (9th Cir. 2008) ("[T]he district judge's decision to deny certification escapes our scrutiny.").

The Ninth Circuit has cautioned that section 1292(b) "is to be applied sparingly and only in exceptional circumstances." United States v. Woodbury, 263 F.2d 784, 799 n.11 (9th Cir. 1959). The statute "was not intended merely to provide review of difficult rulings in hard cases." United States Rubber Co. v. Wright, 359 F.2d 784, 785 (9th Cir. 1966). The party seeking review bears the burden of showing that "exceptional circumstances justify a departure from the basic policy of ...


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