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Federal Trade Commission v. OMICS Group Inc.

United States District Court, D. Nevada

March 29, 2019

FEDERAL TRADE COMMISSION, Plaintiff,
v.
OMICS GROUP INC., et al., Defendants.

          ORDER

          Gloria M. Navarro, Chief Judge

         Pending before the Court is the Motion for Summary Judgment, (ECF No. 86), filed by Plaintiff Federal Trade Commission (“the FTC”). Defendants OMICS Group Inc. (“OMICS”), iMedPub LLC (“iMedPub”), Conference Series LLC (“Conference Series”), and Srinubabu Gedela (“Gedela”) (collectively “Defendants”) filed a Response, (ECF No. 110), and the FTC filed a Reply, (ECF No. 115). Also, before the Court is the Motion for Summary Judgment, (ECF No. 89), filed by Defendants. The FTC filed a Response, (ECF No. 97), [1] and Defendants filed a Reply, (ECF No. 107). For the reasons discussed herein, the FTC's Motion for Summary Judgment is GRANTED, and Defendants' Motion for Summary Judgment is DENIED.

         I. BACKGROUND

         A. Overview

         The FTC brings this action pursuant to Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), alleging that Defendants engaged in unfair and deceptive practices with respect to the publication of online academic journals and organization of scientific conferences. (See Compl., ECF No. 1). Defendants claim to operate hundreds of online academic journals on a wide variety of topics, including medicine, chemistry, nursing, engineering, and genetics. (Id. ¶ 20); (Gedela Decl. ¶¶ 14-15, Ex. 1 to Defs.' MSJ, ECF No. 89-1). In order to persuade consumers to submit articles, the FTC alleges that Defendants make numerous misrepresentations regarding the nature and reputation of their journals. (Compl. ¶¶ 11, 12). The FTC also alleges that Defendants fail to disclose the significant fees associated with their publishing services. (Id. ¶ 13). Finally, the FTC alleges that Defendants make numerous misrepresentations in connection with the marketing of their scientific conferences. (Id. ¶ 14).

         The FTC asserts that Defendants OMICS, iMedPub, and Conference Series (collectively “Corporate Defendants”) have operated as a common enterprise in violating Section 5(a) and therefore are jointly and severally liable. (Id. ¶ 10). The FTC further asserts that Gedela has “formulated, directed, controlled, had the authority to control, or participated in the acts and practices of the Corporate Defendants that constitute the common enterprise.” (Id.). Based on these allegations, the FTC initiated this action against Defendants on August 25, 2016. On September 29, 2017, the Court granted the FTC's request for a preliminary injunction, requiring Defendants to preserve records, provide financial accounting to the FTC, and refrain from engaging in deceptive practices. (Prelim. Inj. Order, ECF No. 46). The parties now submit their respective motions for summary judgment on the FTC's unfair and deceptive practices claim.

         B. Background on Academic Publishing[2]

         1) Traditional Model vs. Open Access

         Academic or scholarly journals are peer-reviewed publications that focus on a particular academic or scientific discipline. (See SJX18 Backus Decl. ¶ 5, Ex. 18 to FTC's MSJ, ECF No. 86-18).[3] These publications are comprised of articles, which typically take the form of “original research, review articles, commentaries, or clinical case studies.” (Id.).

         Under the traditional model, publishers charge libraries and individuals “user subscription fees” to gain access to the published material. (Id. ¶ 6). The articles remain accessible to the extent users remain subscribed to the journal. (See id.). In contrast, under the newer “open access” model, journals make their content available to the public at no cost, subsidizing their operations primarily through author-funded publication fees. (Id. ¶ 7); (Gedela Decl. ¶ 9, Ex. 1 to Defs.' MSJ). By removing price and permission barriers, this model increases access to a broader community. (SJX18 Backus Decl. ¶ 9); (Gedela Decl. ¶ 10).

         2) Peer Review

         “Peer-review” is the process of subjecting an author's scholarly work, research, or ideas to the scrutiny of qualified experts in the same field prior to publishing in a journal. (SJX18 Backus Decl. ¶ 12). When an author submits their work, the journal makes an initial determination regarding whether to accept the article for peer review or reject it outright. (Id.). If accepted, authors are expected to respond to peer reviewer commentary, implement recommendations, and, if necessary, justify the rejection of any proposed revisions. (See Id. ¶¶ 14-15). The peer-review process typically takes several months. (Id.). Prior to publishing, authors are usually required to sign a publication agreement that gives the journal the right to publish the submitted article. (Id. ¶ 14).

         3) Impact Factors

         In the academic publishing industry, a journal's “impact factor” is often used as an objective measure of the prestige or relative importance of a journal in its field. (Id. ¶ 15). “Impact factor” typically measures the average number of scholarly citations that articles receive in a published journal. (See Id. ¶ 16). A higher impact factor indicates a more reputable journal. (Id. ¶ 15). Amongst those in the industry, the term is specifically understood to mean the proprietary citation measure calculated and published by Thomson Reuters in its Journal Citation Reports. (Id. ¶ 16).[4] A journal must be indexed by Thomson Reuters in either its Science Citation Index Expanded or its Social Sciences Citation Index to receive an impact factor. (Id.).

         4) Indexing

         Aside from impact factors, “indexing” also serves as an indicator of a journal's reputation. (Id. ¶¶ 17-22). The United States National Library of Medicine (“NLM”) produces and manages three freely accessible bibliographical resources: PubMed, Medline, and PubMed Central. (SJX11 Admissions Nos. 42, 43). Journals must apply for inclusion in Medline and PubMed Central, upon which time an NIH-chartered advisory committee reviews the submission. (See id.). Due to the selective nature of these indexes, a journal's inclusion is considered indicative of a journal's quality. (See id.).

         C. Gedela and the Corporate Defendants

         1) Corporate Structure

         Defendants OMICS, iMedPub, and Conference Series are corporate entities registered in the United States with a principle place of business located in Hyderabad, India. (SJX02 Answer ¶¶ 6-8); (Gedela Decl. ¶ 6).[5] Each entity shares the same principal address at SEZ Unit, Building No. 20, 9th Floor, APIIC Layout, HITEC City, Hyderabad, AP 500081. (Id.). Furthermore, each entity at various points has utilized common addresses for their United States locations and business registrations. (Id.); (See, e.g., PX12 Att. D at 116, Att. I at 257, Att. K at 367, Att. L at 667, Att. M at 945); (SJX26 Att. J at 284, 290, 296, 299, Att. K at 323, Att. L at 328, Att. M at 338); (Internet Archives at 10, 17, 96, ECF No. 84).[6] In general, these entities operate as a group with comingled assets. (See generally FTC's MSJ 6:10-7:27, ECF No. 86).

         Gedela is the sole owner and founding director of the three Corporate Defendants. (SJX02 Answer ¶ 9); (SJX03 OMICS Int. Resp. 2); (SJX04 iMedPub Int. Resp. 2); (SJX05 Conference Series Int. Resp. 2); (Defs.' MSJ 5:3-4, ECF No. 89). Gedela first began using the fictitious business name “OMICS Publishing Group” for his publishing and conference services in 2009. (SJX23 Gedela Dep. 23:1-18, 30:1-25); (Defs.' MSJ 5:3-11). Until at least 2015, Gedela held revenue from the Corporate Defendants in a Citibank account set up in Palo Alto for OMICS Publishing Group. (See SJX23 Gedela Dep. 27:1-30:25). As founding director, Gedela has authority and control over Defendants' conference and publishing practices. (SJX10 Admission Nos. 1-4, 20); (See FTC's MSJ 4:26-5:22). Furthermore, Gedela has signatory authority over OMICS and iMedPub's financial accounts. (SJX02 Answer ¶ 9); (SJX10 Admission No. 22). Gedela operates as the main contact for the Corporate Defendants' servicers, including their payment processor. (PX12 Att. P at 1007; Att. O at 997, 999; Att. D at 109).

         2) Defendants' Peer Review Practices

         Defendants advertise throughout their websites and email solicitations that they strictly adhere to standard peer-review practices. (See SJX11 Admission No. 60); (SJX12 Admission Nos. 61-64); (SJX13 at 6-14); (SJX 15 at 4-8, 11-14); (See SJX1 Solicitation Email at 8); (SJX26 Att. Q at 576, 585, 588, 630, 698); (See PX12 Att. L at 657). For example, in 2014, Defendants published web pages stating that OMICS had 25, 000 experts serving as editorial board members and reviewers, and that “[a]ll articles submitted are subjected to a blind peer review.” (SJX15 ¶¶ 182-186). Over the years, this number has grown to over 50, 000 purported experts serving as board members and reviewers for over 700 “leading-edge peer reviewed” journals. (SJX26 Att. Q at 576, 586); (Gedela Decl. ¶¶ 14-15, Ex. 1 to Defs.' MSJ). Consistently, Defendants have represented their peer review policies as “highly appreciated, accepted and adaptable” to the criteria set forth by agencies such as PubMed. (PX12 Att. L at 773).

         In contradiction to these assertions, however, the FTC submits evidence indicating that Defendants' peer review practices are a “sham.” (FTC's MSJ 24:4-5). For example, in certain instances, consumers who submitted articles were approved within just several days of submission. (SJX 26 Att. A at 20, 53, 69, 84, 86, 114). In others, consumers reported receiving no comments or proposed revisions from peer reviewers. (See id. at 37, 53, 73, 93, 114, 124). The consumers who did receive feedback from reviewers have noted that it was not substantive. (Id. at 53); (PX09 Hoevet Decl. ¶ 4); (PX10 Davidson Decl. ¶¶ 6, 10).

         In 2012, John Bohannon-a scientist and writer for Science magazine-submitted two articles to Defendants' journals with intentionally “egregious” scientific flaws. (PX14 Bohannon Decl. ¶ 3).[7] Defendants' journals accepted the flawed papers without any substantive comments or review. (See Id. ¶¶ 5, 7). Similarly, in 2016, a journalist for the Ottawa Citizen submitted an “unintelligible” article containing ungrammatical sentences and invented words. (SJX01 Spears Decl. ¶ 2). Defendants' journal published the article without any edits and without contacting the author prior to publication. (Id. ¶ 3). After reviewing these cases, the FTC's expert Joyce Backus concluded that the papers were not subjected to peer review “as that term is understood in the academic publishing industry.” (SJX18 Backus Decl. ¶¶ 29, 31).

         In addition to consumer commentary, the FTC also submits statements from multiple of Defendants' journal editors. (FTC's MSJ 25:15-25). In these statements, the editors indicate that they never received any manuscripts to review. (PX01 Woods Decl. ¶¶ 3-4, 9); (PX03 Everett Decl. ¶¶ 3-4). Based on documents received through discovery, the FTC asserts that out of 69, 000 published articles, only 49% indicate that some form of review was conducted. (See FTC's MSJ 26:8-14).

         3) Defendants' Expert Reviewers

         Defendants advertise that their publications are reviewed and edited by as many as 50, 000 experts. (SJX26 Att. Q at 576, 586); (Gedela Decl. ¶¶ 14-15, Ex. 1 to Defs.' MSJ).[8] In support of this claim, Defendants' websites include hundreds of names, pictures, and biographies of scientists and researchers allegedly serving on editorial boards. (PX12 Att. L at 669-82, 734-37, 808-815). Upon the FTC contacting several listed editors, however, many indicated that they had never agreed to be affiliated with OMICS. (PX02 Grace Decl. ¶¶ 4-7); (PX08 Howland Decl. ¶ 7); (PX11 Rusu Decl. ¶ 11). Furthermore, in some instances, Defendants continued to use the researchers' names even after they requested removal. (PX08 Howland Decl. ¶ 7); (PX11 Rusu Decl. ¶ 11); (SJX26 Att. A at 35, 63). More generally, the FTC notes that Defendants have only been able to produce a list of 14, 598 unique editors and evidence of an agreement to serve as an editor for only 380 individuals. (SJX24 Wilson Decl. ¶ 3); (SJX26 Freeman Decl. ¶ 15).

         4) Defendants' Use of Impact Factors

         Defendants advertise throughout their websites and solicitation emails that their publications have high “impact factors.” (SJX26 Att. Q at 741-768); (PX12 Att. L 657, 691, 762, 766, 768-769, 881-935); (SJX15 Admissions Nos. 196, 197). These advertisements include express representations, such as “OMICS International journals are among the top high impact factor academic journals which are publishing scholarly articles constantly.” (SJX26 Att. Q. 820). Defendants admit that their journals do not have Thomson Reuters impact factors. (SJX04 iMedPub Int. Resp. 8); (SJX07 OMICS Int. Resp. 15). Rather, Defendants' impact factors are self-calculated ratios based on the number of citations found through a Google Scholar search. (See PX12 Att. L at 770); (SJX14 Admission No. 103); (SJX26 Att. P at 467, 763).

         Defendants' websites contain inconsistent descriptions of how their impact factors are calculated. In some places, the impact factors are described as based on Journal Citation Reports, which is consistent with the Thomson Reuters Impact Factor. (SJX15 Admissions 198-211). In other places, Defendants describe them as an “unofficial impact factor” based on Google Scholar Citations. (See, e.g., SJX14 Admission No. 103); (Internet Archives at 93, ECF No. 84). Although Defendants provide their alternate definition in disclosures, such explanations often appear buried underneath their journal marketing. (See PX12 Att. L at 881- 931); (SJX26 Att. P at 450-467). In some instances, Defendants' websites make the general claim that their journals have “high impact factors” without any qualification. (See PX12 Att. L at 657, 762); (SJX26 Att. Q at 820). Similarly, Defendants have sent solicitation emails referring to their journals' impact factors without qualification. (See SJX27 Email at 3).

         5) Defendants' Indexing Representations

         Defendants represent that their publications are indexed in reputable indexing services. (See PX12 Att. L at 643, 657, 694). For example, Defendants repeatedly indicate that their journals are indexed in Medline and PubMed Central. (PX10 Att. D at 16); (SJX26 Att. Q at 589, 820, 916, 923). At various points, Defendants have even utilized PubMed and Medline's logos on their websites. (Internet Archives at 8, 11, 14, 17, 20, 24).

         Despite these representations, Defendants admit that none of their journals are indexed in PubMed Central or Medline. (See SJX07 Admission Nos. 13, 14); (SJX08 Admission Nos. 13, 14). Instead, Defendants claim that more than 900 well-respected scientists have recommended OMICS' journals to be published in PubMed central. (Gedela Decl. ¶ 17, Ex. 1 to Defs.' MSJ). Nonetheless, NLM has explicitly refused to index Defendants' publications due to questionable publishing practices and requested that Defendants cease indicating any affiliation. (SJX18 ¶¶ 32-36, Att. B at 25, Att. C at 28, Att. D at 31, Att. E at 33-34). Despite NLM's requests, Defendants have continued to indicate their journals' inclusion in Medline and PubMed Central. (See PX10 Att. D at 16); (SJX26 Att. Q at 589).

         6) Defendants' Publishing Fees

         Defendants frequently send out solicitation emails inviting individuals to submit articles to Defendants' online publications. (See PX04 Att. A at 6); (PX09 Att. A at 4); (PX10 Att. D at 16, Att. G at 37); (PX11 Att. D at 11). In numerous instances, these email solicitations contain no mention of any fees associated with Defendants' publication service. (Id.). Defendants have continued this practice even after the Court's entry of its preliminary injunction. (See SJX01 at 6); (SJX26 Att. A at 65); (SJX27 Att. A at 3-7). Defendants' solicitation emails invite consumers to submit articles by responding directly to the email. (Id.). Additionally, Defendants solicit article submissions through their online portals. (See SJX15 at 25-26). In many instances, Defendants' article homepages do not contain clear reference to fees associated with submitting articles. (See, e.g., PX12 Att. L at 652-654, 734-738); (SJX26 Att. Q at 631-640). In other instances, Defendants' fee disclosures are contained on secondary webpages but lack specificity. (PX12 Att. K at 375-381). Notably, consumers going to a journal's homepage can submit a manuscript without ever seeing any fee disclosures. (See, e.g. PX12 Att. K at 340-341).

         Some consumers only learn of Defendants' fees after Defendants have accepted their articles . (See, e.g., PX04 ¶ 5); (SJX26 Att. A at 20, 26, 33, 45, 59). Furthermore, when consumers contest Defendants' publication fees and ask their articles to be withdrawn, Defendants have ignored the requests and continued demanding payment. (See, e.g., PX04 ¶¶ 6-8); (PX06 ¶¶ 6, 8); (PX07 ¶¶ 5, 8). In some instances, Defendants only removed the articles after the threat of legal action. (See, e.g., PX07 ¶¶ 9-10). In addition to economic harm, this conduct prevents authors from submitting their work to other journals. (See SJX18 Backus Decl. ¶ 11). The Court notes, however, that at least one consumer has found the publication fees to be clearly disclosed. (See Orser Decl. ¶ 14, Ex. B to Defs.' Resp., ECF No. 110-4).

         7) Defendants' Conference Practices

         In addition to online publishing, Defendants also organize conferences on various scientific topics. (See SJX16 Gedela Decl. ¶¶ 6, 8); (SJX26 Att. B at 170, 185, 188). Defendants note that they have received “appreciation and invitation letters for hosting [their] conferences in many major cities.” (Defs.' MSJ 8:15-16); (Letters, Ex. 3 to Defs.' MTD, ECF No. 31). Many of these conferences occur in the United States. (SJX26 ¶¶ 10-14).

         In order to attract consumers, Defendants advertise the attendance and participation of prominent academics and researchers. (See PX05 ¶¶ 3, 5); (PX12 Att. U at 1045); (SJX26 Att. A at 22, 56, 170). The FTC has provided evidence, however, that Defendants advertise the attendance and participation of these individuals without their permission or actual affiliation. (See PX05 ¶¶ 3, 5); (PX12 Att. U at 1045). In numerous instances, individuals have requested unsuccessfully to have their names removed from Defendants' conference advertising materials. (See, e.g., PX03 ¶¶ 6-12); (SJX26 Att. N at 370). In some instances, Defendants did not remove an individuals' name until the threat of legal action. (See, e.g., PX05 ¶ 7). According to the FTC's sampling of 100 conferences, approximately 60% advertised organizers or participants who had not agreed to serve in such capacity. (SJX25 McAlvanah Decl. ¶ 7).

         II. LEGAL STANDARD

         The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See Id. “Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor.” Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103-04 (9th Cir. 1999)). A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).

         In determining summary judgment, a court applies a burden-shifting analysis. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323- 24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).

         If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Celotex Corp., 477 U.S. at 324.

         At summary judgment, a court's function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is not significantly probative, summary judgment may be granted. See Id. at 249-50.

         III. DISCUSSION

         A. FTC's Motion to Strike Declaration

         The FTC moves to strike the declaration of Defendants' Indian counsel, Kishore Vattikoti (“Vattikoti”), which is attached to Defendants' Motion for Summary Judgment. (FTC Mot. to Strike 1:22-24, ECF No. 96). In the declaration, Koshore Vattikoti makes numerous broad assertions regarding the validity of Defendants' conference and publishing practices. (Vattikoti Decl. ¶¶ 6-9, Ex. 3 to Defs.' MSJ, ECF No. 89-3). Additionally, Vattikoti testifies that “all consumer complaints [against Defendants] have been resolved.” (Id. ¶ 10). Attached to the declaration is what appears to be a summary exhibit of consumer complaints. (Id. at Ex. C). The summary exhibit contains notations regarding the manner in which Defendants purportedly resolved the complaints. (Id.).

         The FTC asserts that this declaration violates Federal Rule of Civil Procedure (“FRCP”) 56(c)(4) because it fails to include “specific facts” of which the declarant has personal knowledge. (FTC Mot. to Strike 2:7-9). Specifically, the FTC notes that Gedela has previously testified that Vattikoti's responsibilities are limited to helping Defendants with this specific action, and he is not involved in the business. (Id. 2:24-3:4). In response, Defendants claim that Vattikoti has sufficient personal knowledge as Defendants' legal counsel and through assisting in Defendants' prior transactional and marketing matters. (See Defs.' Resp. 2:25- 3:15).

         FRCP 56(c)(4) states that an affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated. Fed.R.Civ.P. 56(c)(4). Here, Defendants fail to articulate how Vattikoti's role as Defendants' legal counsel gives him personal knowledge of whether 74 specific consumer complaints have been resolved. Defendants also fail to identify the source of the notations on Vattikoti's summary exhibit, thus giving no basis to the evidence he is relying upon. The Court therefore strikes these portions as violating Rule 56.[9] With respect to the remaining portions, the Court finds Defendants have sufficiently demonstrated Vattikoti's personal knowledge and therefore will not strike them. Nonetheless, the Court notes that these vague and conclusory assertions do not raise a genuine issue of material fact. See Casey v. Lewis, 4 F.3d 1516, 1527 (9th Cir. 1993); F.T.C. v. Publ'g Clearing House, Inc., 104 F.3d 1168, 1171 (9th Cir. 1997).

         B. Violations of Section 5 of the FTC Act

         The FTC asserts that Defendants engaged in deceptive practices in violation of Section 5 by: (1) misrepresenting the nature of their academic journals; (2) misrepresenting their scientific conferences; and (3) failing to adequately disclose that consumers must pay publishing fees. (See FTC's MSJ 32:2-6). The Court addresses each contention below.

         1) Deceptive Practices Legal Standard

         Section 5 of the FTC Act prohibits “unfair or deceptive practices in or affecting commerce.” 15 U.S.C. § 45. An act or practice is deceptive under Section 5 if it involves a material misrepresentation or omission that is likely to mislead consumers acting reasonably under the circumstances. FTC v. Stefanchik, 559 F.3d 924, 928 (9th Cir. 2009). A misrepresentation is material if it involves facts that a reasonable person would consider important in choosing a course of action. See FTC v. Cyberspace.com LLC, 453 F.3d 1196, 1201 (9th Cir. 2006). Express claims are presumed material, so consumers are not required to question their veracity to be deemed reasonable. See Pantron I, 33 F.3d 1088, 1095-96 (9th Cir. 1994). Furthermore, the FTC need not prove reliance by each consumer misled by Defendants. See FTC v. SlimAmerica, Inc., 77 F.Supp.2d 1263, 1275 (S.D. Fla. 1999); FTC v. Figgie Int'l, Inc., 994 F.2d 595, 605 (9th Cir. 1993).

         In considering whether a claim is deceptive, the Court must consider the “net impression” created by the representation, even when the solicitation contains some truthful disclosures. See Cyberspace, 453 F.3d at 1200. The FTC need not prove that Defendants' misrepresentations were made with an intent to defraud or deceive or in bad faith. See, e.g., Removatron Int'l Corp. v. FTC, 884 F.2d 1489, 1495 (1st Cir. 1989); FTC v. World Travel Vacation Brokers, 861 F.2d 1020, 1029 (7th Cir. 1988). A representation is also deceptive if the maker of the representation lacks a reasonable basis for the claim. See FTC v. Direct Mktg. Concepts, Inc., 624 F.3d 1, 8 (1st Cir. 2010). Where the maker lacks adequate substantiation evidence, they necessarily lack any reasonable basis for the claims. Id. Furthermore, any disclaimers must be prominent and unambiguous to change the apparent meaning and leave an accurate impression. See Kraft, Inc. v. FTC, 970 F.2d 311, 325 (7th Cir. 1992). The FTC Act is violated if a seller “induces the first contact through deception, even if the buyer later becomes fully informed before entering the contract.” Resort Car Rental Sys., Inc. v. FTC, 518 F.2d 962, 964 (9th Cir. 1975).

         2) Misrepresentations Regarding Journal Publishing

         The FTC moves for summary judgment on the basis that no genuine dispute exists as to Defendants' deceptive journal publishing practices. (FTC's MSJ 43:7-44:10). The Court agrees. In their websites and email solicitations, Defendants represent that their journals follow standard peer review processes in the academic journal industry. (See SJX11 Admission No. 60); (SJX12 Admission Nos. 61-64); (SJX13 at 6-14); (SJX 15 at 4-8, 11-14); (See SJX1 Solicitation Email at 8); (SJX26 Att. Q at 576, 585, 588, 630, 698); (See PX12 Att. L at 657). Under standard industry practice, however, the peer review process takes several weeks/months and involves multiple rounds of substantive feedback from experts in that field. (SJX18 Backus Decl. ¶¶ 14-15). In this case, the FTC has submitted uncontroverted evidence showing that Defendants' peer review practices often took a matter of days and contained no comments or substantive feedback. (See SJX 26 Att. A at 20, 53, 69, 84, 86, 114). Although Defendants challenge the length of time required for peer review, Defendants fail to provide any evidence to support such a short review time. Furthermore, the FTC has submitted uncontroverted statements from purported “editors” indicating that they never even received manuscripts to review or else even agreed to be listed as an editor. (See PX02 Grace Decl. ¶¶ 4-7); (PX08 Howland Decl. ¶ 7); (PX11 Rusu Decl. ¶ 11).

         Defendants also expressly represent that their publications have high impact factors. (SJX26 Att. Q at 741-768); (PX12 Att. L 657, 691, 762, 766, 768-769, 881-935); (SJX15 Admissions Nos. 196, 197). The term impact factor is understood in the community to mean the annual calculation released by Thomson Reuters. (SJX18 Backus Decl. ¶ 16). In contrast, Defendants base their impact factor off a Google Scholar search. (See PX12 Att. L at 770); (SJX14 Admission No. 103); (SJX26 Att. P at 467, 763). Despite this deviation, Defendants repeatedly make misleading representations regarding their journals' impact factors without any qualification. (See SJX27 Email at 3); (See PX12 Att. L at 657, 762); (SJX26 Att. Q at 820). Furthermore, even when Defendants do provide a qualification, such statements are not prominently displayed. The mere fact that Defendants have some form of disclaimer does not alter the deceptive net impression. F.T.C. v. Johnson, 96 F.Supp.3d 1110, 1146 (D. Nev. 2015); See Kraft, 970 F.2d at 325.

         Defendants further represent that their publications are included in reputable indexing services, such as Medline and PubMed Central. (See PX10 Att. D at 16); (SJX26 Att. Q at 589, 820, 916, 923). These representations are rendered false by Defendants' own admissions. (See SJX07 Admission Nos. 13, 14); (SJX08 Admission Nos. 13, 14). Moreover, NLM itself refuses to index Defendants' publications due to questionable publishing practices. (See SJX18 ¶¶ 32-36, Att. B at 25, Att. C at 28, Att. D at 31, Att. E at 33-34). Despite NLM's requests to disassociate with Defendants, Defendants continue to misrepresent their inclusion in Medline and PubMed Central. (See PX10 Att. D at 16); (SJX26 Att. Q at 589). The uncontroverted evidence in the record therefore demonstrates that Defendants have made numerous express and material misrepresentations regarding their journal publishing practices. As Defendants have failed to raise any genuine issues of material fact, the Court grants the FTC summary judgment on this count.

         3) Misrepresentations Regarding ...


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