Federal Trade Commission v. Productive Marketing, Inc.

MEMORANDUM DECISION IN SUPPORT OF ORDER GRANTING PLAINTIFF’S MOTION FOR CONTEMPT

I. INTRODUCTION

On June 19, 2000, the Federal Trade Commission (“FTC”) initiated this action against defendants Productive Marketing (“Productive”), Foreclosure Solutions dba Formula Solutions (“Foreclosure”), and their principals, Matthew Hyman, Zachary Hyman, and Joshua Hyman (collectively, “Defendants”). The FTC’s Complaint charged Defendants with violating Section 5(a) of the Federal Trade Commission Act (“FTC Act”), which prohibits “[u]nfair methods of competition ... and unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C. § 45 (a)(1); Compl. ¶¶ 24-38. Citing Section 13(b) of the FTC Act, 15 U.S.C. § 53 (b), the government sought a preliminary injunction, permanent injunction, rescission, restitution, disgorgement, and appointment of a receiver. See Compl., at 10-11 (Prayer for Relief).

Concurrent with its Complaint, the FTC submitted an ex parte application for a temporary restraining order (“TRO”), asset freeze, appointment of a temporary receiver, immediate access to PMI’s business premises, limited expedited discovery, restitution, and disgorgement of profits. See…