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FTC v. A.S. Research, LLC

United States District Court for the District of Colorado

July 21, 2020, Decided; July 21, 2020, Filed

Civil Action No. 19-cv-03423-PAB-KMT

Opinion

ORDER

This matter is before the Court on the Motion to Withdraw Consent and Opposition to Application in Light of COVID-19 [Docket No. 8]. Defendants seek to withdraw their consent to the Stipulated Agreement [Docket No. 2-1] for a permanent injunction and other equitable relief. Docket No. 8 at 7. Plaintiff responded in opposition to defendants' motion to withdraw consent on May 6, 2020, Docket No. 14, and defendants replied on May 15, 2020. Docket No. 17.

On December 5, 2019 plaintiff filed a Complaint for Permanent Injunction and Other Equitable [*2]  Relief [Docket No. 1] alleging that defendants engaged in unfair or deceptive acts in violation of the FTC Act, 15 U.S.C. § 45(a), in the course of marketing and promoting the drug Synovia. Docket No. 1 at 16, ¶¶ 17-19. Specifically, plaintiff alleges that defendants made false or misleading representations concerning the drug's effectiveness, fabricated customer testimonials, and made misrepresentations concerning expert endorsements of the drug. See, e.g., id. at 17-22, ¶¶ 21-22, 27, 30-31, 36-37. Along with its complaint, plaintiff filed an Unopposed Motion for Entry of Proposed Stipulated Order for Permanent Injunction and Monetary Judgment. Docket No. 2. Plaintiff represents that, "[p]rior to the complaint filing, the FTC and Defendants agreed to the attached proposed Stipulated Order for Permanent Injunction and Monetary Judgment . . . which resolves all matters in dispute in action between them." Id. at 1.

Despite the parties' Stipulated Agreement for a permanent injunction, Docket No. 2-1, defendants now indicate that they no longer agree to the terms to which they previously assented. See Docket No. 8. Defendants state that "COVID-19 has resulted in the parties' objectives being impossible to meet and the obligations [*3]  of [defendants] under the [Stipulated Agreement] impossible to perform in a timely fashion, or to perform at all, compared to the parties' expectations at the time" the parties entered into their settlement agreement. Id. at 4, ¶ 24. Defendants request that the Court "refrain from signing off and ordering the [Stipulated Agreement] proffered by the FTC with the prior consent of the Defendants and direct the parties to collaboratively re-address the monetary sanctions imposed therein, or to otherwise have the Court issue the [Stipulated Agreement] with amended financial sanctions imposed in an amount this Court deems just and appropriate given the circumstances involved." Docket No. 8 at 7.1 Plaintiff opposes this request, arguing that defendants' motion contravenes the parties' agreement and that plaintiff will be deprived of the benefit of its bargain in entering the agreement should the agreement not be enforced as written. Docket No. 14 at 2.

"Generally, a 'trial court has the power to summarily enforce a settlement agreement entered into by the litigants while litigation is pending before it.'" Mitchell v. Estrada, No. 03-cv-00387-PAB-MJW, 2013 U.S. Dist. LEXIS 120230, 2013 WL 4502268, at *2 (D. Colo. Aug. 23, 2013)

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2020 U.S. Dist. LEXIS 128182 *; 2020-2 Trade Cas. (CCH) P81,299

FEDERAL TRADE COMMISSION, Plaintiff, v. A.S. RESEARCH, LLC, also d/b/a ASR and APPLIED SCIENTIFIC RESEARCH LABS, a limited liability company, STEPHEN J. YOUNG, individually and as an owner and officer of A.S. RESEARCH, LLC, and MICHAEL K. LEDEBOER, individually and as an owner and officer of A.S. RESEARCH, LLC, Defendants.

Subsequent History: Later proceeding at FTC v. A.S. Research, LLC, 2020 U.S. Dist. LEXIS 133123 (D. Colo., July 23, 2020)

CORE TERMS

settlement, Injunction, frustrated, Permanent, withdraw, Monetary, bargain, impossibility-of-performance, frustration-of-purpose, Equitable, summarily, assented, replied