Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-02246/USCOURTS-azd-2_12-cv-02246-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:0045 Federal Trade Commission Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Federal Trade Commission, 

Plaintiff, 

vs.

ELH Consulting, LLC, et al., 

Defendants. 

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No. CV 12-02246-PHX-FJM

ORDER

We have before us defendants' request for jury trial (doc. 43), plaintiff's motion to

strike defendants' jury demand (doc. 44), plaintiff's memorandum in support of the motion

to strike (doc. 45), defendants' response (doc. 47), and plaintiff's reply (doc. 48). 

On October 22, 2012, the Federal Trade Commission ("FTC") filed a complaint

seeking equitable preliminary and permanent injunctive relief, rescission of contracts,

restitution, disgorgement, and other equitable relief under sections 13(b) and 19 of the

Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b) and 57(b), and the

Telemarketing and Consumer Fraud and Abuse Prevention Act ("Telemarketing Act"). We

granted the FTC's request for a temporary restraining order. Defendants now request a jury

trial pursuant to Fed. R. Civ. P. 38. The FTC argues that defendants' demand for jury trial

should be stricken because the FTC seeks only equitable relief, and there is no right to a jury

in an equitable action. 

Case 2:12-cv-02246-FJM Document 55 Filed 02/07/13 Page 1 of 3
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Pursuant to Fed. R. Civ. P. 38, a party has “[t]he right of trial by jury as declared by

the Seventh Amendment to the Constitution—or as provided by federal statute[.]" Here,

neither the FTC Act nor the Telemarketing Act provides for a jury trial. The Seventh

Amendment "preserves the right to trial by jury of all legal claims," but "'no right to a jury

exists' for equitable claims." Danjaq LLC v. Sony Corp., 263 F.3d 942, 962 (9th Cir. 2001)

(citations omitted). Defendants concede that they are not entitled to a jury trial on the FTC's

equitable claims. Defendants' Response at 3. 

Defendants argue, however, that they are entitled to a jury trial because the FTC seeks

a legal remedy. Defendants rely on Great-West Life & Annuity Ins. Co. v. Knudson, 534

U.S. 204, 122 S. Ct. 708 (2002) to argue that the FTC's claims are for legal restitution

because they seek to recover funds that have been commingled with defendants' general

assets. In Great-West, the Court held that plaintiffs sought legal relief where they imposed

personal liability on defendants for a contractual obligation to pay money. Id. at 221, 122

S. Ct. at 719. In contrast, the Court found that restitution lies in equity where plaintiff seeks

to "restore to the plaintiff particular funds or property in the defendant's possession." Id. at

214, 122 S. Ct. at 715. Here, the FTC does not seek to impose personal liability for a

contractual obligation. Instead, the FTC seeks relief based on the court's equitable powers

to "redress injury to consumers resulting from Defendants' violations of the FTC Act and the

[Telemarketing Act]." Therefore, the FTC's claims lie in equitable, not legal, restitution. 

Defendants next contend that the FTC's request for "refund of monies paid" is a form

of legal restitution. However, "[t]he award of monetary relief is not necessarily always

legal." Smith v. Barton, 914 F.2d 1330, 1337 (9th Cir. 1990) (citations omitted). For

example, damages are equitable where, as here, they are in "action[s] for disgorgement of

improper profits." Id. (quotation omitted). Accordingly, the FTC seeks equitable relief, and

thus defendants are not entitled to a jury trial. This is not an action for damages. 

Moreover, weighing carefully the interests of justice and the interests of judicial

economy, we decline to impanel an advisory jury under Rule 39(c), Fed. R. Civ. P., to hear

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any claims in this action. An advisory jury would add needless complexity with no attendant

benefit.

IT IS ORDERED GRANTING plaintiff's motion to strike defendants' jury

demand (doc. 44).

DATED this 6th day of February, 2013.

Case 2:12-cv-02246-FJM Document 55 Filed 02/07/13 Page 3 of 3