Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_09-cv-03814/USCOURTS-cand-5_09-cv-03814-8/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:0053 Federal Trade Commission Act

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 NO. C 09‐03814 RS 

ORDER DENYING MOTION TO CERTIFY ORDER FOR INTERLOCUTORY REVIEW 

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United 

States District 

Court

For the Northern District of California 

*E-Filed 04/14/2010* 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

FEDERAL TRADE COMMISSION,

 Plaintiff, 

 v. 

SWISH MARKETING, et al., 

 Defendants. 

____________________________________/

No. C 09-03814 RS

ORDER DENYING MOTION TO 

CERTIFY ORDER FOR 

INTERLOCUTORY REVIEW 

I. INTRODUCTION 

Pursuant to 28 U.S.C. § 1292(b), the corporate and individual defendants (collectively, 

“Swish”) request certification for interlocutory review of this Court’s Order of February 22, 2010 

denying their motion to strike. Specifically, Swish seeks to appeal the Order’s determination that, 

as stated in FTC v. H.N. Singer, Inc., 668 F.2d 1107 (9th Cir. 1982), ancillary monetary relief is a 

remedy available under section 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 13(b) 

(1994). This matter is appropriate for resolution without oral argument, pursuant to Civil Local 

Rule 7-1(b). Because defendants have not demonstrated “exceptional circumstances” warrant 

immediate, interlocutory appeal, their motion will be denied. 

II. LEGAL STANDARD 

 As a general rule, a party may seek review of a district court’s rulings only after the entry of 

final judgment. In re Cement Litig., 673 F.2d 1020, 1027 (9th Cir. 1982). The district court may 

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under “exceptional” circumstances, however, certify an order for interlocutory review pursuant to 28 

U.S.C. § 1292(b). Id. at 1026 (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978) 

(holding that “exceptional circumstances [must] justify a departure from the basic policy of 

postponing appellate review until after the entry of a final judgment”)). Certification may be 

appropriate where: (1) the order involves a controlling question of law; (2) as to which there is 

substantial ground for difference of opinion; and (3) an immediate appeal from the order may 

materially advance the ultimate termination of the litigation. 28 U.S.C. § 1292(b). 

II. DISCUSSION 

A. Controlling Question of Law

 The Ninth Circuit has explained that a question of law is “controlling” if “resolution of the 

issue on appeal could materially affect the outcome of the litigation in the district court.” Cement 

Litig., 673 F.2d at 1026. It has also observed that section 1292(b) “was intended primarily as a 

means of expediting litigation by permitting appellate consideration during the early stages of 

litigation of legal questions which, if decided in favor of the appellant, would end the lawsuit.” 

United States v. Woodbury, 263 F.2d 784, 787 (9th Cir. 1959) (“Examples of such questions are 

those relating to jurisdiction or a statute of limitations which the district court has decided in a 

manner which keeps the litigation alive but which, if answered differently on appeal, would 

terminate the case.”). That said, the issue need not be dispositive of the lawsuit to be controlling. 

Id. The Ninth Circuit has reasoned that even issues collateral to the merits may be the subject of 

interlocutory appeal if immediate resolution would avoid “needless expense and delay.” Kuehner v. 

Dickinson & Co., 84 F.3d 316, 319 (9th Cir. 1996) (finding resolution of admittedly “collateral” 

issue of whether arbitration was required involved “controlling” legal issue where district court’s 

construction risked “litigating an entire case in a forum that has no power to decide the matter”) 

(citing Cement Litig., 673 F.2d at 1027 n.5). 

 Defendants somewhat boldly contend that the Circuit’s reexamination of its Singer analysis 

would end the litigation. This seems at best a hopeful forecast. Before this Court may even reach 

the question of an appropriate remedy, the FTC must first establish defendants’ liability. And, even 

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were the Circuit to chart a new course with regard to the availability of equitable remedies under 

Section 13(b), left for decision would remain the Commission’s request for non-monetary injunctive 

relief expressly contemplated in that section. Despite corporate defendants’ assurances that they 

have voluntarily discontinued the allegedly wrongful acts, their promises alone do not bar the 

possibility for injunctive relief. As the Supreme Court has insisted, without the clear resolution of 

the legality of a practice or clear proof of abandonment, “the defendant is free to return to his ways.” 

United States v. W.T. Grant Co., 345 U.S. 629, 632 (1953). The possibility for purely injunctive 

relief still presents a live controversy, even assuming defendants correctly predict that the Circuit 

would reverse its own precedent and deny the availability of restitution under section 13(b). 

On the other hand, assuming the arguments advanced by defendants were sufficiently 

compelling to persuade the Circuit to abandon Singer and its progeny, common sense dictates that 

the time and expense spent litigating a fitting amount of restitution would be needless. Defendants 

correctly reason that an immediate appeal would, if successful, preclude this possibility. The 

problem with defendants’ rationale, however, is that—in the name of avoiding costly litigation—it 

ignores the chance that this Court might resolve the matter at the liability phase. And, should the 

Circuit uphold Singer, interlocutory appeal threatens to impose—not avoid—delay. As one of the 

central aims of section 1298(b) is to avoid unnecessary proceedings before a district court, the 

controlling issue of law criterion should, at a minimum, require that reversal have some immediate 

effect on the course of litigation and result in some savings of resources. See Note, Interlocutory 

Appeals in the Federal Courts Under 28 U.S.C. § 1292(b), 88 Harv. L. Rev. 607, 619 (1975). 

Defendants have not persuasively demonstrated either immediate effect or a sufficient likelihood of 

resource conservation. 

B. Substantial Grounds for Difference of Opinion

 A party’s disagreement—no matter how strongly held—with a court’s ruling is not sufficient 

by itself to establish a substantial ground for difference of opinion as contemplated by Section 

1292(b). See, e.g., Wilton-Miwok Rancheria, 2010 WL 693420 at *12 (N.D. Cal. Feb. 23, 2010); 

Mateo v. The M/S Kiso, 805 F. Supp. 792, 800 (N.D. Cal. 1992). Substantial grounds for 

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disagreement may exist, for example, where there is “a dearth of precedent within the controlling 

jurisdiction and conflicting decisions in other circuits.” Wilton-Miwok, 2010 WL at * 12 (quoting 

APCC Servs., Inc. v. AT&T Corp., 297 F. Supp. 2d 101, 107 (D.D.C. 2003)). 

Defendants do not dispute that ample controlling precedent in this Circuit favors the award 

of restitutionary relief under section 13(b). They introduce no contrary, on-point authority 

(appellate or otherwise) from outside the Circuit. Swish argues solely that the Supreme Court’s 

approach to the availability of statutory equitable relief under an environmental regulatory scheme 

in Meghrig v. K.F.C. Western, Inc., 516 U.S. 479 (1996), undermines two earlier opinions: Porter v. 

Warner Holding Co., 328 U.S. 395 (1946) and Mitchell v. Robert De Mario Jewelry, Inc., 361 U.S. 

288 (1960). Because the Circuit in Singer relied on Porter and Mitchell for the proposition that a 

district court may award monetary relief ancillary to a permanent injunction under section 13(b) of 

the FTC Act, Swish reasons that Meghrig undermines Singer, as well. 

Taken together, Porter and Mitchell authorize a district court sitting in equity to grant broad 

equitable relief, including restitution. When Congress invokes the district court’s equitable 

jurisdiction in a statute, Porter held, “all the inherent equitable powers of the district court are 

available for the proper and complete exercise of that jurisdiction.” 328 U.S. at 398. Meghrig did 

not overrule Porter and Mitchell, but did find that a citizen-suit provision that expressly 

contemplated only the “restraint” of violations of the Resource Conservation and Recovery Act 

(“RCRA”) did not authorize restitution for past toxic cleanup costs. Meghrig, 516 U.S. at 481. 

Meghrig compared RCRA’s citizen-suit provision to its analogue in the Comprehensive 

Environmental Response, Compensation and Liability Act (“CERCLA”). Unlike RCRA, 

CERCLA’s provisions expressly allowed “any person [to] seek contribution from any other person 

who is liable.” 42 U.S.C. § 9613(f)(1). The Court explained: “[w]here Congress has provided 

‘elaborate enforcement provisions’ for remedying the violation of a federal statute, it cannot be 

assumed that Congress intended to authorize by implication additional judicial remedies for private 

citizens suing under the statute.” 516 U.S. at 487-88. Following Meghrig, the D.C. Circuit in 

Phillip Morris, 396 F.3d 1190 (D.C. Cir. 2005), refused to award disgorgement under a civil RICO 

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provision that also only contemplated “restraint” and where a monetary remedy was expressly 

available elsewhere in the statutory scheme. The Tenth Circuit, by contrast, examined a statutory 

provision with similar language in light of both Meghrig and Porter / Mitchell, but applied the latter. 

United States v. Rx Depot, 438 F.3d 1052 (10th Cir. 2006). 

Against this backdrop, defendants suggest “substantial grounds for disagreement” arise with 

regard to the continuing vitality of Singer. While the ultimate effect of Meghrig is certainly an 

academically intriguing issue, it is not obvious that Meghrig’s analysis must be deployed against 

section 13(b) nor does there appear to be virtually any inkling or hint in this Circuit or in others that 

it should. The Ninth Circuit (and, as plaintiffs point out, every circuit to consider the question) has 

consistently applied the Singer rationale to grants of restitutionary relief under section 13(b). See, 

e.g., FTC v. Pantron I Corp., 33 F.3d 1088, 1102 (9th Cir. 1994) (citing Singer for the proposition 

that a district court may award monetary relief under section 13(b)); FTC v. Silueta Distribs., Inc., 

No. 93-4141, 1995 WL 215313, at *7-8 (N.D. Cal. Feb. 24, 1995) (citing both Singer and Pantron I

and ordering disgorgement under section 13(b)). This Circuit has even done so as recently as 2009, 

where a Meghrig argument was at least arguably available. FTC v. Stefanchik, 559 F.3d 924, 931-

32 (9th Cir. 2009). 

C. Immediate Appeal May Not Materially Advance the Ultimate Termination of Litigation 

 As the Commission points out, it must first prove a violation of section 5 of the FTC Act 

before the court may address an appropriate remedy. An immediate appeal at this stage would 

obviously delay resolution of the liability phase. Without commenting on the merits, it is still 

theoretically possible to resolve the matter at the liability phase without ever reaching the remedy. 

Given the timing of the suit, then, granting Swish’s plea for immediate, interlocutory review would 

seem to carry with it a greater risk for delay than its promise for ultimate savings of both time and 

resources. Moreover, defendants advance no argument that appellate review of this Court’s final 

judgment, should it favor the plaintiffs, would impose a harm more exquisite than that “suffered by 

any litigant forced to wait until the termination of the trial before challenging . . . orders [they] 

consider[] erroneous.” Firestone Tire & Rubber Co. v. Rijsford, 449 U.S. 368, 378 n.13 (1981). 

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III. CONCLUSION 

“Exceptional circumstances” must “justify a departure from the basic policy of postponing 

appellate review until after the entry of a final judgment.” Coopers & Lybrand v. Livestay, 437 U.S. 

463, 475 (1978). Defendants have shown no such “exceptional circumstances” here nor have they 

demonstrated that immediate, interlocutory review pursuant to section 1292(b) is necessary or 

appropriate. Defendants’ motion for certification is therefore denied. 

IT IS SO ORDERED. 

Dated: 04/14/2010 

RICHARD SEEBORG 

UNITED STATES DISTRICT JUDGE 

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