UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSIO 

Washington, D.C. 

COMMISSIONERS: Joseph Simons, Chairman 

Rohit Chopra 

In the Matter of: 

Noah Phillips 

Rebecca Slaughter 

Christine Wilson 

Raging Wire Data Centers, Inc., DOCKET NO. 9386 

a corporation. 

RAGINGWIRE DATA CENTERS, LLC'S 

MOTION TO DISMISS ADMINISTRATIVE COMPLAINT 

AND 

REQUEST FOR STAY AND REFERRAL 

Corey W. Roush 

C. Fairley Spillman 

Diana E. Schaffner 

AKIN GUMP STRAUSS HAUER & FELD LLP 

2001 K. Street, N.W. 

Washington, DC 20006 

(202) 887-4000 

Counsel for Respondent 
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Pursuant to Rule 3.22 of the Commission’s Rules of Practice for Adjudicative 

Proceedings (16 CFR § 3.22), Respondent RagingWire Data Centers, Inc. seeks dismissal of this 

matter for failure to state a claim for violation of Section 5(a) of the Federal Trade Commission 

Act, 15 U.S.C. § 45. RagingWire further requests that the Commission stay further proceedings 

in this matter pending decision on the motion to dismiss. In addition, RagingWire asks that the 

Commission exercise its discretion to refer this motion to the Administrative Law Judge for 

decision.

I. BACKGROUND

The Complaint asserts that RagingWire engaged in a deceptive practice in violation of

Section 5(a). See Complaint [“Compl.”] ¶ 46. Although four separate “counts” are alleged, each 

count arises out of the same underlying alleged misrepresentation—that RagingWire’s website 

contained a statement that RagingWire was compliant with the EU-U.S. Privacy Shield 

Framework during a period in which RagingWire’s Privacy Shield certification had lapsed. Id.

at ¶ 20. The Complaint acknowledges that RagingWire’s Privacy Shield certification has been 

restored. Id. at ¶ 24. Therefore, the Complaint on its face makes clear that there is no on-going 

issue.

In the investigation in this matter, RagingWire explained the unfortunate circumstances 

giving rise to the lapse in its Privacy Shield certification. RagingWire also explained that it is in 

the business of providing physical spaces to house servers owned and operated by its customers,

and that RagingWire is not itself in the data business and does not have access to data on its 

customers’ servers. The Complaint acknowledges the nature of RagingWire’s business, but fails 

to come to terms with its implications. Id. at ¶ 2. Regardless of whether RagingWire incorrectly 

indicated that it was compliant with the Privacy Shield Framework, any such representation was 
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not and could not have been material to RagingWire’s customers, and the Complaint fails to 

allege otherwise. 

II. THE COMPLAINT FAILS TO STATE A SECTION 5 VIOLATION AND 

SHOULD BE DISMISSED

In evaluating motions to dismiss administrative complaints, the Commission uses the 

standards a reviewing court would apply in assessing a motion to dismiss for failure to state a 

claim under Fed. R. Civ. P. 12(b)(6). In re LabMD, Inc., 2014 FTC LEXIS 2 *5; 2014-1 Trade 

Cas. (CCH) P78,784; see also S.C. State Bd. of Dentistry, 138 F.T.C. 230, 232-33 (2004); Union 

Oil Co., 138 F.T.C. 1, 16 (2004). Under Rule 12(b)(6), dismissal is required when the complaint 

fails to plead an element of the cause of action. See, e.g., Harris v. D.C. Water & Sewer Auth., 

791 F.3d 65, 69, 416 U.S. App. D.C. 242 (D.C. Cir. 2015) (stating that a complaint must allege 

sufficient facts of each element of claim to survive motion to dismiss); Gomez v. Quicken Loans, 

Inc. 629 Fed. Appx. 799, 802 (9th Cir. 2015) (finding that the plaintiff failed to allege the first 

element of his claim and upholding the district court's order granting defendant’s 12(b) (6) 

motion). In assessing the adequacy of a complaint, the question is “whether the [Complaint] 

contains sufficient factual matter . . . to state a claim to relief that is plausible on its face." 

LabMD., 2014 FTC LEXIS at *6, citing Resnick v. AvMed, Inc., 693 F.3d 1317, 1326 (11th Cir. 

2010) (citation omitted). Under these standards, the Complaint fails to plead a Section 5(a) 

deception violation and, therefore, must be dismissed. 

There are three elements “that undergird all [Section 5(a)] deception cases”: (1) a

representation, omission or practice that is likely to mislead the consumer; (2) the Commission 

must examine the practice from the perspective of a reasonable consumer; and (3) the 

representation, omission or practice must be a “material” one. FTC Policy Statement on 

Deception, appended to Cliffdale Associates, 103 FTC 110, 174 (1984); see also In re Jerk, LLC, 
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2015 FTC LEXIS 64, *40 (March 13, 2015) (“A false or misleading representation will violate 

Section 5 only if it is also ‘material,’ that is, if it is likely to affect a consumer’s conduct with 

respect to the product or service.”) (internal quotation omitted). 

The Complaint against RagingWire does not allege the required element of materiality. It 

does not even contain the words “material” or “materiality,” nor does it allege any facts that 

could support a finding of materiality. 

Materiality would exist in this case only if the alleged misrepresentation were a material 

factor in customers’ decisions to utilize RagingWire’s services. See American Home Products 

Corp., 98 F.T.C. 136, 368 (1981), aff'd, 695 F.2d 681 (3d Cir. 1982) (“A misleading claim or 

omission in advertising will violate Section 5 . . ., only if the omitted information would be a 

material factor in the consumer’s decision to purchase the product.”). The Complaint does not 

allege that Privacy Shield compliance is important to Raging Wire customers or that the Privacy 

Shield certification impacted any customer’s purchasing decision. 

Furthermore, as acknowledged in the Complaint, Privacy Shield is “a mechanism to 

comply with data protection requirements when transferring personal data from the European 

Union . . . to the United States.”1

 Compl. ¶ 5. The Complaint does not allege that RagingWire 

has any locations in Europe or that RagingWire accesses, let alone transfers, any data, personal 

or otherwise. 

The Complaint alleges that “RagingWire customers that collect or process personal 

information from the EEA and want to transfer that data to RagingWire in the U.S. can comply 

with GDPR and/or their own Privacy Shield obligations if RagingWire participates in Privacy 

Shield.” Id. at ¶ 16. However, the Complaint does not allege that there are, in fact, customers 

 

1 Privacy Shield, “Welcome to The Privacy Shield,” https://www.privacyshield.gov/welcome (last accessed Nov. 16, 

2019). 
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that want to or do transfer protected data to RagingWire or use RagingWire to transfer data into 

(or out of) the United States. In light of the nature of RagingWire’s business, there is no reason 

to believe that such customers exist. As the Complaint acknowledges, RagingWire simply 

provides physical locations to house servers. Id. at ¶ 2. RagingWire customers care about the 

physical security of its locations (e.g., perimeter fences, locked doors, crash barriers), the 

resilience and redundancy of its electrical and other support systems (e.g., the power will stay on 

even if there is a power outage), and the physical location of its data centers (e.g., how close is 

the data center to the client’s operations center). Even taking all allegations in the Complaint as 

true and construing them in the light most favorable to Complaint Counsel,2

 nothing in the 

Complaint provides a plausible basis for concluding that a misrepresentation concerning Privacy 

Shield compliance would be material to RagingWire’s customers. 

 Because the Complaint fails to allege a material misrepresentation, it fails to state a 

Section 5(a) deception violation and must be dismissed. 

III. PROCEEDINGS SHOULD BE STAYED PENDING DECISION ON THE

MOTION TO DISMISS

Particularly in light of the serious deficiency with the Complaint, the Commission should

stay further proceedings in this matter pending resolution of the motion to dismiss. As the 

Complaint acknowledges, the lapse in Privacy Shield certification has ended. Id. at ¶ 24. There 

is no reason, alleged in the Complaint or otherwise, to anticipate future non-compliance, 

particularly in light of the unusual personnel issues that lead to the lapse in certification. 

Respondent has acted in good faith in all of its practices, including in the initial posting of the 

Privacy Shield statement. See Id. at ¶ 17-18. Respondent took affirmative steps to comply with 

2 See LabMD, 2014 FTC LEXIS at *6, citing Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 

2010).
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Privacy Shield and took down the statement once it learned of the issue. Id. at ¶ 23. There is no 

pressing need for expedition in this matter, and a stay will avoid wasting the resources of the 

Commission, the FTC, and RagingWire. 

IV. REQUEST TO REFER MOTION TO ADMINISTRATIVE LAW JUDGE

Rule 3.22 recognizes the Commission’s discretion to refer a motion to dismiss to the

Administrative Law Judge. RagingWire respectfully requests that the Commission do so here 

given that the same five Commissioners who voted to file the Complaint would be reviewing this 

motion making a dispassionate ruling based on the law (as opposed to their discretionary 

judgment on whether to bring the case) difficult. 

WHEREFORE, Respondent requests that the Complaint be dismissed in its entirety with 

prejudice, or alternatively without prejudice. Respondent further requests that the Commission 

stay proceedings in this matter pending a decision on the motion to dismiss and refer the motion 

to the ALJ for decision. 

Dated: December 2, 2019 Respectfully submitted,

/s/ Corey W. Roush 

Corey W. Roush 

C. Fairley Spillman

Diana E. Schaffner

AKIN GUMP STRAUSS HAUER & FELD LLP

2001 K. Street, N.W.

Washington, DC 20006

(202) 887-4000

Counsel for Respondent 
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CERTIFICATE OF SERVICE

I certify that on December 2, 2019, a copy of the foregoing Motion to Dismiss and 

Request for Stay and Referral of Respondent RagingWire Data Centers, Inc. was electronically 

filed using the Commission’s Electronic Filing System and was sent by that system and by 

certified mail to the following:

Donald S. Clark, Secretary 

Federal Trade Commission

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

I certify that that a copy of the foregoing has been served upon all parties to this cause by 

electronic mail as follows:

Linda Kopp Robin Wetherill 

Federal Trade Commission Federal Trade Commission

600 Pennsylvania Avenue, N.W. 600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 Washington, D.C. 20580 

lkopp@ftc.gov rwetherill@ftc.gov 

Dated: December 2, 2019 By: /s/ Corey W. Roush 
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UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

Washington, D.C. 

COMMISSIONERS: Joseph Simons, Chairman 

Rohit Chopra

Noah Phillips

Rebecca Slaughter

Christine Wilson

In the Matter of:

RagingWire Data Centers, Inc., 

a corporation. 

DOCKET NO. 9386 

[PROPOSED] ORDER DISMISSING COMPLAINT

This matter comes before the Commission on Respondent’s Motion to Dismiss Complaint. 

Having considered the motion, it is hereby 

ORDERED, that the Motion to Dismiss Complaint is granted and that the complaint be 

dismissed.

By the Commission.

ISSUED: _______________________ _______________________ 

Donald S. Clark, Secretary 

Federal Trade Commission 600 

Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 
9

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

Washington, D.C. 

COMMISSIONERS: Joseph Simons, Chairman 

Rohit Chopra

Noah Phillips

Rebecca Slaughter

Christine Wilson

In the Matter of:

RagingWire Data Centers, Inc., 

a corporation. 

DOCKET NO. 9386 

[PROPOSED] ORDER STAYING PROCEEDINGS AND REFERRING MOTION TO 

ADMINISTRATIVE LAW JUDGE

This matter comes before the Commission on Respondent’s Request for Stay and Referral. 

Having considered the request, it is hereby

ORDERED, that the Request for Stay and Referral is granted and that further proceedings 

in this matter are stayed, pending a decision by the Administrative Law Judge to whom 

Respondent's Motion to Dismiss is referred. 

By the Commission. 

ISSUED: _______________________ _______________________ 

Donald S. Clark, Secretary 

Federal Trade Commission 600 

Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 
Notice of Electronic Service 

I hereby certify that on December 02, 2019, I filed an electronic copy of the foregoing RAGINGWIRE DATA 

CENTERS, LLC’S MOTION TO DISMISS ADMINISTRATIVE COMPLAINT AND REQUEST FOR STAY 

AND REFERRAL, with: 

D. Michael Chappell 

Chief Administrative Law Judge 

600 Pennsylvania Ave., NW 

Suite 110 

Washington, DC, 20580 

Donald Clark 

600 Pennsylvania Ave., NW 

Suite 172 

Washington, DC, 20580 

I hereby certify that on December 02, 2019, I served via E-Service an electronic copy of the foregoing 

RAGINGWIRE DATA CENTERS, LLC’S MOTION TO DISMISS ADMINISTRATIVE COMPLAINT AND 

REQUEST FOR STAY AND REFERRAL, upon: 

Linda Kopp 

Federal Trade Commission 

lkopp@ftc.gov 

Complaint 

Robin Wetherill 

Federal Trade Commission 

rwetherill@ftc.gov 

Complaint 

Corey Roush 

Partner 

Akin Gump Strauss Hauer & Feld LLP 

croush@akingump.com 

Respondent 

C. Fairley Spillman 

Partner 

Akin Gump Strauss Hauer & Feld LLP 

fspillman@akingump.com 

Respondent 

Diana Schaffner 

Akin Gump Strauss Hauer & Feld LLP 

dschaffner@akingump.com 

Respondent 

Corey Roush 

Attorney