UNITED STATES DISTRICT COURT 

MIDDLE DISTRICT OF FLORIDA 

TAMPA DIVISION 

FEDERAL TRADE COMMISSION 

Petitioner 

V. 

TRACERS INFORMATION 

SPECIALISTS, INC. 

Respondent 

ORDER 

THIS CAUSE came on to be heard upon the Petition of the 

Federal Trade Commission for an Order Enforcing Administrative 

Investigative Process (Doc. 1 ), the respondent's response (Doc. 6), and the 

petitioner's reply (Doc. 9). The FTC issued to Tracers Information 

Specialists, Inc., a civil investigative demand to answer interrogatories, 

produce documents, and provide oral testimony in connection with its 

investigation regarding whether Tracers' acquisition or sale of personal and 

consumer report information violates federal law. The respondent refuses to 

fully comply with the CID, objecting to many areas ofinquiry on the grounds 

of confidentiality, irrelevance, and undue burden. 

The objections will not be considered because the respondent 

failed to exhaust its administrative remedies in accordance with 15 U.S.C. 

CASE No.8: 16-MC-l 8TGW 

Case 8:16-mc-00018-VMC-TGW Document 17 Filed 06/10/16 Page 1 of 20 PageID 266 
57b-l(t) and 16 C.F.R. 2.10. Therefore, the Petition of the Federal Trade 

Commission for an Order Enforcing Administrative Investigative Process 

(Doc. 1) will be granted. 

I. 

The respondent, Tracers Information Specialists, Inc., provides 

its customers internet-based search services, such as searches ofbusiness and 

personal assets, court records, licenses, and personal identification 

information (e.g., social security number, birthdate, address) (Doc. 1-2, ,13). 

Its customers include debt collectors, law enforcement agencies, and 

attorneys (id.). 

The petitioner, Federal Trade Commission (FTC), opened an 

investigation into Tracers' business after a Tracers customer committed 

identity fraud using Social Security numbers that he obtained through 

Tracers' services (id.). Tracers is not implicated in the fraudulent conduct. 

Rather, the investigation seeks to determine whether Tracers' practices in the 

acquisition, handling, and sale of personal information and consumer report 

information violate the Federal Trade Commission Act or the Fair Credit 

Reporting Act (id., ,I,Il, 5). 

In this regard, the Commission issued to Tracers on August 20, 

2015, a civil investigative demand- a form of compulsory process-that 

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Case 8:16-mc-00018-VMC-TGW Document 17 Filed 06/10/16 Page 2 of 20 PageID 267 
give required Tracers to produce documents, answer interrogatories, and oral 

testimony regarding its products and services, its sources of information, 

costs, prices and profits, and its procedures for vetting new customers and 

auditing existing customers (CID) (Doc. 1-2, 18; Doc. 1-6). The CID 

required Tracers to produce the documents and answer the interrogatories by 

September 23, 2015 (Doc. 1-6). The front page of the CID also stated (id., p. 

2)': 

PETITION TO LIMIT OR QUASH 

The Commission's Rules of Practice require that 

any petition to limit or quash this demand be filed 

within 20 days after service, or, if the return date is 

less than 20 days after service, prior to the return 

date. The original and twelve copies of the petition 

must be filed with the Secretary of the Federal 

Trade Commission, and one copy should be sent to 

the Commission Counsel named in item 5. 

A detailed set of instructions accompanied the CID which, 

among other things, informed Tracers to "Meet and Confer" with the FTC in 

order to "discuss compliance and to address and attempt to resolve all issues" 

within 14 days after receipt of the CID, or before the deadline for filing a 

petition to quash, whichever is first (Doc. 1-6, p. 8, ~). The instructions 

included another paragraph discussing "Petitions to Limit or Quash," which 

'Citations refer the page numbers assigned by the CM/ECF system at the top of each page. to 

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reiterated the 20-day deadline, elaborated on the required contents of the 

petition, and advised that, absent extraordinary circumstances, the 

Commission would "consider only issues raised during the meet and confer 

process in the petition" (id., pp. 9-10, ~). 

On September 16, 2015, Tracers and FTC staff participated in a 

meet-and-confer session, during which Tracers sought modifications of 

certain requests as overly burdensome (Doc. 1-2, ,I IO; Doc. 6, p. 3, ,II 0). The 

FTC staff granted Tracers' requests to narrow the scope ofinformation sought 

in several interrogatories and document requests, and "[ c ]ounsel for Tracers 

had informed FTC staff by phone that these modifications would resolve 

Tracers' concerns about burden" (Doc. 1-2, ,II0). 

Tracers also requested a 30-day extension of time to respond to 

the CID, stating that changes in ownership and management since the 

issuance of the CID delayed its ability to respond (Doc. 1-2, ,I9). The FTC 

staff granted an extension through October 23, 2015 (Doc. 6, p. 4 ). The FTC 

subsequently granted Tracers' request for an additional thirty-day extension 

to November 23, 2015 (id., pp. 5-6, ,Il5). 

On November 23, 2015, Tracers submitted responses to some of 

the CID requests, but objected to providing several categories of documents 

and information on the grounds that the demands were overly burdensome, 

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irrelevant, and/or sought confidential and proprietary information (Doc. 1-2, 

,15; see Doc. 6, pp. 6-10). Tracers, however, did not file a petition to limit 

or quash the CID, or seek additional time to do so (see Doc. 1-2, ,14). 

Furthermore, the FTC states that Tracers asserted objections in its November 

response that Tracers was required to raise at the parties' meet and confer (see 

Doc. 1-2, ,13; Doc. 1-12, p. 3). 

In correspondence dated December 1, 2015, the FTC informed 

Tracers that its November 23, 2015, objections were "untimely and 

unpersuasive, and they do not excuse noncompliance with the CID's 

specifications" (Doc. 1-12, p. 2). The FTC stated (id., p. 3) (emphasis in 

original, footnote omitted): 

Under Commission rules, Tracers was required to 

file any objection to limit or quash the CID with 

the Secretary of the Commission no later than 

twenty days after service of the CID. See 16 

C.F.R. §2.l0(a)(l). Moreover, Tracers' failure to 

raise any relevance, vagueness, or confidentiality 

objections at the September 16 meet and confer is 

a further bar to these objections now. As 

memorialized in our letter of September 28, 

Tracers only raised objections to certain 

Interrogatories and Document Requests as overly 

burdensome, all of which we subsequently 

modified. 

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The FTC summarized, "Tracers [is] in default of its obligations to fully 

comply with the CID by the extended deadline ofNovember 23, 2015" (id., 

p. 4 ). However, it added that it would forbear from recommending the matter 

for enforcement in federal district court if Tracers provided the information 

demanded in the CID (id.). 

On December 16, 2015, Tracers informed FTC staff that it would 

not produce anything further without a court order (Doc. 1-2, 120). 

Furthermore, on January 7, 2016, Tracers submitted additional objections to 

the CID (id., 121 ). 

In February 2016, the FTC filed this Petition for an Order 

Enforcing Administrative Investigative Process (Doc. 1), arguing that 

Tracers' objections to the CID are untimely and meritless. See 15 U.S.C. 

57b-1 ( e) (the Commissioner is authorized to petition in the district court for 

an order enforcing the CID). Thereafter, Tracers was ordered to file a written 

response to the petition, and to appear on April 5, 2016, to show cause why 

the FTC's petition should not be granted (Doc. 2). 

Tracers argues in its opposition memorandum (Doc. 6) that the 

objections were timely and meritorious. In support of its position, Tracers 

submitted an affidavit from Terry Kilburn, an officer, shareholder, and 

director of Tracers (Doc. 6-5). The FTC, with leave of court, filed a reply 

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(Docs. 7, 9). The hearing was subsequently continued until May 2, 2016, 

upon Tracers' emergency motion (Doc. 11, 13 ). 

II. 

The FTC contends that Tracers' fai 1 ure to exhaust administrative 

remedies precludes Tracers from raising objections to the judicial 

enforcement of the CID (Doc. 1, pp. 14-16 ). This argument is meritorious. 

A CID may be challenged, in whole or in part, by filing a petition 

to quash or limit the CID with the Commission. 15 U.S.C. 57b-l (f). 

Specifically, the statute provides: 

(f) Petition for order modifying or setting aside demand 

( 1) Not later than 20 days after the service of any 

civil investigative demand ... or at any time before 

the return date specified in the demand, whichever 

period is shorter, or within such period exceeding 

20 days after service or in excess of such return 

date as may be prescribed in writing ... such person 

may file with the Commission a petition for an 

order by the Commission modifying or setting 

aside the demand. 

(2) The time permitted for compliance with the 

demand in whole or in part, as deemed proper and 

ordered by the Commission, shall not run during 

the pendency of such petition at the Commission, 

except that such person shall comply with any 

portions of the demand not sought to be modified 

or set aside. 

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See also 16 C.F.R. 2.1 O(b) ("The timely filing of a petition to limit or quash 

any Commission compulsory process shall stay the remaining amount of time 

permitted for compliance as to the portion or portions of the challenged 

specifications or provisions."). 

The implementing regulations set forth, in detail, the required 

contents of the Petition to Limit or Quash. Specifically, 16 C.F.R. 2.1 O(a)( I) 

states: 

Such petition shall set forth all assertions of 

protected status or other factual and legal 

objections to the Commission compulsory process, 

including all appropriate arguments, affidavits, and 

other supporting documentation. Such petition 

shall not exceed 5,000 words, including all 

headings, footnotes, and quotations, but excluding 

the cover, table of contents, table of authorities, 

glossaries, copies of the compulsory process order 

or excerpts thereof, appendices containing only 

sections of statutes or regulations, the statement 

required by paragraph (a)(2) of this section, and 

affidavits and other supporting documentation. 

Furthermore, 16 C.F.R. 2.7(k) provides that the recipient of the CID: 

shall meet and confer with Commission staff ... to 

discuss compliance and to address and attempt to 

resolve all issues .... The Commission will not 

consider petitions to quash or limit absent a 

pre-filing meet and confer session with 

Commission staff and, absent extraordinary 

circumstances, will consider only issues raised 

during the meet and confer process. 

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In sum, the statute and implementing regulations set forth a detailed 

administrative procedure by which a respondent may challenge a CID, in 

whole or in part. 

Tracers did not comply with the prescribed administrative 

procedure. Thus, it did not file a petition to quash or limit the CID, nor did 

it seek an extension of time to file a petition. See 16 C.F.R. 2.1 0(a)(5) 

(delegating the authority to rule upon requests for extensions of time within 

which to file petitions to limit or quash); 15 U.S.C. 57b-l (t)( I) (the petition 

may be filed in "excess of ... [the] return date as may be prescribed in 

writing"). Further, the FTC asserts that "the conclusory objections that 

Tracers offered at the production deadline were no substitute for a properly 

documented petition to limit or quash" (Doc. 9, p. 3). Consequently, the FTC 

argues that Tracers' objections should not be considered in this action. 

"The doctrine of exhaustion of administrative remedies is well 

established in the jurisprudence of administrative law." McKart v. United 

States, 395 U.S. 185, 193 ( 1969). "The doctrine provides that no one is 

entitled to judicial relief for a supposed or threatened injury until the 

prescribed administrative remedy has been exhausted." Id. (citation and 

quotations omitted). The Supreme Court elaborated Id. at 194-195: 

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Particularly, judicial review may be hindered by 

the failure of the litigant to allow the agency to 

make a factual record, or to exercise its discretion 

or apply its expertise. In addition, other 

justifications for requiring exhaustion in cases of 

this sort have nothing to do with the dangers of 

interruption of the administrative process. Certain 

very practical notions of judicial efficiency come 

into play as well. A complaining party may be 

successful in vindicating his rights in the 

administrative process. If he is required to pursue 

his administrative remedies, the courts may never 

have to intervene. And notions of administrative 

autonomy require that the agency be given a 

chance to discover and correct its own errors. 

Finally, it is possible that frequent and deliberate 

flouting of administrative processes could weaken 

the effectiveness of an agency by encouragmg 

people to ignore its procedures. 

Cf. Brown v. General Services Administration, 425 U.S. 820, 833 ( 1976) 

( exhaustion requirements and time limitations would be "driven out of 

currency" were immediate access to the courts permissible). 

This exhaustion requirement applies to FTC investigatory 

proceedings. United States v. Morton Salt Co., 338 U.S. 632, 653-54 ( 1950) 

(applying doctrine of administrative exhaustion in the context of the FTC 

administrative power); Casey v. Federal Trade Commission, 578 F.2d 793 

(9th Cir.1978); XYZ Law Firm v. Federal Trade Commission, 525 F. Supp. 

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1235, 1237 (N.D. Ga. 1981) ("The exhaustion requirement is applicable to 

FTC investigatory proceedings."). 

It therefore follows that Tracers' failure to comply with the 

administrative procedure provided by the statute and the implementing 

regulations bars its assertion of substantive objections to the CID in court. 

See EEOC v. Cuzzens of Georgia, Inc., 608 F .2d 1062, 1063 ( 5th Cir.1979) 

(recipient of compulsory process may not challenge judicial enforcement of 

that process when the recipient neglected to exhaust available administrative 

remedies); Federal Trade Commission v. O'Connell Associates, Inc., 828 F. 

Supp. 165, 170 (E.D.N.Y. 1993) (it is inappropriate to intervene and consider 

objections that could have been addressed by the administrative process). 

Tracers does not dispute the applicability of the exhaustion 

doctrine, but argues that it did exhaust its administrative remedies by stating 

its objections in the Responses to the Schedule for Interrogatories and 

Request to Produce, submitted on November 23, 2015, and in supplementary 

objections provided on January 7,2016 (Doc. 6, pp. 17-18; see Docs. 6-1 - 6-

4 ). In this regard, Tracers contends that the back page of the CID permits the 

filing of objections in lieu of a petition to quash or modify the CID (see Doc. 

6, pp. 2-3, ~5 (citing FTC Form 144-Back)). 

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The instruction form on the back of the CID is not the law and, 

therefore, it does not replace the administrative procedure provided under the 

statute and the implementing regulations. Regardless, the argument is 

unavailing, as the respondent clearly reads more into this form than is there. 

The CID directs that, "response[s] to this demand must be made 

under a sworn certificate, in the form printed on the second page of this 

demand ... " (Doc. l-6, p. 2). The second page, which is the back page of the 

CID (and the form upon which Tracers bases its argument) states the 

requirements of that certification (id., p. 3): 

Form of Certificate of Compliance 

I/We do certify that all of the documents and 

information required by the attached Civil 

Investigative Demand which are in the possession, 

custody, control, or knowledge of the person to 

whom the demand is directed have been submitted 

to a custodian named herein. 

If a document responsive to this Civil Investigative 

Demand has not been submitted, the objections to 

its submission and the reasons for the objection 

have been stated. 

If an interrogatory or a portion of the request has 

not been fully answered or a portion of the report 

has not been completed, the objection to such 

interrogatory or uncompleted portion and the 

reasons for the objections have been stated. 

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Case 8:16-mc-00018-VMC-TGW Document 17 Filed 06/10/16 Page 12 of 20 PageID 277 
Thus, the form simply directs the CID recipient to certify, under 

oath, that it has provided all information responsive to the CID, with the 

exception of those demands to which it has properly objected. This form does 

not indicate that objections may be submitted in lieu of filing a petition to 

limit or quash the CID. 

The instructions accompanying the CID confirm that the back 

page of the CID is nothing more than a sworn statement of compliance with 

the CID. Thus, under the CID Instructions it states (Doc. 1-6, p. I 0) 

( emphasis added): 

H. Certification: A responsible corporate officer 

shall certify that the response to this CID is 

complete. This certification shall be made in the 

form set out on the back of the CID form, or by a 

declaration under penalty of perjury as provided by 

28 u.s.c. § 1746. 

See also Doc. 1-6, p. 2 {The first page of the CID states under "Instructions 

and Notices" that "[t]he production of documents or the submission of 

answers and report in response to this demand must be made under a sworn 

certificate, in the form printed on the second page of this demand ... ").2 

2

Moreover, the statute specifies that, during the pendency of a petition to limit or 

quash, the time permitted for compliance with those portions of the CID shall not run. 15 

U .S.C. 57b-1 (f)(2). The respondent does not cite to a corresponding statutory stay of 

compliance with regard to objections generally, which also shows that this form does not 

permit objections in lieu of a petition to limit or quash a CID. 

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Accordingly, there is no merit to the contention that the instructions on the 

back page of the CID provide an alternative procedure to that established by 

the statute and regulations. 

Tracers argues further that"[ o ]bjections are likewise permitted 

in lieu of a response under 15 U.S.C. §57b-l(c)(l3)" (Doc. 6, pp. 2-3, 15). 

That provision, however, also pertains to the sworn certificate of compliance 

with the CID. It states: 

Each reporting requirement or question in a civil 

investigative demand shall be answered separately 

and fully in writing under oath, unless it is objected 

to, in which event the reasons for the objection 

shall be stated in lieu of an answer, and it shall be 

submitted under a sworn certificate, in such form 

as the demand designates, by the person, if a 

natural person, to whom the demand is directed or, 

if not a natural person, by any person responsible 

for answering each reporting requirement or 

question, to the effect that all information required 

by the demand and in the possession, custody, 

control, or knowledge of the person to whom the 

demand is directed has been submitted. 

Thus, this statute sets forth the requirement that reports and 

answers to questions be accompanied by a sworn certificate of compliance 

with the CID, and also specifies the format for responding to those matters. 

It does not indicate that an objection may be stated in lieu of filing a petition 

to quash or modify, nor does Tracers cite any legal authority supporting such 

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a contention (see Doc. 6). Contra Federal Trade Commission v. O'Connell 

Associates, Inc., supra, 828 F. Supp. at 169 (a petition to limit or quash is the 

exclusive means for a party to exhaust administrative remedies in response 

to a CID). To the contrary, the statute specifies that the CID recipient "shall 

comply with any portions of the demand not sought to be modified or set 

aside" in the petition. 15 U.S.C. 57b-l(t). 

Tracers' contention is clearly untenable when considering that 

the corresponding statutory subsections governing the production of 

documentary material and tangible things state the requirement for a sworn 

certificate of compliance, but do not mention objections. See 15 U.S.C. 57bl ( c )( 11 ), ( 12). Therefore, according to Tracers' argument, the statute permits 

objections to interrogatories in lieu of a petition to limit or quash, but there 

is no such option for objectionable documents and tangible things. Not only 

is this an unreasonable interpretation of the statute, it would leave Tracers 

without a legal justification for failing to file a petition to quash or limit 

regarding the documents it has refused to produce. 

Moreover, the Commission's administrative role, and the intent 

of the statute and implementing regulations, would be minimized, if not 

rendered meaningless, if a CID recipient could circumvent the rigorous 

requirements and time limitations set forth in the petition to quash or limit. 

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See United States v. Morton Salt Co., supra, 338 U.S. at 653-54 (1950); cf. 

Brown v. General Services Administration, supra, 425 U.S. at 833 (a statute's 

"rigorous administrative exhaustion requirements and time limitations would 

be 'driven out of currency' were immediate access to the courts under other, 

less demanding statutes permissible"). Thus, the petition to quash or limit 

was the method that Congress provided as the first step in challenging the 

CID, and the detail in this administrative process underscores the importance 

attributed to it. See 15 U.S.C. 57b-l (f); 16 C.F.R. 2.1 0(k); cf., Brown v. 

General Services Administration, supra, 425 U.S. at 833 ("It would require 

the suspension of disbelief to ascribe to Congress the design to allow its 

careful and thorough remedial scheme to be circumvented" by the plaintiffs 

argument). 

In this connection, the Commission avers that "Tracers' noncompliance with the CID has burdened, delayed, and impeded the 

Commission's investigation" (Doc. 1-2, ,f22). Thus, Tracers asserted its 

objections in a piecemeal manner; it raised some objections at the meet and 

confer in September, stated additional objections in its November 2015 

Responses, and submitted supplemental objections in January 2016. This is 

contrary to the strict statutory and regulatory time limits for the filing of a 

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petition to quash or limit, and the requirement that such petition be limited to 

those issues raised during the meet and confer. 

Furthermore, Tracers' boilerplate objections to many requests, 

and the filing of Kilburn 's affidavit in this litigation (which had not been 

presented to the Commission), do not comply with the administrative 

requirements that the petition include all appropriate arguments, affidavits 

and other supporting documentation. See 16 C.F.R. 2.7(k), 2.10(a)(l);l5 

U.S.C. 57b-l(t)(2). Therefore, Tracers' argument that the statute permits the 

objections process that it employed is unpersuasive because that process has 

obstructed the purpose of the statutory administrative procedure, which is the 

expedited and efficient resolution of the investigation. 

Additionally, Tracers argues that the FTC "waived" its 

contention that Tracers failed to exhaust its remedies because the FTC first 

mentioned in December 2015 that the deadline to file a petition to limit or 

quash a CID was 20 days after service of the CID (Doc. 6, pp. 10-11 ). This 

contention is baseless. 

"[W]aiver is the intentional relinquishment or abandonment of 

a known right." United States v. Olano, 507 U.S. 725, 733 (1993). Tracers 

has not identified any conduct by the FTC that constitutes waiver. Thus, the 

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FTC's silence regarding the deadline for filing the petition to limit or quash 

does not constitute waiver because it is not the intentional relinquishment or 

abandonment of a known right. See id.; see,~, EEOC v. Turner, 1994 WL 

779621 at *3 (D. N.M. 1994) (the County cannot rely on the EEOC's failure 

to disclose the existence of an administrative remedy to excuse failure to 

exhaust administrative remedies). 

Thus, it is Tracers' obligation to ascertain the applicable law. 

Heckler v. Community Health Services of Crawford Cty., Inc., 467 U.S. 51, 

63 (1984) ("the general rule [is] that those who deal with the Government are 

expected to know the law"); Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 

3 85 ( 194 7) ("Regulations [ a ]re binding ... regardless of actual knowledge of 

what is in the Regulations or of the hardship resulting from innocent 

ignorance."). This rule is especially apt in this case, where the front page of 

the CID states that the Petition to Limit or Quash must be filed within 20 days 

after service and cites the applicable statute, and the instructions 

accompanying the CID that repeat this information. 

Moreover, the Commission did not unduly delay informing 

Tracers that its objections were untimely, as the FTC states that it was not 

until "November 19, 2015, [that] Tracers informed FTC staff for the first time 

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that it intended to lodge objections to certain interrogatories and document 

requests and to withhold production of certain responsive documents" (Doc. 

1-2, ,114). Tracers documented those objections in its responses dated 

November 23, 2015 (id., ,Il5), and the FTC informed Tracers in 

correspondence dated December 1, 2015 - approximately one week later -

that those objections were untimely (Doc. 1-12, pp. 2-3). 

Finally, Tracers argues that, "[h]aving obtained extensions of 

time to respond to the requests at issue, Tracers likewise necessarily had 

extensions of time to raise objections" (Doc. 6, p. 18). The FTC granted 

Tracers two extensions of time to respond to the CID, meaning that the FTC 

"extended the deadlines ... for compliance" (Doc. 1-12, p. 2). Further, the 

FTC's correspondence specified that "[n]o other modifications of dates and 

terms set forth in the CID are intended or offered" (see,~' Doc. 1-9, p. 2). 

Thus, the correspondence did not purport to extend any deadline for objecting 

to the CID, which, as discussed, was to be presented in a petition to limit or 

quash. Furthermore, Tracers could have, but did not, request an extension of 

time to file a petition to limit or quash. Rather, as counsel stated at the 

hearing, he was attempting to set a conciliatory tone with the Commission, 

and resolve Tracers' objections to the CID informally. However, that failed 

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strategy cannot be remediated by arguing that a petition to limit the CID was 

optional. 

It is, therefore, upon consideration 

ORDERED: 

That the Petition of the Federal Trade Commission for an Order 

Enforcing Administrative Investigative Process (Doc. I) is hereby 

GRANTED. Tracers is ORDERED to fully comply with the CID in 30 days, 

or a date selected by the FTC, whichever is later. 

DONE and ORDERED at Tampa, Florida, this/a 1=%ay of June, 

2016. 

THOMAS G. WILSON 

UNITED STATES MAGISTRATE JUDGE 

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