Case 8:20-cv-01431-PSG-KES Document 212 Filed 04/06/22 Page 1 of 16 Page ID #:8396 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

#134/135/168/169/192/197/207/210

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

Present: The Honorable Philip S. Gutierrez, United States District Judge 

Wendy Hernandez Not Reported 

Deputy Clerk Court Reporter 

Attorneys Present for Plaintiff(s): Attorneys Present for Defendant(s): 

Not Present Not Present 

Proceedings (In Chambers): Order GRANTING the FTC’s motion for summary judgment 

and DENYING Defendants’ motion for partial summary 

judgment 

Before the Court are two motions for summary judgment. Plaintiff, the Federal Trade 

Commission (“FTC”), filed a motion for summary judgment. See generally Dkt. # 168 (“Mot. 

I”). Defendants QYK Brands LLC d/b/a Glowyy (“QYK”); DRJSNATURAL LLC (“Dr. J’s 

Natural”); Rakesh Tammabattula (“Tammabattula”); Jacqueline Thao Nguyen a/k/a Dr. J (“Dr. 

J”); EASII, Inc. (“EASII”); and Theo Pharmaceuticals, Inc. (“Theo”) (collectively, 

“Defendants”) opposed.1 See generally Dkt. # 198 (“Opp. I”). The FTC replied.2 See generally 

1

 The FTC and Defendants both filed motions to exceed the 25-page limit set by the Local Rules. 

See generally Dkts. # 134, 197. The length of the briefing is unsurprising given the voluminous 

and unfiltered state of the FTC’s supporting evidence. But because neither motion to exceed the 

page limit was opposed, the Court GRANTS both motions and accepts as filed both the FTC’s 

motion and Defendants’ opposition. 

2

 The FTC also filed a 25-page reply. It subsequently realized that the Court’s Standing Order 

requires reply briefs not to exceed 12 pages and so applied ex parte to exceed the page limit after 

the fact. See generally Dkt. # 207. Defendants opposed, arguing that the FTC does not meet the 

ex parte standard, does not establish good cause for the extra page limit, prejudices Defendants 

by raising new arguments for the first time in the reply, and should be sanctioned. See generally 

Dkt. # 208. True, the FTC does not meet the traditional Mission Power test for ex parte relief, 

but the test also permits relief where, as here, the movant is guilty of only excusable neglect. See 

Mission Power Eng’g Co. v. Continental Cas. Co., 883 F. Supp. 488, 493 (C.D. Cal. 1995). 

Because the Court has already permitted the parties to exceed the page limit in their other briefs, 

there is no reason to disregard a majority of the FTC’s reply at this point. And the Court fails to 

see how Defendants would be prejudiced by the extra pages simply because they allegedly raise 

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Case 8:20-cv-01431-PSG-KES Document 212 Filed 04/06/22 Page 2 of 16 Page ID #:8397 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

Dkt. # 205 (“Reply I”). Defendants also filed a motion for partial summary judgment. See 

generally Dkt. # 196 (“Mot. II”). The FTC opposed. See generally Dkt. # 196 (“Opp. II”). 

Defendants replied. See generally Dkt. # 203 (“Reply II”). 

The Court finds these matters appropriate for decision without oral argument. See Fed. R. 

Civ. P. 78; L.R. 7-15. Having considered the moving, opposing, and reply papers, the Court 

GRANTS the FTC’s motion for summary judgment and DENIES Defendants’ motion for 

partial summary judgment. 

I. Background 

This case concerns the sale of hand sanitizer and other health products that were in high 

demand at the outset of the COVID-19 pandemic. Defendants view themselves as heroes who 

worked around the clock to meet the needs of the American public during a global pandemic. 

Opp. I 1:2 20. The FTC views things differently, accusing Defendants of deceiving a frenzied 

public by soliciting orders for hand sanitizer that they neither had in stock nor could timely ship 

and claiming without support that a protein powder product could protect users from COVID-19. 

Mot. I 1:3 2:19. 

A. Hand Sanitizer Sales 

The facts are largely undisputed. Tammabattula and Dr. J own and operate several 

businesses, including QYK, Dr. J’s Natural, Theo, and EASII. Plaintiff’s Statement of 

Undisputed Facts, Dkt. # 136 (“PSUF”), ¶¶ 10, 13, 26 31, 35, 38. Tammabattula and Dr. J run 

these businesses as a tight-knit, joint enterprise that shares employees and office locations.3 Id. 

¶¶ 40 42. 

new arguments for the first time. As the Court previously explained to Defendants when they 

tried to raise a new argument in a reply brief, such arguments generally will not be considered 

even if made within the page limit. See Dkt. # 127 at 1 n.1 (citing FT Travel-N.Y., LLC v. Your 

Travel Ctr., Inc., 112 F. Supp. 3d 1063, 1079 (C.D. Cal. 2015)). Accordingly, the Court 

GRANTS the FTC’s ex parte application, accepts the reply brief as filed, and DENIES 

Defendants’ request for sanctions. 

3

 As such, the parties have stipulated that the corporate Defendants are a “common enterprise” 

and that each is jointly and severally liable for the actions of the others. See Dkt. # 164, 

¶¶ 16 17. 

CV 90 (10/08) CIVIL MINUTES - GENERAL Page 2 of 16 
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Case 8:20-cv-01431-PSG-KES Document 212 Filed 04/06/22 Page 3 of 16 Page ID #:8398 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

In March 2020, to meet a pandemic-driven swell in demand for disinfectants, Defendants began 

offering various hand sanitizer products on their Glowwy and Dr. J’s Natural websites. Id. 

¶¶ 52 53, 55 57. Defendants attracted customers by launching a “Google AdWords” campaign 

that would return an advertisement, similar to the one pictured below, in response to a web 

search for terms like “human coronavirus” or “hand sanitizer in stock.” Id. ¶¶ 63 64. 

Defendants also ran other online advertisement campaigns on platforms like Facebook, 

Instagram, Reddit, and Bing. Id. ¶¶ 66 68, 265. 

Between March 4 and March 18 alone, Defendants sold nearly 150,000 bottles of hand 

sanitizer. Id. ¶ 80. And between March and August 2020, Defendants’ hand sanitizer sales 

totaled over $3.3 million. Id. ¶¶ 279, 391. The FTC attributes this sales boom in part to 

Defendants’ fast shipping promises. For example, one Google advertisement that was live from 

March 4 to 18 prominently stated, “Hand Sanitizers in Stock” and “Ships Today.” Id. ¶¶ 64, 77. 

And another Google advertisement that ran from April to mid-May 2020 boasted that hand 

sanitizer “Ships Fast from CA Today.” Id. ¶ 191. It is unclear what, if any, shipping promises 

Defendants’ advertisements on other platforms made. But between March and May 2020, 

Defendants’ websites offered shipping times between three to ten days. Id. ¶¶ 171 77. 

Defendants did not always follow through on their shipping promises. Of the 43,633 

orders Defendants received between March and August 2020, the FTC claims that 39,724 were 

shipped late. Id. ¶ 390. This figure assumes that all sales made between March 4 to 18 and 

April 1 to May 18 promised one-day shipping, while orders placed between March 19 to 31 and 

May 19 to December 29 promised ten-day shipping. Id. But this assumption is not entirely 

supported by the record, as the FTC’s only evidence of one-day shipping promises comes from 

Defendants’ Google AdWords advertisements, which accounted for only 10 to 11% of 

Defendants’ total hand sanitizer sales. See Dkt. # 199-3, Ex. C. In any event, it is undisputed 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

that over 30,000 orders took more than 10 days to ship for orders placed between March and 

May 2020, id. ¶ 179, and over 10,000 orders took more than 30 days to ship, id. ¶ 394.4 

The FTC avers that shipping was delayed in part because Defendants’ inventory was 

woefully insufficient to meet demand. Throughout March and April 2020, Tammabattula 

publicly announced that Defendants lacked ingredients and packaging to keep up with demand. 

PSUF ¶¶ 331 33, 341 51. For example, from March 4 to 9, Defendants sold over 18,000 bottles 

of hand sanitizer but did not receive any stock from suppliers during that time. Id. ¶¶ 113 14. 

To be sure, Defendants tried to restock their inventory. See id. ¶ 116. But in early March 2020, 

India banned hand sanitizer exports, blocking important supply shipments from two producers. 

Id. ¶¶ 126 27. So Defendants turned their attention to China, ordering several thousand bottles 

of hand sanitizer that ultimately did not arrive until almost a week into Defendants’ 

advertisement campaign. Id. ¶¶ 128 30. Despite known supply chain obstacles and a dwindling 

or nonexistent inventory, Defendants did not always indicate on their websites when products 

were sold out, id. ¶ 121, and instead continued to sell products that they did not have with the 

hope that their suppliers would deliver more inventory soon, see DRPSUF ¶ 121. 

Defendants did not regularly notify their customers of the resulting shipping delays. On 

March 11, Defendants sent customers an “order processing time update,” citing “longer than 

normal processing times” for “outbreak preparedness products.” Dkt. # 162, Ex. 16, Att. W. 

Defendants stated that, “[i]f this delay is not acceptable, you may cancel your order for a full 

refund anytime before we ship.” Id. But unless consumers contacted Defendants’ customer 

service team, Defendants provided no other notice of shipping delays. See PSUF ¶ 214; 

DRPSUF ¶ 214. 

Some customers voiced their dissatisfaction with the shipping delays and demanded 

refunds. See PSUF ¶¶ 258, 381. Defendants’ return policy generally permitted customers to 

request a refund while the product was still in the “preshipment” stage i.e., before it had been 

placed in the mail carrier’s possession. Id. ¶ 245. But at times, Defendants refused to issue 

4

 Defendants argue that this figure is not accurate because postal workers would not always scan 

an order indicating that it had been picked up i.e., shipped until days after they actually 

picked it up. See Defendants’ Response to Plaintiff’s Statement of Undisputed Facts, Dkt. # 202 

(“DRPSUF”), ¶ 394 (citing Declaration of Rakesh Tammabattula, Dkt. # 199 (“Tammabattula 

Decl.”), ¶ 34). But Tammabattula’s speculative statements in declaration unsupported by any 

actual evidence are insufficient to create a genuine factual dispute. See Thornhill Publ’g Co. v. 

Gen. Tel. & Elecs. Corp., 594 F.2d 730, 738 (9th Cir. 1979). 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

refunds once a shipping label had been generated and instead required customers to wait to 

receive the package and then reject it before receiving a refund. See Dkt. # 162, Ex. 16, Att. X, 

at 1 (“We can[’]t cancel because it is already labelled. Your order will be scheduled for shipping 

within the week or early next week.”). 

B. Protein Powder as a COVID-19 Preventative 

Defendants also sold a product called “Basic Immune IGG” that they offered through the 

Dr. J’s Natural website. PSUF ¶¶ 280 81. Basic Immune IGG is a protein powder that is 

supposed to promote healthy digestion and immune function. Id. ¶¶ 286 87. It is not FDAapproved to treat or prevent COVID-19. Id. ¶ 309. During a Vietnamese language broadcast, 

Dr. J encouraged people to wash their hands regularly and use Basic Immune IGG. As a result, 

she “guaranteed” that people would “stay safe,” citing the product’s “FDA[] verification and 

approval.” Dkt. # 144, Ex. 8, Att. A, at 14 15. She went on to explain that the protein powder 

could increase the user’s total antibody count, giving them a better chance to “cling to and bite 

that coronavirus, push it out and kill it.” Id. at 15. The broadcast host then said that, since Dr. J 

had taken the protein powder already, people “d[id not] have to be afraid of [her] anymore” and 

that people “c[ould] get close to [her].” Id. Dr. J confirmed: “Yes, you’re right.” Id. Dr. J also 

posted two English language videos on YouTube that made similar claims but with more muted 

language. See PSUF ¶¶ 299 308; Dkt. # 137-1, Ex. 1, Att. H, at 11 (explaining that Basic 

Immune IGG could help users “fight back and destroy all of the coronavirus that is entering into 

your body”). 

C. Procedural History 

In August 2020, the FTC filed a complaint and an ex parte application for a temporary 

restraining order against Defendants. See generally Dkts. # 1, 6. The parties then stipulated to, 

and the Court approved, both a temporary restraining order and a preliminary injunction. See 

generally Dkts. # 28, 30. The FTC’s operative first amended complaint asserts four claims: 

Count One Failure to Timely Ship Goods and Issue Refunds: 

Violation of the Mail, Internet, or Telephone Order Merchandise 

Rule (“MITOR”), 16 C.F.R. § 435.2(a) (c). First Amended 

Complaint, Dkt. # 73 (“FAC”), ¶¶ 72 73. 

Count Two Deceptive Shipping Claims: Violation of § 5 of the 

FTC Act, 15 U.S.C. §§ 45(a), 52. FAC ¶¶ 77 79. 

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Case 8:20-cv-01431-PSG-KES Document 212 Filed 04/06/22 Page 6 of 16 Page ID #:8401 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

Count Three Deceptive COVID-19 Prevention Claims: Violation 

of § 5 of the FTC Act, 15 U.S.C. §§ 45(a), 52. FAC ¶¶ 80 82. 

Count Four False Establishment Claims: Violation of § 5 of the 

FTC Act, 15 U.S.C. §§ 45(a), 52. FAC ¶¶ 83 85. 

The FTC now moves for summary judgment on each of its four claims, seeking monetary 

relief for consumers and a permanent injunction. See generally Mot. I. Defendants also move 

for partial summary judgment to bar the FTC from seeking what Defendants classify as a 

punitive disgorgement remedy. See generally Mot. II. 

II. Legal Standard 

“A party may move for summary judgment, identifying each claim or defense or the 

part of each claim or defense on which summary judgment is sought. The court shall grant 

summary judgment if the movant shows that there is no genuine dispute as to any material fact 

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 

The party seeking summary judgment bears the initial burden of informing the court of 

the basis for its motion and identifying those portions of the pleadings and discovery responses 

that demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 

477 U.S. 317, 323 (1986). If the moving party meets its initial burden, the nonmoving party 

must set forth, by affidavit or as otherwise provided in Rule 56, “specific facts showing that 

there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

In judging evidence at the summary judgment stage, the court does not make credibility 

determinations or weigh conflicting evidence. Rather, it draws all reasonable inferences in the 

light most favorable to the nonmoving party. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors 

Ass’n, 809 F.2d 626, 630 31 (9th Cir. 1987). The evidence presented by the parties must be 

capable of being presented at trial in a form that would be admissible in evidence. See Fed. R. 

Civ. P. 56(c)(2). Conclusory, speculative testimony in affidavits and moving papers is 

insufficient to raise genuine issues of fact and defeat summary judgment. See Thornhill Publ’g 

Co., 594 F.2d at 738. 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

III. Evidentiary Objections 

The FTC asserts various evidentiary objections along with its reply. See generally Dkt. 

# 206. If the Court relies on any objected-to evidence, it relies only on admissible evidence and 

thus overrules the corresponding objection. See Godinez v. Alta-Dena Certified Dairy LLC, No. 

CV 15-01652 RSWL (SSx), 2016 WL 6915509, at *3 (C.D. Cal. Jan. 29, 2016). 

IV. Discussion 

The Court first addresses whether the FTC has carried its burden of proof as Plaintiff at 

summary judgment to prevail on its (A) MITOR claim and (B) FTC Act claims. The Court then 

turns to (C) the remedies the FTC is entitled to seek. 

A. First Cause of Action: MITOR Violation 

The FTC argues Defendants violated the MITOR for several reasons, namely by soliciting 

hand sanitizer orders without a reasonable basis to believe they could ship the orders as 

promised. Mot. I 26:3 35:13. The Court agrees. 

The MITOR proscribes three distinct practices relating to shipping merchandise and 

refunding consumers. See 16 C.F.R. § 435.2. First, a seller may not solicit orders for 

merchandise “unless, at the time of the solicitation, the seller has a reasonable basis to expect 

that it will be able to ship any ordered merchandise to the buyer.” Id. § 435.2(a). Shipment must 

be either within the time “clearly and conspicuously stated” in the solicitation or, if no time is 

specified, within 30 days after a buyer’s order. Id. § 435.2(a)(i) (ii). Shipment means physically 

placing the merchandise “in the possession of the carrier.” Id. § 435.1(e). Second, if the seller 

cannot ship within these timeframes, the seller must offer the buyer, “clearly and conspicuously 

and without prior demand,” the option to either consent to delayed shipping or cancel the order 

and receive a “prompt refund.” Id. § 435.2(b)(1). Third, sellers must issue a prompt refund if, 

(1) prior to shipment, the buyer cancels the order; or (2) the seller fails to offer the buyer the 

option to consent to the delay and has not timely shipped the goods. Id. § 435.2(c)(1), (5). 

Defendants’ hand sanitizer sales between March and August 2020 violated all three of the 

MITOR’s proscribed practices. First, Defendants solicited orders for hand sanitizer that they did 

not have in stock and had no “reasonable basis” to believe would be available to ship on 

Defendants’ advertised timelines. See id. § 435.2(a). Throughout March and April 2020, 

Tammabattula publicly acknowledged that Defendants lacked ingredients and packaging to keep 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

up with demand. PSUF ¶¶ 331 33, 341 51. And Defendants knew that the COVID-19 

pandemic had disrupted the global supply chain, resulting in delayed sometimes 

indefinitely shipments that they needed to meet an ever-growing demand for hand sanitizer. 

Id. ¶¶ 113 14, 126 30. This strongly suggests that Defendants had no “reasonable basis” to 

continue offering one to ten-day shipping or indicating that hand sanitizer was still in stock on 

their website. See 16 C.F.R. § 435.2(a). Additionally, over 10,000 orders took longer than 30 

days to ship. PSUF ¶ 394. At bottom, these orders ran afoul of the MITOR because they 

exceeded both the “clearly and conspicuously stated” shipping timelines in some of Defendants’ 

advertising as well as the MITOR’s maximum 30-day shipping timeline when no specific 

shipping speed is stated. See 16 C.F.R. § 435.2(a)(i) (ii). 

Second, Defendants failed to “clearly and conspicuously and without prior demand” give 

consumers the option either to consent to delayed shipping or to cancel their orders and receive a 

refund. Id. § 435.2(b)(1). On only one occasion in March 2020, Defendants notified consumers 

that orders were taking longer than expected to process and offered refunds if orders had not yet 

shipped. See PSUF ¶¶ 210 11; Dkt. # 162, Ex. 16, Att. W. But Defendants provided no other 

notice of shipping delays unless customers contacted Defendants’ customer service team. PSUF 

¶ 214; DRPSUF ¶ 214. In other words, any other notice of shipping delays was not offered 

“without prior demand.” See 16 C.F.R. § 435.2(b)(1). 

Third, Defendants did not always issue refunds much less “prompt” refunds when 

customers requested one before their order had shipped. See, e.g., Dkt. # 162, Ex.1 16, Att. X, at 

1 (“We can[’]t cancel because it is already labelled. Your order will be scheduled for shipping 

within the week or early next week.”). 

Accordingly, the FTC’s undisputed evidence reveals that Defendants violated multiple 

provisions of the MITOR between March and August 2020.5 As such, the Court GRANTS the 

FTC’s motion for summary judgment as to its first cause of action. 

5

 Additionally, because this action is brought by the FTC, Defendants’ failure to maintain 

adequate records indicating when shipments were actually placed in the mail carrier’s 

possession, PSUF ¶¶ 153, 207, 406, yields a rebuttable and, here, unrebutted presumption 

that Defendants violated the MITOR, see 16 C.F.R. § 435.2(a)(4). 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

B. Second, Third, and Fourth Causes of Action: FTC Act Violations 

The FTC claims it is entitled to summary judgment on its three FTC Act causes of action. 

Mot. I 35:14 39:19. The Court agrees. 

The FTC Act prohibits, among other things, “unfair or deceptive acts or practices in or 

affecting commerce.” 15 U.S.C. § 45(a)(1). A statement can be “unfair or deceptive” if it is 

likely to mislead reasonable consumers under the circumstances in a way that is “material.” FTC 

v. Gill, 265 F.3d 944, 950 (9th Cir. 2001). Whether a statement is misleading may be based on 

the “net impression” it creates or the “failure to disclose material information.” FTC v. 

Cyberspace.com LLC, 453 F.3d 1196, 1200 (9th Cir. 2006); Sterling Drug, Inc. v. FTC, 741 F.2d 

1146, 1154 (9th Cir. 1984). A misleading statement is material if it “involves information that is 

important to consumers and, hence, likely to affect their choice of, or conduct regarding, a 

product.” Cyberspace.com LLC, 453 F.3d at 1201 (quoting Cliffdale Assocs., Inc., 103 F.T.C. 

110, 165 (1984)). Materiality is presumed when statements “significantly involve health, safety, 

or other issues that would concern reasonable consumers.” FTC v. Wellness Support Network, 

Inc., No. 10-CV-04879-JCS, 2014 WL 644749, at *17 (N.D. Cal. Feb. 19, 2014). 

Here, Defendants’ shipping speed and “in stock” representations were “unfair or 

deceptive” and thus in violation of the FTC Act. Defendants advertised shipping speeds ranging 

anywhere from one day on Google to as many as ten days on their websites. PSUF ¶¶ 64, 77, 

171 77. When Defendants made some of these shipping claims, they had already publicly 

acknowledged that they lacked ingredients and packaging to keep up with demand and faced 

obstacles in the supply chain that delayed shipments necessary to restock their inventory. Id. 

¶¶ 126 27, 128 30, 331 33, 341 51. Yet Defendants continued to accept orders from 

customers, representing either implicitly or explicitly that they had hand sanitizer in stock and 

could ship it. See id. ¶¶ 113 14, 121. Such representations were also material because, as 

Defendants’ former marketing director testified, at least some customers’ decisions to order hand 

sanitizer turned on whether the product was actually in stock. See Deposition Transcript of 

Danielle Paulo, Dkt. # 161, Ex. 16, Att. U (“Paulo Depo.”), at 88:9 19 (“So I think it really 

shocked everybody else in the U.S. that we even had them, so [customers] just wanted to 

confirm first that we had them in stock. And when we did confirm that, they would place their 

order.”). 

Defendants’ representations that Basic Immune IGG protein powder could protect users 

from COVID-19 and that it was FDA approved for that purpose were also “unfair or deceptive” 

and thus in violation of the FTC Act. Dr. J represented in both Vietnamese and English 

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#:8405 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

language broadcasts that Basic Immune IGG could help users strengthen their immune system 

and thus “cling to and bite that coronavirus, push it out and kill it” or “fight back and destroy all 

of the coronavirus that is entering your body.” Dkt. # 144, Ex. 8, Att. A, at 15; Dkt. # 137-1, Ex. 

1, Att. H, at 11. Defendants argue that, when viewed in context with the entire video, these 

representations were not misleading. See Opp. I 22:6 25:11. Viewed in the light most favorable 

to Defendants, the Court agrees that Dr. J’s statements could be reasonably interpreted to mean 

only that Basic Immune IGG helps boost users’ immune systems, which is exactly what the 

product was designed to do. See PSUF ¶¶ 286 87. 

But Dr. J went much further than that. In a Vietnamese language broadcast, Dr. J 

represented that, by taking Basic Immune IGG, people did not have to be afraid to stand close to 

her anymore. Dkt. # 144, Ex. 8, Att. A, at 14 15. And she “guaranteed” that users would “stay 

safe” if they washed their hands and used Basic Immune IGG, citing the product’s “FDA[] 

verification and approval.”6 Id. To be sure, Dr. J did not say that users would “stay safe” from 

COVID-19 specifically or that Basic Immune IGG was FDA approved to protect against 

COVID-19. But even when read in the light most favorable to Defendants and in context with 

the entire broadcast, the clear “net impression” was that Dr. J misleadingly implied that Basic 

Immune IGG users would stay safe from COVID-19 and that it was FDA approved for that 

purpose. See Cyberspace.com LLC, 453 F.3d at 1200; Sterling Drug, Inc., 741 F.2d at 1154. 

These misleading statements were also material because they “significantly involve[d] health, 

safety, or other issues that would concern reasonable consumers.” Wellness Support Network, 

Inc., 2014 WL 644749, at *17. 

Accordingly, the FTC has established that Defendants violated the FTC Act by making 

materially misleading statements about (1) their hand sanitizer stock and shipping capabilities, 

(2) Basic Immune IGG’s ability to prevent COVID-19 infection and transmission, and (3) Basic 

Immune IGG’s FDA approval. As such, the Court GRANTS the FTC’s summary judgment 

motion as to their second, third, and fourth causes of action. 

6

 Defendants challenge the accuracy of the FTC’s certified translation of these statements. See 

Dkt. # 200, ¶¶ 16 18. But Dr. J’s own alternative translation of the same passage is not enough 

to create a genuine factual dispute because she does not even attempt to establish her 

competence to testify as a Vietnamese to English translator. See Fed. R. Civ. P. 56(c)(4). 

Absent a properly authenticated alternative translation, it is well established that the non-moving 

party cannot manufacture a genuine factual dispute with conclusory statements in a declaration. 

See Thornhill Publ’g Co., 594 F.2d at 738. 

CV 90 (10/08) CIVIL MINUTES - GENERAL Page 10 of 16 
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#:8406 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

C. Remedies 

The FTC seeks both (i) monetary relief for consumers and (ii) a permanent injunction. 

The FTC also requests that (iii) the individual Defendants Tammabattula and Dr. J be held 

personally liable for their companies’ violations. Mot. I 39:20 50:5. The Court addresses each 

issue in turn. 

i. Monetary Relief for Consumers 

The FTC seeks over $3 million in refunds for consumers i.e., Defendants’ net revenue, 

minus any already issued refunds, from March to August 2020. Mot. I 42:11 14. Defendants 

separately filed a motion for partial summary judgment, arguing that the FTC should take 

nothing without showing that shipping delays actually injured consumers, and if injury is 

established, that the Court should limit the monetary relief to Defendants’ net profits, not their 

net revenue. Mot. II 13:5 18. 

Section 19 of the FTC Act permits the FTC to seek monetary relief “necessary to redress 

injury to consumers” resulting from any rule violation i.e., the MITOR. See 15 U.S.C. 

§ 57b(b). The FTC must establish consumer injury but need not prove individual reliance to do 

so. FTC v. Figgie Int’l, Inc., 994 F.2d 595, 605 (9th Cir. 1993) (per curiam) (“[P]roof of 

individual reliance by each purchasing consumer is not needed.”); accord United States v. 

MyLife.com, Inc., __ F. Supp. 3d. __, No. CV 20-6692 JFW (PDx), 2021 WL 4891776, at *13 

(C.D. Cal. Oct. 19, 2021). Instead, if the FTC demonstrates that a defendant made material 

representations that were widely disseminated, there is a presumption of actual reliance. Figgie 

Int’l, Inc., 994 F.2d at 605 06; see also id. at 606 (“The same reasoning is applicable to Section 

19.”). Unless the defendant can rebut that presumption, injury to consumers is decisively 

established. Id. at 606. 

Defendants rely on an Arizona district court case for the proposition that the FTC cannot 

seek redress for shipping delays under the MITOR without proving individual consumer injury. 

See Mot. II 5:12 10:20. In FTC v. Noland, the court addressed a MITOR violation for lateshipped products. No. CV-20-00047-PHX-DWL, 2021 WL 5493443, at *3 (D. Ariz. Nov. 23, 

2021). The district court held that the FTC was not entitled to the refunds it requested because it 

failed to carry its burden of proof at summary judgment of demonstrating that customers were 

actually injured by the shipping delays. Id. However, the court reached this conclusion without 

addressing whether the FTC was entitled to a presumption of reliance that, if applicable, would 

have overcome any concerns with individual injury. See id. at *3 4. This is presumably because 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

the FTC’s MITOR theory was based on violations that arose only after the contract was 

consummated. See 16 C.F.R. § 435.2(b) (c). 

Noland’s concerns with consumer injury do not readily translate here. Critically, the FTC 

has established a MITOR violation for conduct that occurred before any contract was 

consummated. See 16 C.F.R. § 635.2(a) (solicitation of merchandise orders is prohibited 

“unless, at the time of the solicitation, the seller has a reasonable basis to expect that it will be 

able to ship any ordered merchandise to the buyer” within the timeframe “clearly and 

conspicuously” stated (emphasis added)). Accordingly, because the FTC’s theory of MITOR 

liability here turns on Defendants’ pre-purchase, materially misleading shipping promises, the 

presumption of actual reliance standard can apply here. See Figgie Int’l, Inc., 994 F.2d at 605. 

And given Defendants’ widely disseminated materially misleading claims that they had hand 

sanitizer in stock and ready to ship, the Court finds that the FTC is entitled to a presumption of 

actual reliance in this case. See id. Because Defendants have “presented no evidence to rebut 

the presumption of reliance, injury to consumers has been established.” Id. at 606. 

Once consumer injury is established, the FTC Act permits monetary relief “necessary to 

redress” that injury, including refunds and damages. See 15 U.S.C. § 57b(b). Defendants 

propose that the Court follow a “net profit” redress approach described in Figgie. See Mot. II 

11:17 12:13. There, the Ninth Circuit approved, with some modification, the district court’s 

monetary redress model. Figgie, Int’l, Inc., 994 F.2d at 609. The court upheld the portion of the 

plan requiring the defendant to pay its net profits during the relevant time period into an escrow 

account managed by the FTC. Id. at 605. Customers could then make claims for a full refund 

from the account. Id. Assuming that customer refund claims exceeded the defendant’s net 

profits, the defendant was then required to add additional funds to the escrow account not to 

exceed its net revenue during the relevant time period. Id. at 608. The district court found this 

model necessary because the defendant sold its products to distributors for cash who then 

marked up the price at unknown rates and sold directly to consumers. Id. at 606. As such, the 

price customers actually paid for the product was uncertain and could be ascertained only by 

having customers make individual refund claims. See id. 

Here, the Court does not find it necessary to implement the same recovery plan because 

Defendants sold products directly to consumers rather than through a distributor. As such, the 

refund due to each customer is clear from Defendants’ records, and the appropriate measure of 

consumer redress is net revenues, not net profits. See MyLife.com, Inc., __ F. Supp. 3d. at __, 

2021 WL 4891776, at *13. Outside of the unique circumstances presented in Figgie, the Court 

sees no justification and Defendants suggest none for arbitrarily capping available refunds at 

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CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

the Defendants’ net profit. And, in any event, Figgie did not cap refunds at the defendant’s net 

profits; it simply used that as a starting point, subject to increase depending on the volume of 

refund requests. See 994 F.2d at 608. 

Defendants also claim that depriving them of their net revenue for hand sanitizer is an 

impermissible form of disgorgement. Mot. II 4:5 17. To be sure, the Ninth Circuit has held that 

disgorgement and other forms of punitive or exemplary damages are not authorized here. See 

Figgie Int’l, Inc., 994 F.2d at 607. But the FTC does not seek disgorgement; it seeks refunds to 

customers explicitly authorized by the FTC Act. See 15 U.S.C. § 57b(b) (“Such relief may 

include . . . the refund of money or return of property.”). Simply because the value of refunds 

due to consumers is unsurprisingly equal to Defendants’ total hand sanitizer revenue does not 

transform otherwise permissible refunds into impermissible disgorgement. 

Finally, Defendants argue that to be entitled to a refund, customers should be required to 

return the hand sanitizer or else they will receive a “windfall” by retaining their hand sanitizer 

and receiving a refund. Reply II 10:18 25. It does not follow that a refund exceeds necessary 

consumer redress simply because the product the consumer purchased has some value too. The 

Ninth Circuit rejected a similar argument in Figgie, explaining that the amount of redress due to 

a consumer need not be decreased by the fair market value of the product or service received. 

994 F.2d at 606. To illustrate why, the Ninth Circuit raised the hypothetical case of a “dishonest 

rhinestone merchant” who sold customers diamonds that were in fact rhinestones. Id. The court 

explained that it “would not limit [customers’] recovery to the difference between what they paid 

and a fair price for rhinestones” because, had the customers known the truth, they might never 

have purchased rhinestones at all. Id. In other words, customers are not owed a refund because 

they received hand sanitizer that may or may not have been useful to them after Defendants’ 

shipping delays; customers are owed a refund because Defendants’ deception induced the sale in 

the first place. See id. (“The fraud in the selling, not the value of the thing sold, is what entitles 

customers in this case to full refunds or to refunds for each [product] that is not useful to 

them.”). 

In short, the Court agrees with the FTC that consumers are entitled to redress in the form 

of full refunds not to exceed Defendants’ total hand sanitizer revenue from March to August 

2020 i.e., $3,086,238.99. However, given that some customers may have been satisfied with 

their hand sanitizer orders even if delayed the Court prefers to implement a redress plan 

requiring customers to make refund requests rather than receiving the funds outright. See Mot. II 

11:17 13:2; Opp. II 13:13 n.21. The FTC is to hold this sum in an escrow account, and 

Defendants’ customers may seek refunds directly from the FTC. Funds must be returned to 

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CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

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Title FTC v. QYK Brands LLC, et al. 

Defendants, less the FTC’s costs to administer the refund process, if they remain unclaimed 120 

days after consumers are notified. See Figgie Int’l, Inc., 994 F.2d at 607 08 (modifying the 

district court’s plan to ensure that unclaimed funds be returned to the defendant, less the FTC’s 

administration costs). 

Accordingly, the Court GRANTS the FTC’s requested monetary relief for consumers 

stemming from Defendants’ violation of the MITOR and DENIES Defendants’ motion for 

partial summary judgment that seeks to bar such relief. 

ii. Permanent Injunctive Relief 

The FTC seeks a permanent injunction to prevent Defendants from advertising or selling 

“protective goods and services,” including products designed or represented to detect, treat, 

prevent, mitigate, or cure COVID-19 or any other infection or disease. Mot. I 44:6 9; see also 

Proposed Judgment, Dkt. # 168-1, ¶ O. The FTC also seeks to implement various monitoring 

measures to ensure Defendants’ compliance with the permanent injunction. Mot. I 46:11 20. 

The FTC is authorized to seek a permanent injunction for violation of “any provision of 

law enforced by the” FTC. 15 U.S.C. § 53(b). Injunctive relief under this section “cannot be 

used to remedy past behavior and can only be granted where wrongdoing is ongoing or likely to 

recur.” FTC v. Cardiff, No. EDCV 18-2104 DMG (PLAx), 2021 WL 3616071, at *7 (C.D. Cal. 

June 29, 2021). To determine whether wrongdoing is likely to recur, courts consider several 

factors, including “[1] the degree of scienter, [2] frequency of violative acts, [3] the defendant’s 

ability to commit future violations, [4] the degree of harm consumers suffered, and [5] the 

defendant’s recognition of his own culpability.” United States v. Zaken Corp., 57 F. Supp. 3d 

1233, 1242 (C.D. Cal. 2014). The scope of an injunction depends on the circumstances of each 

case but must bear “a reasonable relationship to the violation.” FTC v. John Beck Amazing 

Profits LLC, 888 F. Supp. 2d 1006, 1012 (C.D. Cal. 2012). 

Based on the factors outlined above, the FTC is entitled to the permanent injunction it 

seeks. First, Defendants had a high degree of scienter. Regarding hand sanitizer sales, 

Tammabattula publicly acknowledged that Defendants lacked supplies to keep up with demand. 

PSUF ¶¶ 331 33, 341 51. Yet Defendants continued to solicit orders from customers when they 

had insufficient sanitizer inventory on hand and were well aware of the global supply chain 

disruptions that hindered Defendants’ ability to restock their inventory. See id. ¶¶ 113 14, 121, 

126 27. Additionally, Defendants had at least some notice that their advertisements were 

problematic because their Google advertising account was suspended for “potentially profit[ing] 

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CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

from or exploit[ing]a sensitive event with significant social, cultural or political impact.” Id. ¶¶ 

189 94. Defendants’ Facebook account suffered a similar fate, but Defendants sought out a 

freelancer to advertise for them to circumvent the suspension. Id. ¶¶ 436 38. Turning to Basic 

Immune IGG sales, Dr. J is a licensed pharmacist who had her pharmacy license suspended for 

“Unprofessional Conduct Involving Acts of Dishonesty, Fraud, or Deceit,” among other things. 

Id. ¶¶ 20 23. Undeterred by this punishment, Dr. J nevertheless continued her apparent streak of 

dishonesty and deceit by misrepresenting on a Vietnamese language broadcast that Basic 

Immune IGG could prevent or at least minimize the risk of COVID-19 infection and was 

FDA approved for that purpose. See Dkt. # 144, Ex. 8, Att. A, at 14 15. Based on the 

foregoing, Defendants have exhibited a high degree of scienter, and this factor weighs in favor 

of finding that wrongdoing is likely to recur. See Zaken Corp., 57 F. Supp. 3d at 1242. 

Second and third, there was a high frequency of violative hand sanitizer sales, and 

Defendants retain the ability to commit future violations. As discussed above, between March 

and August 2020 Defendants violated the FTC Act by repeatedly soliciting hand sanitizer orders 

when Defendants had insufficient inventory or none at all. See PSUF ¶¶ 126 27, 128 30, 

331 33, 341 51. And Defendants still sell hand sanitizer, personal protective equipment like 

face masks, and dietary supplements. Id. ¶ 427. As such, Defendants retain the ability to 

commit future violations even though they recently changed their business model to sell directly 

to wholesale retailers instead of individual consumers. See Tammabattula Decl. ¶ 42. 

Accordingly, the second and third factors weigh in favor of finding that wrongdoing is likely to 

recur. 

Fourth, neither party explicitly addresses the relative degree of harm to consumers. 

Accordingly, this factor is neutral. 

Fifth, Defendants have shown no recognition of their own culpability. They dispute that 

any wrongdoing took place. See Tammabattula Decl. ¶ 26 (blaming delays on the “unforeseen 

and unprecedented” COVID-19 pandemic); id. ¶ 33 (everyone received the hand sanitizer they 

ordered or received a refund); id. ¶ 46 (not aware of the law); Dkt. # 200, ¶¶ 16 18 (Dr. J 

disputing that she ever said Basic Immune IGG could ward off COVID-19 infection and was 

FDA approved for that purpose). Accordingly, this factor weighs in favor of finding that 

wrongdoing is likely to recur. 

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CENTRAL DISTRICT OF CALIFORNIA 

CIVIL MINUTES - GENERAL 

Case No. SACV 20-1431 PSG (KESx) Date April 6, 2022 

Title FTC v. QYK Brands LLC, et al. 

In sum, the foregoing factors support the conclusion that Defendants’ wrongdoing is 

likely to recur. See Cardiff, 2021 WL 3616071, at *7. Accordingly, the Court GRANTS the 

FTC’s requested permanent injunction and its associated compliance-monitoring measures.7 

iii. Liability for Individual Defendants 

The FTC claims that the individual defendants Tammabattula and Dr. J should also be 

held personally liable for both the monetary and injunctive relief it seeks. Mot. I 47:1 50:5. 

Defendants do not dispute this in their opposition, so the Court deems the issue conceded. See 

Tapia, 2015 WL 4650066, at *2. 

V. Conclusion 

For the foregoing reasons, the Court GRANTS the FTC’s motion for summary judgment 

and DENIES Defendants’ motion for partial summary judgment. The FTC is ORDERED to 

file a revised proposed judgment consistent with this order no later than April 22, 2022. 

Additionally, the Court DENIES AS MOOT the FTC’s pending motion to strike 

Defendants’ jury demand, as well as the parties’ subsequent stipulation to strike the jury demand. 

See generally Dkts. # 192, 210. 

IT IS SO ORDERED. 

7

 Defendants do not address or otherwise dispute the injunction’s proposed compliance 

monitoring measures, so the Court deems that issue conceded. See Tapia v. Wells Fargo Bank, 

N.A., No. CV 15-03922 DDP (AJWx), 2015 WL 4650066, at *2 (C.D. Cal. Aug. 4, 2015) 

(arguments to which no response is supplied are deemed conceded). 

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