1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 14a0228p.06 

### UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

F EDERAL T RADE C OMMISSION , Plaintiff-Appellee ,

v

.

E.M.A. N ATIONWIDE , I NC ., N EW L IFE F INANCIAL S OLUTIONS , I NC .; 1 UC I NC .; 7242701 C ANADA I NC .; 7242697 C ANADA I NC .; 7246293 C ANADA I NC .; 7246421 C ANADA I NC .; J AMES B ENHAIM ; D ANIEL M ICHAELS , Defendants-Appellants

. ┐ │ │ │ │ │ │ │ │ │ │ │ │ ┘ No. 13-4169

Appeal from the United St ates District Court for the Northern District of Ohio at Cleveland No. 1:12-cv-02394—James S. Gwin, District Judge. Argued: June 20, 2014 Decided and Filed: September 8, 2014 Before: SILER, CLAY and GIBBONS, Circuit Judges.

_________________ COUNSEL

ARGUED: Jennifer A. Lesny Fleming, KAUFMAN & COMPANY, LLC, Cleveland, Ohio, for Appellants. David L. Sier adzki, FEDERAL TRADE COMMISSION, Washington, D.C., for Appellee. ON BRIEF: Jennifer A. Lesny Fleming, Steven S. Kaufman, KAUFMAN & COMPANY, LLC, Cleveland, Ohio, for Appellants. David L. Sieradzki, John F. Daly, FEDERAL TRADE COMMISSION, Wash ington, D.C., for Appellee. 

### >No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 2

_________________ OPINION

_________________ CLAY, Circuit Judge. The Federal Trade Commission (“FTC”) filed a complaint against Defendants E.M.A. Nationwide, Inc. (“E.M.A.”), 1 UC Inc. (“First United”), New Life Financial Solutions, Inc. (“New Life”), four Canadian corporations, 1 Daniel Michaels, James Benhaim, Phillip Hee Min Kwon, Joseph Shamolian, and Nissim N. Ohayon, 2 alleging violations of § 5(a) the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 45(a); the Telemarketing Sales Rule (“TSR”), 16 C.F.R. Part 310; and the Mort gage Assistance Relief Services Rule (“MARS Rule”), 12 C.F.R. Part 1015. Afte r the district court denied vari ous motions filed by Defendants, including motions to stay proc eedings and a motion for further discovery, the FTC filed a motion for summary judgment. Defendants failed to f ile a brief in opposition to the motion, and the district court granted summary judgment in favor of the FTC. Defendants appealed the district
court’s denials of the motions to stay proceedings and for further di scovery as well as the district court’s grant of summary judgment.
For the reasons set forth below, this Court AFFIRMS the district court’s orders and entry of summary judgment.

I.

BACKGROUND
A. Procedural History
On September 25, 2012, the FTC filed a compla int alleging that Defendants fraudulently marketed and sold debt-related services, failed to provide those services , and retained money as upfront fees in violation of the FTC Act, the TSR, and the MARS Rule. The FTC also filed a motion for a temporary restrain ing order (“TRO”) and a prelim inary injunction, and provided

1 Each of the Canadian corporations is identified by a corporate number: (1 ) 7242701 Canada Inc.; (2) 7242697 Canada Inc.; (3) 7246293 Canada Inc.; and (4) 7246421 Canada Inc.

2 Kwon, Shamolian, and Ohayon are no longer parties in this case.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 3

over 1,000 pages of exhibits, including declarations from Defendants’ former customers, copies of their contracts, other documents provided by customers, and Defendants’ bank records.
On October 10, 2012, Defendants fi led a motion to stay proceedi ngs, asserting that a stay was necessary because a criminal investigation had been launched into their business activities, as evidenced by a raid conducted by the Royal Canadian Mounted Police (“RCMP”). According to Defendants, the RCMP, at the direction of th e United States Department of Justice (“DOJ”) and the United States Postal Service (“USPS”), raided Defe ndants’ Montreal office and Michaels’ Montreal residence, seizing all of their business a nd personal records—records they claim were necessary to defend against the FTC’s allegations. Despite these assertions, the
district court denied Defenda nts’ motion on October 11, 2012.
The following day, the district court held a preliminary injunction hearing. At the hearing, Michaels’ attorney reminded the court that most of the relevant evidence was in the possession of the Canadian authorities and that th e DOJ had “indicated . . . indictments would be
filed in the Southern Distri ct of Florida.” (R. 78, 10/ 12/2012 Tr. of Hr’g at 1936–37.) 3 On October 25, 2012, the FTC and Defendants entered in to a stipulated preliminary injunction, enjoining Defendants from opera ting their businesses.
On June 4, 2013, less than a month befo re the preliminary discovery deadline, Defendants filed a renewed motion for a stay of proceedings and a memorandum in support of the motion, claiming a stay was necessary to prot ect Michaels’ constituti onal rights and to allow
Defendants to defend themselves in the instant action. Defendant s reasserted that they were unable to access critical records gathered by the DOJ because the investigation was still ongoing. In opposition to the motion, the FTC asserted th at although Defendants were then subject to preliminary injunctions preventing them from operating their businesse s and continuing to deceive consumers, a stay would be inappropriate. Additionally, the FTC claimed that Defendants had frequently and fr eely invoked their Fifth Amendm ent right to remain silent throughout discovery, even in the absence of a ny formal indictments. Therefore, the FTC

3 Citations to the record are accompanied by references to Page ID numbers.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 4

claimed, Defendants’ constitutional rights would not be violated if the stay were denied. 4 Without explanation, the district cour t denied the motion on June 12, 2013.
On July 8, 2013, the FTC filed its motion fo r summary judgment and attached over 1,000 pages of exhibits. Sixteen days later, on Ju ly 24, 2013, Defendants filed a motion for extension of the deadline for filing the response, claiming th ey were entitled to an extension because they were unable to open the FTC’s re sponses to Defendants’ first re quests for production, which they had received the day before. The district court denied this motion on July 29, 2013 without analysis or explanation.

Defendants filed a motion to continue the FTC’s summary judgment motion to allow for further discovery pursuant to Fede ral Rule of Civil Procedure 56( d), claiming that only if they
were afforded access to their own documents a nd materials could they properly defend against the summary judgment motion. Defendants also asse rted that genuine issues of material fact existed as to the FTC’s claims. Without analysis or explanation, the dist rict court also denied this motion. Defendants then failed to respond in opposition to the motion for summary judgment.
Ultimately, the district court granted the FTC’s motion for summary judgment on August 26, 2013. The court found that Defendants violated the FTC Act, the TSR, and the MARS Rule, that they acted as a common enterprise and ther efore could be held jointly and severally liable for their acts, and that Benhaim and Michaels were pers onally liable for inj unctive and monetary relief for the corporations’ acts. The district court ordered Defendants to jointly pay restitution in the amount of $5,706,135.48 to the consumers w ho were injured by Defendants’ practices. Additionally, the court permanently enjoined Defendants from working in “the debt relief and mortgage assistance industries.” F.T.C. v. E.M.A. Nationwide, Inc., et al. , No. 1:12–cv–2394, 2013 WL 4545143, at *8 (N.D. Ohio Aug. 27, 2013).

4 While the motion was pending before the district cour t, Defendants filed a notice of discovery dispute to alert the court that the FTC had failed to produce requested discovery, had not properly disclosed relevant discovery it possessed, and had sent a letter to Defendants refusing to produce some of the discovery, in apparent violation of an earlier court order. This dispute was resolved on June 7, 2013, when the FTC agreed to supplement its Rule 26 disclosures and to produce various documents and data. Subsequently, on June 17, 2013, Defendants received discovery from the FTC, but found that it did not include all relevant materials in the FTC’s possession. On June 18, 2013, Defendants served the FTC with their first form al request for production, se eking access to the documents seized by the Canadian government to wh ich Defendants believed the FTC had access.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 5

Defendants filed a timely notice of appeal, as serting that the district court abused its discretion in denying their renewed motion for a stay of proceedings and their motion for additional discovery, and that the court erre d in granting the FTC’s motion for summary judgment.
B. Factual Background
In 2010, Michaels and Benhaim allegedly c onstructed a telemark eting operation through which they employed telemarketers to place cold calls to individuals across the United States who were burdened by mortgage, credit card, and student loan debts. It is al leged that in order to achieve this goal and to execute this plan w ithout detection, Michaels and Benhaim created a series of American and Canadian corporations.

1. Maze of Interrelated Corporations and Individuals The first American corporation in this series was E.M.A., which was initially registered to Ohayon and incorporated by attorney Kwon, and then formally transferred to Michaels, who was listed as the new regist ered agent in the 2012 For Profit Corporation Annual Report.
Numerous documents in the record link Michaels and Benhaim to E.M.A. These include emails sent by Benhaim as President of E.M.A. on wh ich Michaels was copied, and documents laying out the relationship between E.M.A. and a thir d party payment processo r listing Michaels as Vice President of Sales and including his email address as president@emaonline.net.
Late in 2010, Defendants appear ed to have abandoned their first corporation and moved on to develop New Life. They used similar mean s for creating New Life and similar individuals controlled the corporation. Fo r example, New Life’s 2012 For Profit Corporation Annual Report also listed Michaels as the newly registered agent. In a series of emails with another third party payment processor, Benhaim identified Michaels as affiliated with New Life. In one particular email, Benhaim signed as president of E.M.A., ye t the email’s subject line referred to New Life.
Once again, in 2012, Defendants transitioned to another new company, from New Life to First United. An email sent from Benhaim to its third-party payment processor described the
transition:No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 6

As we discussed a few weeks ago, New Life Financial will be changing its company name and upgrading its process. That time has come, we have the new company incorporated as 1UC Inc. and wi ll be changing our name to 1st United Consultants . . . . We will be opening a new bank account today and will provide that information as soon as possible. We will have New Life running simultaneously to close out the existing files. (R. 5-2, Mot. for TRO Ex. Vol. I, at 195.)
Throughout this time, four Ca nadian corporations operated in tandem with the American companies. Many of the Canadian corporations used the same business address, commingled funds to pay each other’s employees and expenses, and frequently transferred funds from one to another. Additionally, each of the Canadian corpor ations listed either Benhaim or Michaels as president. The amount of evid ence in the record demonstrati ng the overlapping nature of the Canadian and American corporations is overwhe lming. Each of the co rporations had many common employees and administrators, the same individuals purchased email accounts and web URLs for each of the three American corporati ons, the American corporations used the same phone numbers at various points in time, and they used similar contracts and other documents when interacting with customers. Additiona lly, American and Canadian bank records show
numerous wire transfers between the American a nd Canadian corporations, and that one of the Canadian corporations paid a First United empl oyee. According to Canadian bank records, either Michaels, or Benhaim, or both cont rolled the Canadian co rporations’ accounts.

2. The Common Scheme

For the most part, each of the American corp orations operated in th e same manner. They conducted cold calls to target struggling Americ an consumers and made promises to consumers
that the record establishes were rarely, if ever, kept.

Defendants’ telemarketers followed written sc ripts when interacting with consumers. Although the record contains only written scripts from E.M.A. a nd First United, the declarations from numerous consumers defrauded by Defenda nts demonstrate that E.M.A., New Life, and First United operated in a similar manner. The telemarketers generally began their calls by congratulating consumers for qualifying for a special expense reduction program or asking
whether the consumer was interested in decrea sing his or her debts. Telemarketers generallyNo. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 7

stated that they were affiliated with the consum er’s creditors or lenders, were calling on behalf of the government, 5 or had special relationshi ps with creditors or lenders that enabled them to negotiate debt management deals that were uno btainable by other serv ice providers. (R. 157-3, Mot. for Summ. J. Ex. Vol. II, at 3039 (“The reason for my call today . . . is because your file has been placed on my desk for review this morni ng. It actually came up for review from your
current lender and creditors with our wholesale department regard ing your property . . . .”).) None of the scripts or consum er declarations provide evid ence that Defendants included a disclosure that they were not, in fact, associated with the governme nt or with consumers’ lenders
or creditors.
As these telephone conversations continued, th e telemarketers made various claims that they could negotiate with consumers’ lenders and credit card compan ies to reduce monthly payments, interest rates, and/or outstanding princi pal balances by as much as 50 to 70 percent. According to the scripts and declarations in the record, Defendants’ telema rketers explained that they only charged nominal fees for their servi ces and consumers could cancel at any time.
Numerous consumers’ declarations assert that they were instructed by Defendants’ representatives to stop paying thei r creditors or lenders and to allow Defendants to pay on their behalf. For example, one consumer stated in his declaration that New Life’s representative “instructed [him] to stop paying [h is] mortgage and credit cards . . . . He instructed [him] not to deal with [his] mortgage lender a nd the credit card companies if they called . . . about the missed payments.” (R. 5-4, Mot. for TRO Ex. Vol. II I, at 769.) Additionally, Defendants’ own Debt Appraisal Guide warned consumers as follows: “If you are in the process of dealing with collectors, you must always remember: DO NOT SPEAK TO YOUR CREDITORS UNTIL
YOU HAVE MAPPED OUT A CLEAR SOLUTION TO THE PROBLEM!” (R. 5-3, Mot. for

5 One script used by E.M.A. said, “I am calling on behalf of your creditors and the Obama Debt Relief Initiative and I have some GREAT NEWS for you!!! My job today is to give you information on how to cut your debt by 50% OR MORE!!!!” (R. 5-2, Mot. for TRO Ex. Vol. I, at 255.) A consumer declaration states, “Kane [at New Life] told me New Life helped homeowners lower their mortgage rates and monthly payments by modifying their mortgage loans through a program initiated by President Obama called the Home Affordable Modification Program, or HAMP.” (R. 5-3, Mot. for TRO Ex. Vol. II, at 536.) Another consumer stat ed that he received a call from a First United representative claiming that he “qua lified for a new program that President Obama signed a week earlier. He told me that my mortgage payment woul d be lowered.” (R. 5-4, Mot. for TRO Ex. Vol. III, at 826.)No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 8

TRO Ex. Vol. II, at 382.) 6 First United’s own “Objections, Rebuttals & FAQ” includes a scripted response to the question “Why should I stop paying my creditors?” (R. 157-3, Mot. for Summ. J. Ex. Vol. II, at 3055.) This response states, among other things, “When creditors do not receive payments, this impacts their bottom line and in so doing you effectively take back control
and force the creditors to negotiate with you!” ( Id .) Defendants’ program was allegedly designed such that consumers would pay mont hly amounts to Defendants, who represented during the initial calls that they would make payments on behalf of consumers and retain only a
small fee for their services.
Once the initial conversations ended, Defe ndants sent lengthy contracts and debt management guides to each of their new clients. These documents more accurately presented the services provided by Defendants. For example, one excerpt of the New Life contract reads as
follows:
1.5 This is an Agreement for your participation in th e Program, in which [New Life] will provide financial consultation and referral services . . . . [New Life] does not assume your debts. [New Life] agrees to provide its best efforts to produce a clear picture of your financial situation . . . . (R. 5-2, Mot. for TRO Ex. Vol. I, at 322.) The contract also stated,
1.9 [New Life] advises, counsels, and tr ies to assist you in placing your debts with a 3 rd Party service . . . . [New Life] will provide financial consultation and referral services . . . and refer you to the a ppropriate companies . . . . [New Life] is a fully independent service provider and is not affiliated in any way with the 3 rd parties and is not responsible for their performance . . . . ( Id .) On the top of the twenty-six th page of New Life and First Un ited’s debt appr aisal guides, a disclaimer appeared in a box stating, “Impor tant Disclaimer: . . . NEW LIFE FINANCIAL simply provides information on how to go about ma naging your finances and your debt.” (R. 5- 3, Mot. for TRO Ex. Vol. II, at 386.) And buri ed in the middle of these guides, which were approximately sixty pages long, were statements that clients must continue to pay their creditors and lenders, otherwise they risked negatively impacting their credit.

6 Further down on that same page, in smaller font, the guide states that “NOT MAKING PAYMENTS ON YOUR DEBTS WILL HAVE A NEGATIVE IMPACT ON YOUR CREDIT. NEW LIFE FINANCIAL DOES NOT ADVISE ITS CLIENTS TO NOT PAY THEIR BILLS OR HONOR THEIR COMMI TMENTS.” (R. 5-3, Mot. for TRO Ex. Vol. II, at 382.)No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 9

Despite the representations and disclaimers made in the written documents, consumers paid Defendants, expecting Defendants to then ma ke payments on their debts and see those debts decrease dramatically. Consumers often made several monthly payments totaling thousands of dollars based on these expectations. Defendants generally failed to notify consumers that their contracts were referred to third parties, and ma ny of these third partie s attempted to charge additional fees in the thousands of dollars on top of the fees already paid by consumers to obtain Defendants’ “services.” Once consumers reali zed they had been duped by Defendants, they often attempted to cancel their services and dema nd refunds of the thousands of dollars they had already paid Defendants. Many of their declarations document the difficulties they faced in obtaining refunds of their payments.

3. Do Not Call Registry Violations
A declaration from FTC investigator Mary Jo Vantusko explains that Defendants never
subscribed to the national Do Not Call Registry and did not pa y the necessary fees to obtain consumer telephone numbers from the Registry. Without subscribing, Defendants could not
have known which of their calls were made to individuals in the Registry. Numerous
declarations establish that Defe ndants’ telemarketers conducted co ld calls to consumers listed on the Registry, who did not have prior bus iness relationships with Defendants. See 16 C.F.R. § 310.4(b)(1)(iii)(B).

4. Investigations
The FTC began an investigation into Defendant s’ activities in 2011. They were assisted in their efforts by Canadian and United States agencies, including the RCMP, Quebec provincial authorities, the USPS, and the DOJ. These investig ations led the FTC to f ile a compla int in the instant case on Se ptember 25, 2012.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 10

II.

DISCUSSION
A. Defendants’ Motion for Further Discovery
1. Standard of Review Federal Rule of Civil Procedure 56(d) stat es, “If a nonmovant shows by affidavit or declaration that, for specified reasons, it canno t present facts essentia l to justify its opposition,
the court may : (1) defer considering the motion or deny it ; (2) allow time . . . to take discovery; or (3) issue any other ap propriate order.” Fed. R. Civ. P. 56 (d) (emphasis added). Due to this discretionary language, appellate c ourts “review a distri ct court’s decision as to the scope of discovery, including the denial of additional time for discovery, under an abuse of discretion
standard.” Jordan v. City of Detroit , No. 12–2296, 557 F. App’x 450, 455 (6th Cir. Feb. 21, 2014). See also Audi AG v. D’Amato , 469 F.3d 534, 541 (6th Cir. 2006). “An abuse of
discretion occurs when the reviewin g court is left with the defin ite and firm conviction that the trial court committed a clear error of judgment.” United States v. Hunt , 521 F.3d 636, 648 (6th Cir. 2008) (internal quotation marks omitted). Theref ore, this Court may only reverse the district
court’s conclusion as to Defendant s’ motion if it finds that the ruling was arbitrary, unjustifiable, or clearly unreasonable.
2. Analysis
“A party invoking [the] prot ections [of Rule 56(d)] mu st do so in good faith by affirmatively demonstrating . . . how postponement of a ruling on the motion will enable him . . .
to rebut the movant’s show ing of the absence of a ge nuine issue of fact.” Willmar Poultry Co. v. Morton-Norwich Prods., Inc. , 520 F.2d 289, 297 (6th Ci r. 1975). This Court examines a number of factors when determining whether the district court abused its discretion in failing to grant a motion for further discovery:
(1) [W]hen the appellant learned of the is sue that is the subject of the desired discovery; (2) whether the desired disc overy would have changed the ruling below; (3) how long the discovery period had lasted; (4) whet her the appellant was dilatory in its discovery efforts; and (5) whether the appellee was responsive to discovery requests.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 11

Plott v. Gen. Motors Corp., Packard Elec. Div. , 71 F.3d 1190, 1196–97 (6th Cir. 1995) (internal citations omitted); CenTra, Inc. v. Estrin , 538 F.3d 402, 420 (6th Cir. 2008). This Court’s main inquiry is “whether the moving party was diligent in pursuing discovery.” Dowling v. Cleveland
Clinic Found ., 593 F.3d 472, 478 (6th Cir. 2010). 7

In the instant case, Defendants’ attorney fi led a declaration with their motion, asserting that Defendants were diligent in thei r pursuit of discove ry and that the Plott factors weighed in their favor. However, when determining whether the district court abus ed its discretion, this Court may only reverse upon a findi ng that the ruling was arbitrar y, unjustifiable, or clearly unreasonable. In the instant case, there is sufficient evidence that the Plott factors were not applied in a clearly unreasonable, arbitrary, or unjustifiable manner.
First, Defendants knew of the i ssues that were the subjects of the desired discovery early on in the proceedings, and they we re aware that they no longer had access to their records two days after the complaint was filed against them.
Second, it does not appear that the desire d discovery would have changed the final
outcome below. 8 Although Defendants are correct that the thousands of pages of exhibits submitted by the FTC were cherry-picked to present the best evidence against Defendants, it is

7 According to the D.C. Circuit, “A . . . motion requ esting time for additional discovery should be granted ‘almost as a matter of course unless the non-moving party has not diligently pursued discovery of the evidence.’” Convertino v. U.S. Dep’t of Justice , 684 F.3d 93, 99 (D.C. Cir. 2012) (quoting Berkeley v. Home Ins. Co. , 68 F.3d 1409, 1414 (D.C. Cir. 1995)). Similarly, the First Circuit has stated that [c]onsistent with the salutary purposes underlying Rule 56(f), district courts should construe motions that invoke the rule generously, holding parties to the rule’s spirit rather than its letter . . . . This does not mean, however, that Rule 56(f) has no bite or that its prophylaxis extends to litigants who act lackadaisically; use of the rule not only requires meeting several benchmarks, but also requires due diligence both in pursuing discovery before the summary judgment initiative su rfaces and in pursuing an extens ion of time thereafter. In other words, Rule 56(f) is designed to minister to the vigilant, not to those who slumber upon perceptible rights. Resolution Trust Corp. v. N. Bridge Assocs. , 22 F.3d 1198, 1203 (1st Cir. 1994) (citation omitted). (Rule 56(f) is now designated as Rule 56(d).)

8 Defendants assert that they need ed access to their computer files to establish that they purchased “scrubbed lists” of leads that were in compliance with the MARS Rule. This is the one piece of evidence requested by Defendants that conceivably could have altered the outcome below in some small way.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 12

not clear how additional evidence would have establis hed a dispute of material fact on any of the
issues in this case.

Defendants claim that access to more consumer contracts would show that the actual written representations made to consumers direc tly contradict and actually correct Defendants’ verbal communications. However, the record already contains numerous contracts between consumers and each of the three American corpor ate defendants. Adding more contracts to the
record would not have led to a different outcome.
Defendants also claim that bank records, ba nk statements, and other corporate records would have established the corporate hierarch y to prove that Benhaim and Michaels neither controlled nor knew of the unlawful business prac tices of the corporations. However, hundreds of pages of evidence already in the record, in cluding official bank records and receipts, list
Benhaim and Michaels in various leadership positions with each of the corporations. Emails and formal corporate documents already in the record establish that Benhaim and Michaels served as and represented that they were either president or vice president of each of the corporate entities, including the Canadian corporations.
Finally, Defendants assert that they should have been gi ven the opportunity to access documents showing that they changed their busin ess models to comply with the newly-changed laws. The record, however, contains sufficient evidence of each corporation’s activities during the period of time from 2010 through 2012. It is difficult to see how most of the requested evidence would have changed the outcome below.

The third Plott factor does not weigh in either pa rty’s favor. Although the discovery period was abbreviated, it lasted for nearly five months, which was a sufficient amount of time
for Defendants to conduct some discovery.

The fourth Plott factor does not weigh strongly in either party’s favor. Although Defendants repeatedly notified th e district court that they c ould not obtain their records and attempted some means of discovery, they did not file a formal discovery request until June 18, 2013, and they did not pursue other meaningful forms of discovery.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 13

Early on in the proceedings, Defendants hire d Canadian counsel to seek return of Defendants’ property from the Canadian authorities . In fact, Defendants notified the court that on or about May 20, 2013, the Canadian authorities ag reed to return their documents. However, as of the filing of their motion, Defendant s had not yet receiv ed those records.
During hearings and conferences, Defendants re peatedly reminded the district court and the magistrate judge that they continued to lack access to their own records. Defendants issued subpoenas on January 3, 2013, directing the DOJ to produce documents and information within 30 days of service. However, as the DOJ’s le tter in response to that request indicates, the subpoenas were invalid because they failed to co mply with DOJ regulations and civil procedure rules, and even had they been valid, DOJ’s regulations barred production of the documents. Defendants did not attempt to follow up on that le tter, challenge its legal assertions, or narrow their requests. They f iled a notice of discovery dispute with the court on June 5, 2013, alleging that the FTC and the DOJ were not cooperating w ith their requests for assistance in obtaining files from the RCMP.
Defendants failed to attempt other methods for obtaining their desi red materials. For example, although the RCMP eventually turned over their files, it is possible that they could have obtained them earlier by following procedur es pursuant to Canada Criminal Code § 490. 9 Additionally, rather than submitting complaint after complaint that the DOJ failed to comply with their requests for documents, Defendants coul d have used other methods to obtain many of those documents, including serving proper subpoenas on banks, payment processors, or other entities, taking depositions of the consumers whose declarations already appeared in the record, or serving interrogatories on co-Defendants who were no long er parties in the case.
Although there is some evidence in the record that Defendant s pursued their materials in a diligent manner, they failed to file a formal request for production until one month before the relevant discovery deadline. They only filed th e instant motion for additional discovery on July 25, 2013, more than three weeks af ter the July 1, 2013 deadline for completing discovery needed

9 This process may not be as useful as the FTC assert s because it appears that there is an exception for records in an ongoing investigation.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 14

to support or defend dispositive motions and days after the July 22, 2013 deadline for filing opposition to the motion for summary judgment.
Finally, the fifth Plott factor does not weigh in either party’s favor. Defendants claim that the FTC was dilatory in responding to Defe ndant’s first discovery request. This “request” was an email entitled “Discovery request” se nt from Defendants’ coun sel to the FTC on May 9, 2013. The entire email requests as follows: (1) “Please send us allof the discovery that you have not turned over”; (2) “Please se nd us your intended witness list”; and (3) “Please inform us the results of your ordered discussion with the Depart ment of Justice regarding discovery in this case.” (R. 163-1, 7/24/2013 Email, at 4104.) The fi rst of these requests wa s improper because it did not follow required procedure and did not de scribe with particularity the items sought. See Fed. R. Civ. P. 34. Although the FTC objected to the “request” on those grounds and others, the FTC offered to voluntarily produce documents it received in response to civil investigative demands and subpoenas issued since the complain t was filed. The second request for the FTC’s
intended witness list was also im proper because the parties were no t required to file witness lists until three days prior to the final pre-tria l conference scheduled for September 17, 2013. The third request was for the FTC to provide inform ation about a discussion with the DOJ regarding discovery in their case. The FTC responded in a letter that they were never ordered to discuss discovery with the DOJ, yet “[ they would] inform [Defendant s] of the results of [their] discussion when there [was] something to re port.” (R. 163-2, 5/13/2013 Email, at 4108.)

Defendants filed a notice of discovery dispute regarding th e above-referenced request, and that dispute was resolved through a June 7, 2013 minute order requiring the FTC to produce supplemental disclosures and pa rticular documents. The FTC produced those documents on June 17, 2013, but Defendants found that they ha d not received all releva nt materials in the FTC’s possession. On June 18, 2013, Defendants served the FTC with their first formal request for production, seeking access to the documents se ized by the Canadian government. The FTC turned those documents over in encrypted form just days before the deadline for filing an opposition to the motion for summary judgment. Although the FTC appears to have taken its time in remitting those documents, it was within its right to do so because it complied with courtNo. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 15

deadlines for responding to production requests. Therefore, the fifth Plott factor does not weigh strongly in either party’s favor.
Defendants assert that “there was absolutely no reason that the Di strict Court could not have granted E.M.A. Defendants the additional time they requested in their Rule 56(d) Motion . . . because E.M.A. Defendants’ business pr actices were already ‘enjoined . . .’ and their businesses had been ‘completely s huttered.’” Defs.’ R. Br. at 15. This is true. However, Defendants had wrongly taken milli ons of dollars from American consumers who continued to face financial struggles caused by their interactions with Defendants. As a result, further delay of the proceedings and the ultimate restitutio n award could have cause d great prejudice to consumers. Although Defendants may have belatedl y expended some efforts in their pursuit of discovery, and discovery might have provided some minimal ev idence to counter the FTC’s claims, the district court did not abuse its discretion in denying Defendants’ Rule 56(d) motion.
B. Defendants’ Motion to Stay Proceedings
1. Standard of Review “The power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cau ses in its docket with economy of time and effort for itself, for counsel and for litigants, and the en try of such an order ordinarily rests with the sound discretion of the District Court.” Ohio Envtl. Council v. U.S. Dist. Court, S. Dist. of Ohio, E. Div. , 565 F.2d 393, 396 (6th Cir. 1977) (citation and internal quotation marks omitted). See also
Clinton v. Jones , 520 U.S. 681, 706 (1997) (“[T]he District Court has broad discretion to stay proceedings as an incident to its power to cont rol its own docket.”). As a result, this Court
reviews a district court’s decisi on denying a party’s motion to stay trial proceedings for abuse of
discretion. See Louis Vuitton Malletier S.A. v. LY USA, Inc. , 676 F.3d 83, 96 (2d Cir. 2012). This is a highly deferential standard, Hardyman v. Norfolk & W. Ry. Co. , 243 F.3d 255, 267 (6th Cir. 2001), especially because “[a] stay of civil proceedings due to a pending criminal investigation is an extraordinary remedy,” United States v. Ogbazion , No. 3:12–cv–95, 2012 WL 4364306, at *1 (S.D. Ohio Sept. 24, 2012) (internal quotation marks omitted). “An abuse of
discretion occurs if the district court relies on clearly erroneous findings of fact, applies the wrong legal standard, misapplies the correct legal standard wh en reaching a conclusion, orNo. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 16

makes a clear error of judgment.” Young v. Nationwide Mut. Ins. Co. , 693 F.3d 532, 536 (6th Cir. 2012). See also Plain Dealer Publ’g Co. v. City of Lakewood , 794 F.2d 1139, 1148 (6th Cir. 1986) (“Under the abuse of discre tion standard, an appellate cour t may overturn a lower court’s ruling only if it finds that the ruling was arbi trary, unjustifiable or cl early unreasonable.”).

2. Analysis
It is clear that “nothing in the Constitution re quires a civil action to be stayed in the face of a pending or impending criminal indictment,” Chao v. Fleming , 498 F. Supp. 2d 1034, 1037 (W.D. Mich. 2007), and “there is no requirement that a civil proceeding be stayed pending the outcome of criminal proceedings,” S.E.C. v. Novaferon Labs, Inc. , No. 91-3102, 941 F.2d 1210, at *2 (6th Cir. Aug. 14, 1991). 10 As a result, district courts have “broad discretion in determining whether to stay a civil action whil e a criminal action is pending or impending.”
Chao , 498 F. Supp. 2d at 1037.
District courts generally cons ider and balance certain factor s when determining whether a stay of civil proceedings is appropriate in a given case:
1) the extent to which the issues in the criminal case overlap with those presented in the civil case; 2) the status of the case, including whether the defendants have been indicted; 3) the privat e interests of the plaintiffs in proceeding expeditiously weighed against the prejudice to plainti ffs caused by the delay; 4) the private interests of and burden on the defendants; 5) the interests of the courts; and 6) the public interest.

Id . (internal quotation marks omitted). In addition to those factors, district courts “should
consider ‘the extent to which the defendant’s fifth amendment rights are implicated.’” Keating v. Office of Thrift Supervision , 45 F.3d 322, 324 (9th Cir. 1995) (quoting Fed. Sav. & Loan Ins. Corp. v. Molinaro , 889 F.2d 899, 902 (9th Cir. 1989)). “[T] he burden is on the party seeking the stay to show that there is pressing need for de lay, and that neither the other party nor the public will suffer harm from entry of the order.” Ohio Envtl. Council , 565 F.2d at 396. The most important factor is the balance of the hardships, but “[t]he district court must also consider

10 See also S.E.C. v. Dresser Indus., Inc. , 628 F.2d 1368, 1374 (D.C. Cir. 1980) (“The civil and regulatory laws of the United States frequently overlap with the cr iminal laws, creating the possibility of parallel civil and criminal proceedings, either successive or simultaneous. In the absence of s ubstantial prejudice to the rights of the parties involved, such parallel proceedings are unobjectionable under our jurisprudence.”).No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 17

whether granting the stay will further the inte rest in economical use of judicial time and
resources.” Int’l Bhd. of Elec. Worke rs v. AT&T Network Sys. , No. 88–3895, 879 F.2d 864, at *8 (6th Cir. Jul. 17, 1989) (i nternal citations omitted).
In the instant case, Defendants asse rt that the renewed motion to stay
made clear that: (1) a criminal indictment was imminent and a stay was necessary to protect Mr. Michaels’ Constitutional ri ghts; (2) granting a stay would promote the interests of the court in judicial economy and prev enting discovery abuses; (3) a stay would not cause any harm to the public interest as EMA Defendants were enjoined from—and did not intend to—pursu e their respective bus inesses, and the imminent criminal prosecution would serve to further the public interest; and (4) a stay was crucial in this case because EMA Defendants still had no access to the vital discovery necessary to defend against the FTC’s claims. Defs.’ Br. at 41. Basically, Defendants’ argument regarding the motion to stay is twofold: (1) a stay would have saved the district court from having to deal with issues likely to arise in the event that criminal and civil proceedings went forward simultaneously; and (2) a stay would have protected Defendants from discovery a buses and infringementon Michaels’ Fifth Amendment rights.
An analysis of the factors listed above demons trates that the distri ct court did not abuse its discretion in denying Defendants’ motion. The fi rst factor regarding the overlap of issues in criminal and civil proceedings does not weigh in favor of either party. Even now, more than a year after the district court deni ed Defendants’ motion, there has yet to be a criminal case or even an indictment filed. As a result, it is unclear which crimes Michaels would be charged with. Even if they were to overlap, becau se there is not yet a criminal ca se, it cannot be said that this factor weighs in De fendants’ favor.
Similarly, the second factor regarding the status of the criminal case does not weigh in favor of either of the parties.
A stay of a civil case is most appropria te where a party to the civil case has already been indicted for the same conduc t for two reasons: first, the likelihood that a defendant may make incriminating st atements is greatest after an indictment has issued, and second, the pr ejudice to the plaintiffs in the civil case is reduced since the criminal case will likely be quickly resolved due to Speedy Trial Act considerations.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 18

Trs. of Plumbers & Pipefitters Nat. Pe nsion Fund v. Transworld Mechanical , 886 F. Supp. 1134, 1139 (S.D.N.Y. 1995). Therefore, courts generally do not stay proceedings in the absence of an
indictment. Id . In the instant case, an indictment had not yet issued at the time the district court denied Defendants’ renewed motion to stay the pr oceedings. As a result, this factor and the
concerns associated with it do not we igh in favor of granting the motion.
The third factor regarding the plaintiff’s inte rests clearly weighs in favor of denying the motion. Although the FTC does not have a personal interest in moving swif tly through the case, the FTC pursued claims on behalf of consumers whose interactions with Defendants caused them to suffer great financial hardship. After following Defendants’ instructions and failing to make mortgage payments, many of these individuals were able to save their homes from foreclosure by borrowing money from family or friends, but they now face worse circumstances than before they signed up and paid for Defendants’ services. Some still faced foreclosure as of the time they provided their declarati ons. Many of Defendant s’ customers suffered hefty losses after paying for services that they never received. This factor weighs heavily in favor of denying the motion for a stay of proceedings because these i ndividuals are desperate to recover their lost funds as quickly as possible.
On the other hand, the fourth factor weighs in Defendants’ favor. As Defendants have repeatedly asserted, they were unable to obtain their own records from the Canadian government until it was too late to respond to the FTC’s motion for summary judgment. At the time the district court denied the stay, the judge knew that the Canadian authorities had agreed to provide some of the files, but it was unclear how long th at might take. Because there was no indictment, however, the Fifth Amendment concerns expres sed by Defendants are not very compelling.

The fifth and sixth factors do not weigh strongly in either part y’s favor. It was unclear at the time the motion was filed how long a stay mi ght last. If the court had waited for an indictment, for example, the stay would continue to this day, causing unnecessary delay for the court. Although there may have been a mini mal risk of continued misconduct by Defendants because they entered into a stipulated injuncti on with the FTC, Defendants’ former customers
were in dire need of the funds that were wrongly taken from them. The public interest is furthered where individuals’ injuries are remedied in a timely manner.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 19

Because the factors, when considered togeth er, do not weigh heavily in either party’s favor, it cannot be said that th e district court abused its di scretion in denying Defendants’ renewed motion for a stay of proceedings.
C. The FTC’s Motion for Summary Judgment
1. Standard of Review

This Court reviews a district c ourt’s grant of summary judgment de novo , applying the
same standards as the district court. Villegas v. Metro. Gov’t of Nashville , 709 F.3d 563, 568 (6th Cir. 2013).
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the m ovant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In deciding whether summary judgment wa s appropriate, this Cour t views the “evidence in the light most favorable to the nonm oving party.” Himmel v. Ford Motor Co. , 342 F.3d 593, 598 (6th Cir. 2003) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586 (1986)). However, “the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported moti on for summary judgment; the requirement is
that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48 (1986). A genuine issue of material fact exists where “t here is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Id . at 249.
In the instant case, the FTC’s summary judgment motion was unopposed because Defendants failed to file a brief in opposition to the motion. This did not, however, end the district court’s analysis. The court below acknowledged that it “may not grant Plaintiff’s unopposed motion for summary judgment without conducting its own, searching review.” E.M.A. Nationwide, 2013 WL 4545143, at *1. Even where a party “offer[s] no timely response to [a] [] motion for summa ry judgment, the District Court [m ay] not use that as a reason for granting summary judgment without first examin ing all the materials properly before it under Rule 56(c).” Smith v. Hudson , 600 F.2d 60, 65 (6th Cir. 1979). This is so because “[a] party is never required to respond to a motion for summary judgment in order to pr evail since the burden of establishing the nonexistence of a material factual dispute alwa ys rests with the movant.” Id

. at 64. Therefore, even where a motion for summ ary judgment is unopposed, a district court mustNo. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 20

review carefully the portions of the record s ubmitted by the moving party to determine whether a genuine dispute of ma terial fact exists. 11

2. Analysis

The district court considered the evidence s ubmitted by the FTC with its initial motion for a TRO and a preliminary injunction as well as the evidence submitted with its motion for summary judgment (over 2,000 pages of documents) to find that no genuine dispute of material fact existed regarding Defendants’ violations of the FTC Act, the TSR, and the MARS Rule.
E.M.A. Nationwide , 2013 WL 4545143, at *4–6. The district court also found that Defendants operated as a “common enterprise” and that Mich aels and Benhaim could be held personally liable for injunctive and monetary relief for these violations. Id . at *6–8.
On appeal, Defendants assert so me arguments that were not pr esented to the district court due to their failure to oppose the motion for su mmary judgment. These arguments were waived because they were not first considered by the dist rict court. Although parties may brief an issue before this Court, “the failure to present an issue to the district court forfeits the right to have the argument addressed on appeal.” Armstrong v. City of Melvindale , 432 F.3d 695, 700 (6th Cir. 2006). Therefore, rather than consider Defe ndants’ newly-asserted arguments, this Court reviews the district court’s articulated analysis to ensure that it did not overlook any genuine dispute of material fact.

a. Violation of the FTC Act
Pursuant to Section 5 of the FTC Act, the FTC is “empowered and directed to prevent persons, partnerships, or corporations . . . fr om using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C. § 45(a). “‘[M]isrepresentations of material facts made for the purpose of inducing consumers to purchase services constitute unfair or deceptive acts or practices forbidden by Section 5(a).’” F.T.C. v. World Travel Vacation Brokers, Inc. , 861 F.2d 1020, 1029 (7th Cir. 1988) (quoting F.T.C. v. Kitco of Nevada, Inc. , 612 F. Supp. 1282, 1291 (D. Minn. 1985)).

11 However, “[n]either the trial nor appellate court . . . will sua sponte comb the record from the partisan perspective of an advocate for the non-moving party.” Guarino v. Brookfield Tp. Trs. , 980 F.2d 399, 410 (6th Cir. 1992).No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 21

To prevail on this claim and to establish Defendants’ liability under the FTC Act, the FTC must demonstrate that “(1) there was a repr esentation; (2) the representation was likely to mislead customers acting reasonably under the circumstances, and (3) the representation was
material.” F.T.C. v. Tashman , 318 F.3d 1273, 1277 (11th Cir. 2003). See also F.T.C. v. Int’l Comp. Concepts, Inc. , No. 5:94cv1678, 1995 WL 767810, at *2 (N.D. Ohio Oct. 24, 1995). 12

A representation is material if it is likely to affect a consumer’s decision to buy a product
or service. Int’l Comp. Concepts , 1995 WL 767810, at *2. Defendants’ representations regarding their ability to negotiate incredible de bt settlement deals were certainly material. A
number of Defendants’ customers st ated in their declarations that they had chosen not to sign with other debt relief service providers who were unable to make promises similar to those made by Defendants. Defendants’ statements promisi ng up to 70 percent reductions in mortgage or credit card debt would affect any consume r’s decision to buy Defendants’ services.
Determining whether the representations were deceptive and likely to mislead consumers acting reasonably under the circumstances is a sli ghtly more complicated question in the instant
case. To make this determin ation, a court need not find that defendants intended to deceive

consumers. See F.T.C. v. Freecom Commc’ns, Inc. , 401 F.3d 1192, 1202 (10th Cir. 2005);
United States v. Johnson , 541 F.2d 710, 712 (8th Cir. 1976)). Instead, we look to “the likely effect the promoter’s handiwork will have on the mind of the ordinary consumer.” Freecom
Commc’ns , 401 F.3d at 1202 (citing F.T.C. v. Sterling Drug, Inc. , 317 F.2d 669, 674 (2d Cir. 1963)). “The important criterion in determini ng the meaning of an advertisement is the net impression that it is likely to make on the general populace.” Nat’l Bakers Servs., Inc. v. F.T.C. , 329 F.2d 365, 367 (7th Cir. 1964). See also Int’l Comp. Concepts , 1995 WL 767810, at *3 (“In determining the message conveyed by a represen tation, it is the overall net impression that

12 Although the FTC is not required to prove consumer reliance to establish a § 5 violation and to obtain an injunction against a wrongdoer, “such proof is necessary to establish the right to consumer redress.” F.T.C. v. Freecom Commc’ns, Inc. , 401 F.3d 1192, 1205 (10th Cir. 2005) (emphasis added). The FTC need not establish that a particular consumer relied on and was injured by Defendants’ misrepresentations. Instead, “[t]o raise a presumption of reliance, the FTC need only show (1) the business entity made material misrepresentations likely to deceive consumers, (2) those misrepre sentations were widely disseminate d, and (3) consumers purchased the entity’s products.” Id . at 1206 (citing F.T.C. v. Kuykendall , 371 F.3d 745, 765 (10th Cir. 2004) (en banc)). In the instant case, there is ample evidence th at Defendants’ misrepresentations were likely to deceive and were widely disseminated to consumers. Additionally, reams of evidence in the record demonstrate that many consumers purchased Defendants’ services and lost thousands of dollars without obtaining anything in return.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 22

counts. Fine print or ineffective disclaimers do not change the message conveyed if the overall net impression is different.”).
Defendants do not appear to contest that the re presentations were made or that they were material. Defendants do, however, assert that th e net impression of those representations is an issue of fact that must be decided by a jury, precluding summary judgment . They point to their written materials, including contracts and debt relief guides, which more accurately identify the services provided by Defendants, to assert that the overall net impression of those representations was not likely to mislead and improperly indu ce consumers to purchase their services.
Although defendants claim that the net impression of their representati ons is a question of fact to be determined by a jury, courts ma y decide this issue on summary judgment. See GenCorp, Inc. v. Am. Int’l Underwriters , 178 F.3d 804, 811 (6th Cir. 1999) (On summary judgment, “’we must decide whether the eviden ce presents sufficient di sagreement to require submission to a jury or whether it is so one-sid ed that one party must prevail as a matter of law.’”). For example, the Ninth Circuit affirmed a district court’s grant of summary judgment in F.T.C. v. Cyberspace.Com, LLC , after finding that fine print notices placed on the reverse side of documents sent to consumers were insufficient to overcome the overwhelmingly deceptive nature of the front side of the comm unications. 453 F.3d 1196, 1200 (9th Cir. 2006) (summarizing case law from other circuits in which fine print disclaimers are insufficient to overcome evidence of deceptive messaging). See also F.T.C. v. Dinamica Financiera LLC , No. CV 09–03554 MMM PJWx, 2010 WL 9488821, at * 7 (C.D. Cal. Aug. 19, 2010) (granting summary judgment for the FTC where numerous decl arations in the record demonstrated that
consumers believed the defenda nt’s misrepresentations); F.T.C. v. Gill , 71 F. Supp. 2d 1030, 1044 (C.D. Cal. 1999), aff’d , 265 F.3d 944 (9th Cir. 2001) (granting summary judgment on an FTC Act claim even after the defendants presen ted evidence of more accu rate statements and disclaimers found in consumer contracts).
Although Defendants later provide d written documents, includi ng a contract that more accurately characterized their serv ices, there is no genuine dispute of material fact regarding the net impression of Defendants’ repr esentations to consumers. A c ourt need not look past the first
contact with a consumer to determine the ne t impression from that contact, and a court mayNo. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 23

consider individual advertisements or message s to determine the net impression. As the First Circuit has stated with regard to advertisements,
[e]ach advertisement must stand on its ow n merits; even if other advertisements contain accurate, non-deceptive claims, a vi olation may occur with respect to the deceptive ads. Disclaimers or qualifications in any particular ad are not adequate to avoid liability unless they are su fficiently prominent and unambiguous to change the apparent meaning of the claims and to leave an accurate impression. Anything less is only likely to cause confusion by creating contradictory double meanings. Removatron Int’l Corp. v. F.T.C. , 884 F.2d 1489, 1497 (1st Cir. 1989) (internal citation omitted). Similarly, the Fifth Circuit explained that in cases where a defendant deploys a marketing campaign with a series of discrete communicati ons with consumers, “each advertisement must stand on its own merits; even if other advertisements contain accurate, non-deceptive claims, a violation may occur with respect to the deceptive advertisements.” F.T.C. v. Fin. Freedom Processing, Inc. , 538 F. App’x 488, 489–50 (5th Cir. 2013). See also F.T.C. v. Med. Billers Network, Inc. , 543 F. Supp. 2d 283, 304 (S.D.N.Y. 2008). Therefore, the FTC Act is violated “if
the first contact or interview is secured by deception . . . , even though the true facts are made known to the buyer before he enters in to the contract of purchase.” Carter Prods. v. F.T.C. , 186 F.2d 821, 824 (7th Cir. 1951) (i nternal citation omitted). See also Resort Car Rental Sys.,
Inc. v. F.T.C. , 518 F.2d 962, 964 (9th Cir. 1975); Exposition Press, Inc. v. F.T.C. , 295 F.2d 869, 873 (2d Cir. 1961).
In the instant case, Defendants provided clea rer descriptions of their services and disclaimers regarding mortgage payments in thei r written materials. However, these materials were only sent to consumers after the initia l telephone conversations during which consumers provided personal contact and financial inform ation and agreed to enroll in Defendants’ programs. Numerous consumer declarations a nd scripts from E.M.A. and First United confirm that the initial telephone conversations used to so licit consumers consiste d almost entirely of material misrepresentations that did, in fact , induce consumers into purchasing Defendants’ services at very high costs. Defendants cannot ma ke considerable material misrepresentations to consumers and then bury corrections and di sclaimers in subsequent communications. See F.T.C.
v. Gill , 71 F. Supp. 2d 1030, 1044 (C.D. Cal. 1999), aff’d , 265 F.3d 944 (9th Cir. 2001) (findingNo. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 24

that disclaimers appearing in contracts signed by consumers were insufficient to create a genuine dispute of material fact “because each representation must stand on its own merit, even if other representations contain accurate , non-deceptive information.”).
Some courts have noted that “[w]hile proof of actual deception is unnecessary to establish a violation of Section 5, such proof is highly pr obative to show that a practice is likely to mislead consumers acting reason ably under the circumstances.” F.T.C. v. USA Fin., LLC , 415 F. App’x 970, 973 (11th Cir. 2011) (internal quotation marks omitted). See also F.T.C. v. Affiliate Strategies , 849 F. Supp. 2d 1085, 1106 (D. Kan. 2011) (f inding persuasive the fact that all consumer declarations in the record “state[d ] that they purchased [t he] services from [the defendant] based on telemarketers’ assurances th at they were guaranteed or highly likely to receive a grant. They each paid thousands of dollars . . . with the understanding that [they would receive the promised service].”).
In the present case, it is clear from the ev idence in the record that Defendants’ messages actually deceived consumers, leading them to si gn contracts for services promised during their initial telephone conversations with Defendant s’ telemarketers. Although actual consumer deception is not necessary to establish Defendants’ violation of Section 5, the fact that so many consumers were persuaded by Defendants’ re presentations is highly probative of their deceptiveness. Even when viewed together, the net impression of the various contacts between consumers and Defendants is one of misrepresentation and deception. The disclaimers and more accurate information were buried in written documents received by consumers only after they were misled into purchasing Defendants’ servic es. And even after consumers signed the more accurate contracts and received the debt manage ment guides, Defendants continued to mislead
their clients. It is clear from the record that Defendants’ telemarketers continued to deliver inaccurate and deceptive messages during subseque nt follow-up calls. Consumer declarations
demonstrate that numerous communications before and after the contract-signing led them to pay
thousands of dollars for Defendants’ services.
Therefore, the district cour t did not err in granting summa ry judgment on this claim.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 25

b. Violations of the TSR
Like the FTC Act, the TSR targets deceptive messaging by prohibiting sellers or telemarketers from using “deceptive telemarke ting acts or practices.” 16 C.F.R. § 310.3. “Identical principles of deception from Sectio n 5 of the FTC Act apply to the TSR, and a violation of the TSR amounts to both a deceptive act or practice and a violation of the FTC Act.”
F.T.C. v. Wash. Data Res. , 856 F. Supp. 2d 1247, 1273 (M.D. Fla. 2012). See also F.T.C. v. Stefanchik , 559 F.3d 924, 929–30 (9th Cir. 2009).
The FTC asserted and the district court agr eed that Defendants viol ated the TSR by (1) misrepresenting the total cost of their services , in violation of 16 C. F.R. § 310.3(a)(2)(i); (2) misrepresenting material aspects of their services, in violation of § 310.3(a)(2 )(iii); (3) requesting and receiving fees before negotiating or settling th e terms of consumers’ debts, in violation of § 310.4(a)(5)(i); and (4) calling numb ers on the National Do Not Call Registry, in violation of § 310.4(b)(1)(iii)(B). Sufficient evidence in the record establishes that Defendants’
telemarketers made each of the above-mentioned material misrepresentations, leading consumers to purchase their services. A dditionally, numerous declarations in the record establish that
Defendants’ telemarketers called consumers whos e numbers were listed on the National Do Not Call Registry. For example, declarant Jeffrey Berry stated that since January 15, 2006, he has been registered on the FTC’s Do Not Call Regist ry. Despite that fact , he was contacted by a First United representative in March 2012, who sought personal information from him, including his Social Security number. Another declarant, Vivian Allen, indicate d that her number was registered on the Do Not Call Registry at the time she received her first phone call from a New Life representative. Neither of these individua ls had prior existing busin ess relationships with
Defendants.
The only argument asserted by Defendants regarding their violations of the TSR is that the contracts signed by consumers correctly set fo rth the fees to be paid and services to be rendered by Defendants. As explai ned above, however, the net impression of the telemarketers’ representations to consumers was deceptive a nd likely to mislead consumers acting reasonably
under the circumstances.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 26

c. Violations of the MARS Rule
The MARS Rule, almost all of whic h went into effect on December 29, 2010, 13 prohibits entities offering mortgage relief services from making certain represen tations and engaging in certain deceptive practices. Among other thin gs, these entities are prohibited from doing the following: (1) representing that a consumer “ca nnot or should not contact or communicate with his or her lender or servicer”; (2) misrepresent ing “[t]he likelihood of negotiating, obtaining, or arranging any represented servi ce or result”; (3) misrepresenti ng that “a mortgage assistance
relief service is affilia ted with, endorsed or approved by, or ot herwise associated with . . . [t]he United States government . . . [or t]he maker, hol der, or servicer of the consumer’s dwelling loan”; and (4) “[r]equest[ing] or receiv[ing] pa yment of any fee or other consideration until the consumer has executed a written agreement between the consumer and the consumer’s dwelling loan holder.” 12 C.F.R. §§ 1015.3, 1015.5. Add itionally, as the district court properly recognized, mortgage assistance relie f service providers must make di sclosures that they are “not associated with the government, . . . [that thei r] service is not approved by the government or [the consumer’s] lender[,]” and that they ma y cancel the service at any time. 12 C.F.R. §§ 1015.4(a)(1), (b)(1).
There is clear, undisputed evidence in th e record that Defendants made verbal representations in violation of the MARS Rule and that their written documents violated
elements of the Rule as well. 14 First, there is ample evidence th at after the effective date of the Rule, Defendants told consumers not to speak w ith their mortgage lenders (both orally and in their written materials). For example, in July 2011, consumer Gloria Bernardo was instructed by a New Life representative not to pay her mortgage lender and not to answer the lender’s calls. Elisea R. Cadaoas received simila r instructions from a New Life representative in June 2011. She described her encounter with New Life as follows:

13 The advance fee ban contained in 12 C.F.R. § 1015.5 went into effect on January 31, 2011.

14 Although Defendants claim that they could not have violated the MARS Rule because their “customer contracts explicitly provided that New Life contracted to provide its customers financial consulting services— not mortgage assistance relief services,” De fs.’ Br. at 54, it is clear from c onsumer declarations that New Life represented itself as an entity providing mortgage relief services and consumers relied on those representations.No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 27

Kane instructed me to no longer send my mortgage payment directly to American Home Mortgage. Instead, I would now pa y New Life . . . and New Life would pay American Home Mortgage. . . . Kane told me that I did not have to accept calls from American Home Mortgage unless I wanted to do so. Kane also told me not to worry. I put my trust in Kane and New Life. (R. 5-3, Mot. for TRO Ex. Vol. II, at 514.) Defendants’ own debt appraisal guide, which Bernardo, Cadaoas, and others received after enro lling in Defendants’ mortgage debt relief services, instructed consumers not to contact their le nders. The Guide stat es, “If you are in the process of dealing with colle ctors, you must always remember: DO NOT SPEAK TO YOUR
CREDITORS UNTIL YOU HAVE MAPPE D OUT A CLEAR SOLUTION TO THE PROBLEM!” ( Id . at 382.)
Further, the record contains undisputed ev idence that Defendants misrepresented the
amount of relief consumers could obtain from thei r services and requested fees from consumers without first obtaining agreements from their lend ers. For example, Katherine Patten explained
in her declaration that she be gan receiving calls from Firs t United in May 2012 offering her incredible mortgage debt relief and requesting fees before ever procuring an arrangement with her lender. During those calls, she explains, “[Thei r representative] told me that 1st United could eliminate the $110,000 that I was in arrears on mymortgage and bring my payments down to $550.00 per month for four months. [I believed] that if I successfully paid 1st United . . . , they would begin negotiations with Chase.” (R. 5-4, Mot. for TRO Ex. Vol. III, at 748.)

Defendants also failed to make disclosures re garding their lack of association with the government, the fact that their service was not approved by the government or the lender, and
that the service could be canceled at any time. For example, during a conversation between First United representative Brandon Smith and an undercover FTC agent, Smith failed to include any of the required disclosures. Additionally, “none of the scripts [in the record] include a disclosure
that the Defendants are not associated with th e government or consumer’s lenders.” (R. 157-2, Mot. for Summ. J., Ex. Vol. I, at 2935.) In f act, many of Defendants’ re presentatives made false representations that the program was affiliated with the Obama admi nistration. For example, one consumer’s declaration described a telephone c onversation with a New Life telemarketer as follows: “Kane told me New Life helped homeown ers lower their mortgage [loans] . . . through a program initiated by President Obama.” (R . 5-3, Mot. for TRO Ex. Vol. II, at 536.)No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 28

Defendants claim that “[e]ven if New Life made such represen tations or engaged in this conduct, it is not evidence that E.M.A. violated th e law . . . . [because] the District Court cites to no evidence that E.M.A. repres ented it would provide mortgage assistance relief services, or made any prohibited representations in connection w ith . . . such services.” Defs.’ Br. at 55. Although none of the evidence in th e record links E.M.A. to mortga ge debt relief services or any substantial activity after th e effective date of the MARS Rule, eachof these corporations is to be held jointly and severally liable as they are part of a common enterprise, as explained below.

d. Imposition of Joint and Several Liability Against All Defendants
i. Individual Liability of Michaels and Benhaim
“To obtain injunctive relief ag ainst an individual for a busine ss entity’s acts or practices, the FTC must prove the entity violated § 5. The FTC must further show the individual participated directly in the busin ess entity’s deceptive acts or pr actices, or had the authority to
control them.” Freecom Commc’ns , 401 F.3d at 1203 (internal citation omitted). Additionally, the FTC must put forth evidence to show that the individual defendant “knew or should have known of the alleged decep tive misrepresentation.” Wash. Data Res. , 856 F. Supp. 2d at 1276. Finally, in order to obtain monetary redress from any defendant, “the FTC must proffer evidence tending to show consumers actually relied on the entity’s deceptive acts or practices to their
detriment.” Freecom Commc’ns , 401 F.3d at 1203.
In the instant case, there is no genuine dis pute of fact regarding whether Michaels and Benhaim, who repeatedly identified themselves as president and vice president of each of the corporate entities and who controlled the ba nk accounts for the Canadian corporations, participated in the corporations’ deceptive acts . If status as a controlling shareholder of a closely-held corporation creates an inference that an individual had author ity to control corporate acts, see id. at 1205, then the president and vice president of these co rporate defendants certainly had such authority. Additionally, it is clear that Benhaim and Michaels knew or should have known of the corporate defendants’ misrepresentati ons. The record demonstrates that third party payment processors forwarded consumer and stat e attorneys general complaints to Benhaim at james@newlifeconsultants.net and jb@emaonline.ne t. Benhaim replied to a number of these emails, demonstrating his knowledge of consumers’ frustrations with his companies. AdditionalNo. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 29

evidence in the record, including the individual defendants’ involve ment in the leadership of these entities, establishes that Benhaim and Michaels had or should have had knowledge regarding the defendant corporati ons’ activities and had the author ity to control their deceptive acts. Finally, as explained above, consumers clearly relied on Defendants’ deceptive acts and communications—numerous consumers, who now face ba d credit and/or foreclosure due to their interactions with Defendants, paid thousan ds of dollars in reliance on Defendants’ misrepresentations. Therefore, the district co urt did not err in holding Benhaim and Michaels liable for the acts of the corporate defendants.

ii. Common Enterprise
Although the common enterprise theory of liabi lity had not been adopted by this Court prior to this case, numerous other courts have applied this principle to similar factual situations, and we agree with the district cour t that it should apply here as well. 15 Under this theory, “[i]f the structure, organization, and pa ttern of a business venture rev eal a ‘common enterprise’ or a ‘maze’ of integrated business entities, th e FTC Act disregards corporateness.” Wash. Data Res. , 856 F. Supp. 2d at 1271. Courts generally find that a common enterprise exists “if, for example, businesses (1) maintain officers and employees in common, (2) operate under common control, (3) share offices, (4) commingle funds, and (5) share advertising and marketing.” Id

. Under a somewhat similar theory, this Court in P.F. Collier & Son Corp. v. F.T.C. , 427 F.2d 261, 270 (6th Cir. 1970), considered a number of similar factors to find that a parent company “so dominated and controlled the acts of its . . . subsidiaries, that the corporate identities of the latter [could] be ignored, and the parent held vicariously li able for their acts.” The Court found that “many of the men who direct ed the policy and operati ons of [the parent company] also directed the policy and opera tions of its wholly-owned subsidiaries,” id . at 267– 68, and that the subsidiaries were created, disso lved, and replaced “often for purposes unessential and unrelated to the maintenance of corporate vitality,” id . at 268. Additionally, the Court observed that “corporate agents of the old and ne w subsidiaries were practically all the same

15 See , e.g. , F.T.C. v. Bay Area Bus. Council, Inc. , 423 F.3d 627, 635 (7th Cir. 2005); Zale Corp. & Corrigan-Republic, Inc. v. F.T.C. , 473 F.2d 1317, 1321–22 (5th Cir. 1973); Del. Watch Co. v. F.T.C. , 332 F.2d 745, 746 (2d Cir. 1964); F.T.C. v. J.K. Publ’ns, Inc. , 99 F. Supp. 2d 1176, 1201–02 (C.D. Cal. 2000); F.T.C. v. Wolf , 1997-1 Trade Cases P71, 713, 1996 WL 812940, *7–8 (S.D. Fla. Jan. 31, 1996).No. 13-4169 Fed. Trade Comm’n v. E.M.A. Nationwide, Inc., et al. Page 30

people, albeit, perhaps, with different ti tles and occupying different positions,” id . at 269, that “elements within the [defendant’s] corporate co mplex ha[d] never dealt with each other as independent commercial entities, and that they ha[d] interchanged busi ness functions as the
circumstances warranted in a manner which wa s wholly inconsistent with any purported corporate separation between the [companies],” id . at 270.
Although P.F. Collier & Son is not entirely on point, the f actors considered by that Court are instructive in this case, as are the factors generally considered under the common enterprise theory. The record could not be clearer that each of the corporate and individual defendants made up a messy maze of interrel ated business entities, meeting ea ch of these factors. Benhaim sent emails as president of E.M.A. concerni ng the administration of New Life and copied Michaels. The corporations had many overla pping employees and administrators, which is evidenced by declarations, corporate documen ts, and emails between Defendants, their employees, and their third party payment processors . The Canadian corpor ations paid wages to employees of the three American corporations, and funds were transferred frequently between the American and Canadian corporations’ ba nk accounts. The corporations shared phone numbers, and the same individuals purchased URLs and email accounts for the corporate entities. Finally, each American corporation wa s dissolved and replaced by another corporation
that followed almost identical business models and used similar written materials when interacting with clients.
The district court did not err in imposing joint and several liability because there was no genuine dispute of material fact regardi ng Defendants’ interrelated activities.

III.

CONCLUSION
For the foregoing reasons, this Court AFFIRMS the district court’s decisions denying Defendants’ motions for further discovery and a stay of proceedings and granting the FTC’s motion for summary judgment.