972 F. Supp. 2d 1307
S.D. Fla.2013Background
- On September 18, 2012, the Court entered a Temporary Restraining Order freezing all IAB Defendants’ assets.
- A temporary monitor was appointed and a preliminary-injunction hearing was held on October 4, 2012.
- The Court entered a Preliminary Injunction that continued the asset freeze and appointed a permanent Receiver.
- The Court found likelihood of success on the FTC’s claims that the IAB Defendants misrepresented health-insurance-like benefits and violated the TSR.
- The Receiver determined Corporate IAB operations could not be continued legally or profitably and shut them down; the Court affirmed this decision.
- The IAB Defendants’ motions to stay proceedings and to lift the asset freeze for living expenses were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Stay pending appeal of PI | IAB lacks four-factor support for delay. | Appeal issues warrant stay to avoid harm. | Stay denied; four-factor test applied; no likelihood of success on merits shown. |
| Unfreezing assets for living expenses | Assets should be available to cover basic needs. | Defendants need funds for living expenses; assets insufficient and unjustly frozen. | Asset freeze maintained; insufficient assets and ill-gotten gains exceeding freeze; living-expense request denied. |
Key Cases Cited
- FTC v. U.S. Oil & Gas Corp., 748 F.2d 1431 (11th Cir. 1984) (asset freezes authorized as an incident to injunctions)
- Hilton v. Braunskill, 481 U.S. 770 (U.S. 1987) (public-interest considerations in stay determinations)
- Bishop, 425 Fed.Appx. 798 (11th Cir. 2011) (ill-gotten gains method; need for reasonable approximation of freeze amount)
- ETS Payphones, Inc., 408 F.3d 727 (11th Cir. 2005) (slight standard for proving ill-gotten gains under asset-freeze framework)
- Wilshire Investment Management Corp., 531 F.3d 1339 (11th Cir. 2008) (restitution measured by ill-gotten gains; asset-freeze scope implications)