Gloria M. Navarro, Chief Judge
I. BACKGROUND
A. Overview
The FTC brings this action pursuant to Section 5(a) of the FTC Act,
The FTC asserts that Defendants OMICS, iMedPub, and Conference Series (collectively "Corporate Defendants") have operated as a common enterprise in violating Section 5(a) and therefore are jointly and severally liable. (Id. ¶ 10). The FTC further asserts that Gedela has "formulated, directed, controlled, had the authority to control, or participated in the acts and practices of the Corporate Defendants that constitute the common enterprise." (Id. ). Based on these allegations, the FTC initiated this action against Defendants on August 25, 2016. On September 29, 2017, the Court granted the FTC's request for a preliminary injunction, requiring Defendants to preserve records, provide financial accounting to the FTC, and refrain from engaging in deceptive practices. (Prelim. Inj. Order, ECF No. 46 ). The parties now submit their respective motions for summary judgment on the FTC's unfair and deceptive practices claim.
B. Background on Academic Publishing
1) Traditional Model vs. Open Access
Academic or scholarly journals are peer-reviewed publications that focus on a
Under the traditional model, publishers charge libraries and individuals "user subscription fees" to gain access to the published material. (Id. ¶ 6). The articles remain accessible to the extent users remain subscribed to the journal. (See
2) Peer Review
"Peer-review" is the process of subjecting an author's scholarly work, research, or ideas to the scrutiny of qualified experts in the same field prior to publishing in a journal. (SJX18 Backus Decl. ¶ 12). When an author submits their work for publication, the journal makes an initial determination regarding whether to accept the article for peer review or reject it outright. (Id. ). If accepted, authors are expected to respond to peer reviewer commentary, implement recommendations, and, if necessary, justify the rejection of any proposed revisions. (See
3) Impact Factors
In the academic publishing industry, a journal's "impact factor" is often used as an objective measure of the prestige or relative importance of a journal in its field. (Id. ¶ 15). "Impact factor" typically measures the average number of scholarly citations that articles receive in a published journal. (See
4) Indexing
Aside from impact factors, "indexing" also serves as an indicator of a journal's reputation. (Id. ¶¶ 17-22). The United States National Library of Medicine ("NLM") produces and manages three freely accessible bibliographical resources: PubMed, Medline, and PubMed Central. (SJX11 Admissions Nos. 42, 43). Journals must apply for inclusion in Medline and
C. Gedela and the Corporate Defendants
1) Corporate Structure
Defendants OMICS, iMedPub, and Conference Series are corporate entities registered in the United States with a principle place of business located in Hyderabad, India. (SJX02 Answer ¶¶ 6-8); (Gedela Decl. ¶ 6).
Gedela is the sole owner and founding director of the three Corporate Defendants. (SJX02 Answer ¶ 9); (SJX03 OMICS Int. Resp. 2); (SJX04 iMedPub Int. Resp. 2); (SJX05 Conference Series Int. Resp. 2); (Defs.' MSJ 5:3-4, ECF No. 89 ). Gedela first began using the fictitious business name "OMICS Publishing Group" for his publishing and conference services in 2009. (SJX23 Gedela Dep. 23:1-18, 30:1-25); (Defs.' MSJ 5:3-11). Until at least 2015, Gedela held revenue from the Corporate Defendants in a Citibank account set up in Palo Alto for OMICS Publishing Group. (See SJX23 Gedela Dep. 27:1-30:25). As founding director, Gedela has authority and control over Defendants' conference and publishing practices. (SJX10 Admission Nos. 1-4, 20); (See FTC's MSJ 4:26-5:22). Furthermore, Gedela has signatory authority over OMICS and iMedPub's financial accounts. (SJX02 Answer ¶ 9); (SJX10 Admission No. 22 ). Gedela operates as the main contact for the Corporate Defendants' servicers, including their payment processor. (PX12 Att. P at 1007; Att. O at 997, 999; Att. D at 109).
2) Defendants' Peer Review Practices
Defendants advertise throughout their websites and email solicitations that they strictly adhere to standard peer-review practices. (See SJX11 Admission No. 60 ); (SJX12 Admission Nos. 61-64); (SJX13 at 6-14); (SJX 15 at 4-8, 11-14); (See SJX1 Solicitation Email at 8); (SJX26 Att. Q at 576, 585, 588, 630, 698); (See PX12 Att. L at 657). For example, in 2014, Defendants published web pages stating that OMICS had 25,000 experts serving as editorial
In contradiction to these assertions, however, the FTC submits evidence indicating that Defendants' peer review practices are a "sham." (FTC's MSJ 24:4-5). For example, in certain instances, consumers who submitted articles were approved for publication within just several days of submission. (SJX 26 Att. A at 20, 53, 69, 84, 86, 114). In others, consumers reported receiving no comments or proposed revisions from peer reviewers. (See
In 2012, John Bohannon-a scientist and writer for Science magazine-submitted two articles to Defendants' journals with intentionally "egregious" scientific flaws. (PX14 Bohannon Decl. ¶ 3).
In addition to consumer commentary, the FTC also submits statements from multiple of Defendants' journal editors. (FTC's MSJ 25:15-25). In these statements, the editors indicate that they never received any manuscripts to review. (PX01 Woods Decl. ¶¶ 3-4, 9); (PX03 Everett Decl. ¶¶ 3-4). Based on documents received through discovery, the FTC asserts that out of 69,000 published articles, only 49% indicate that some form of review was conducted. (See FTC's MSJ 26:8-14).
3) Defendants' Expert Reviewers
Defendants advertise that their publications are reviewed and edited by as many as 50,000 experts. (SJX26 Att. Q at 576, 586); (Gedela Decl. ¶¶ 14-15, Ex. 1 to Defs.' MSJ).
4) Defendants' Use of Impact Factors
Defendants advertise throughout their websites and solicitation emails that their publications have high "impact factors." (SJX26 Att. Q at 741-768); (PX12 Att. L 657, 691, 762, 766, 768-769, 881-935); (SJX15 Admissions Nos. 196, 197). These advertisements include express representations, such as "OMICS International journals are among the top high impact factor academic journals which are publishing scholarly articles constantly." (SJX26 Att. Q. 820). Defendants admit that their journals do not have Thomson Reuters impact factors. (SJX04 iMedPub Int. Resp. 8); (SJX07 OMICS Int. Resp. 15). Rather, Defendants' impact factors are self-calculated ratios based on the number of citations found through a Google Scholar search. (See PX12 Att. L at 770); (SJX14 Admission No. 103 ); (SJX26 Att. P at 467, 763).
Defendants' websites contain inconsistent descriptions of how their impact factors are calculated. In some places, the impact factors are described as based on Journal Citation Reports, which is consistent with the Thomson Reuters Impact Factor. (SJX15 Admissions 198-211). In other places, Defendants describe them as an "unofficial impact factor" based on Google Scholar Citations. (See, e.g. , SJX14 Admission No. 103 ); (Internet Archives at 93, ECF No. 84 ). Although Defendants provide their alternate definition in disclosures, such explanations often appear buried underneath their journal marketing. (See PX12 Att. L at 881-931); (SJX26 Att. P at 450-467). In some instances, Defendants' websites make the general claim that their journals have "high impact factors" without any qualification. (See PX12 Att. L at 657, 762); (SJX26 Att. Q at 820). Similarly, Defendants have sent solicitation emails referring to their journals' impact factors without qualification. (See SJX27 Email at 3).
5) Defendants' Indexing Representations
Defendants represent that their publications are indexed in reputable indexing services. (See PX12 Att. L at 643, 657, 694). For example, Defendants repeatedly indicate that their journals are indexed in Medline and PubMed Central. (PX10 Att. D at 16); (SJX26 Att. Q at 589, 820, 916, 923). At various points, Defendants have even utilized PubMed and Medline's logos on their websites. (Internet Archives at 8, 11, 14, 17, 20, 24).
Despite these representations, Defendants admit that none of their journals are indexed in PubMed Central or Medline. (See SJX07 Admission Nos. 13, 14); (SJX08 Admission Nos. 13, 14). Instead, Defendants claim that more than 900 well-respected scientists have recommended OMICS' journals to be published in PubMed central. (Gedela Decl. ¶ 17, Ex. 1 to Defs.' MSJ). Nonetheless, NLM has explicitly refused to index Defendants' publications due to questionable publishing practices and requested that Defendants cease indicating any affiliation. (SJX18 ¶¶ 32-36, Att. B at 25, Att. C at 28, Att. D at 31, Att. E at 33-34). Despite NLM's requests, Defendants have continued to indicate their journals' inclusion in Medline and PubMed Central. (See PX10 Att. D at 16); (SJX26 Att. Q at 589).
6) Defendants' Publishing Fees
Defendants frequently send out solicitation emails inviting individuals to submit articles to Defendants' online publications. (See PX04 Att. A at 6); (PX09 Att. A at 4);
Some consumers only learn of Defendants' fees after Defendants have accepted their articles for publication. (See, e.g. , PX04 ¶ 5); (SJX26 Att. A at 20, 26, 33, 45, 59). Furthermore, when consumers contest Defendants' publication fees and ask their articles to be withdrawn, Defendants have ignored the requests and continued demanding payment. (See, e.g. , PX04 ¶¶ 6-8); (PX06 ¶¶ 6, 8); (PX07 ¶¶ 5, 8). In some instances, Defendants only removed the articles after the threat of legal action. (See, e.g. , PX07 ¶¶ 9-10). In addition to economic harm, this conduct prevents authors from submitting their work to other journals. (See SJX18 Backus Decl. ¶ 11). The Court notes, however, that at least one consumer has found the publication fees to be clearly disclosed. (See Orser Decl. ¶ 14, Ex. B to Defs.' Resp., ECF No. 110-4 ).
7) Defendants' Conference Practices
In addition to online publishing, Defendants also organize conferences on various scientific topics. (See SJX16 Gedela Decl. ¶¶ 6, 8); (SJX26 Att. B at 170, 185, 188). Defendants note that they have received "appreciation and invitation letters for hosting [their] conferences in many major cities." (Defs.' MSJ 8:15-16); (Letters, Ex. 3 to Defs.' MTD, ECF No. 31 ). Many of these conferences occur in the United States. (SJX26 ¶¶ 10-14).
In order to attract consumers, Defendants advertise the attendance and participation of prominent academics and researchers. (See PX05 ¶¶ 3,5); (PX12 Att. U at 1045); (SJX26 Att. A at 22, 56, 170). The FTC has provided evidence, however, that Defendants advertise the attendance and participation of these individuals without their permission or actual affiliation. (See PX05 ¶¶ 3,5); (PX12 Att. U at 1045). In numerous instances, individuals have requested unsuccessfully to have their names removed from Defendants' conference advertising materials. (See, e.g. , PX03 ¶¶ 6-12); (SJX26 Att. N at 370). In some instances, Defendants did not remove an individuals' name until the threat of legal action. (See, e.g. , PX05 ¶ 7). According to the FTC's sampling of 100 conferences, approximately 60% advertised organizers or participants who had not agreed to serve in such capacity. (SJX25 McAlvanah Decl. ¶ 7).
II. LEGAL STANDARD
The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."
In determining summary judgment, a court applies a burden-shifting analysis. "When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc. ,
If the moving party satisfies its initial burden, the burden then shifts to the opposing party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp. ,
At summary judgment, a court's function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial. See Anderson ,
A. FTC's Motion to Strike Declaration
The FTC moves to strike the declaration of Defendants' Indian counsel, Kishore Vattikoti ("Vattikoti"), which is attached to Defendants' Motion for Summary Judgment. (FTC Mot. to Strike 1:22-24, ECF No. 96 ). In the declaration, Koshore Vattikoti makes numerous broad assertions regarding the validity of Defendants' conference and publishing practices. (Vattikoti Decl. ¶¶ 6-9, Ex. 3 to Defs.' MSJ, ECF No. 89-3 ). Additionally, Vattikoti testifies that "all consumer complaints [against Defendants] have been resolved." (Id. ¶ 10). Attached to the declaration is what appears to be a summary exhibit of consumer complaints. (Id. at Ex. C). The summary exhibit contains notations regarding the manner in which Defendants purportedly resolved the complaints. (Id. ).
The FTC asserts that this declaration violates Federal Rule of Civil Procedure ("FRCP") 56(c)(4) because it fails to include "specific facts" of which the declarant has personal knowledge. (FTC Mot. to Strike 2:7-9). Specifically, the FTC notes that Gedela has previously testified that Vattikoti's responsibilities are limited to helping Defendants with this specific action, and he is not involved in the business. (Id. 2:24-3:4). In response, Defendants claim that Vattikoti has sufficient personal knowledge as Defendants' legal counsel and through assisting in Defendants' prior transactional and marketing matters. (See Defs.' Resp. 2:25-3:15).
FRCP 56(c)(4) states that an affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated. Fed. R. Civ. P. 56(c)(4). Here, Defendants fail to articulate how Vattikoti's role as Defendants' legal counsel gives him personal knowledge of whether 74 specific consumer complaints have been resolved. Defendants also fail to identify the source of the notations on Vattikoti's summary exhibit, thus giving no basis to the evidence he is relying upon. The Court therefore strikes these portions as violating Rule 56.
B. Violations of Section 5 of the FTC Act
The FTC asserts that Defendants engaged in deceptive practices in violation of Section 5 by: (1) misrepresenting the nature of their academic journals; (2) misrepresenting their scientific conferences; and (3) failing to adequately disclose that consumers must pay publishing fees. (See FTC's MSJ 32:2-6). The Court addresses each contention below.
1) Deceptive Practices Legal Standard
Section 5 of the FTC Act prohibits "unfair or deceptive practices in or affecting commerce."
In considering whether a claim is deceptive, the Court must consider the "net impression" created by the representation, even when the solicitation contains some truthful disclosures. See Cyberspace ,
2) Misrepresentations Regarding Journal Publishing
The FTC moves for summary judgment on the basis that no genuine dispute exists as to Defendants' deceptive journal publishing practices. (FTC's MSJ 43:7-44:10). The Court agrees. In their websites and email solicitations, Defendants represent that their journals follow standard peer review processes in the academic journal industry. (See SJX11 Admission No. 60 ); (SJX12 Admission Nos. 61-64); (SJX13 at 6-14); (SJX 15 at 4-8, 11-14); (See SJX1 Solicitation Email at 8); (SJX26 Att. Q at 576, 585, 588, 630, 698); (See PX12 Att. L at 657). Under standard industry practice, however, the peer review process takes several weeks/months and involves multiple rounds of substantive feedback from experts in that field. (SJX18 Backus Decl. ¶¶ 14-15). In this case, the FTC has submitted uncontroverted evidence showing that Defendants' peer review practices often took a matter of days and contained no comments or substantive feedback. (See SJX 26 Att. A at 20, 53, 69, 84, 86, 114). Although Defendants challenge the length of time required for peer review, Defendants fail to provide any evidence to support such a short review time. Furthermore, the FTC has submitted uncontroverted statements from purported "editors" indicating that they never even received manuscripts to review or else even agreed to be listed as an editor. (See PX02 Grace Decl. ¶¶ 4-7); (PX08 Howland Decl. ¶ 7); (PX11 Rusu Decl. ¶ 11).
Defendants also expressly represent that their publications have high impact factors. (SJX26 Att. Q at 741-768); (PX12 Att. L 657, 691, 762, 766, 768-769, 881-935); (SJX15 Admissions Nos. 196,
Defendants further represent that their publications are included in reputable indexing services, such as Medline and PubMed Central. (See PX10 Att. D at 16); (SJX26 Att. Q at 589, 820, 916, 923). These representations are rendered false by Defendants' own admissions. (See SJX07 Admission Nos. 13, 14); (SJX08 Admission Nos. 13, 14). Moreover, NLM itself refuses to index Defendants' publications due to questionable publishing practices. (See SJX18 ¶¶ 32-36, Att. B at 25, Att. C at 28, Att. D at 31, Att. E at 33-34). Despite NLM's requests to disassociate with Defendants, Defendants continue to misrepresent their inclusion in Medline and PubMed Central. (See PX10 Att. D at 16); (SJX26 Att. Q at 589). The uncontroverted evidence in the record therefore demonstrates that Defendants have made numerous express and material misrepresentations regarding their journal publishing practices. As Defendants have failed to raise any genuine issues of material fact, the Court grants the FTC summary judgment on this count.
3) Misrepresentations Regarding Scientific Conferences
The FTC moves for summary judgment on the basis that no genuine dispute exists as to Defendants' deceptive conference practices. (FTC's MSJ 44:11-45:3). The FTC is correct. Here, the uncontroverted evidence produced by the FTC demonstrates that Defendants engaged in material misrepresentations regarding their conferences. Notably, the FTC has submitted evidence showing that Defendants advertise the attendance and participation of prominent academics and researchers without their permission or actual affiliation. (See PX05 ¶¶ 3,5; PX12 Att. U at 1045); (SJX26 Att. A at 22, 56, 170). In fact, based on a sampling of 100 conferences, approximately 60% advertised organizers or participants who had not agreed to serve in such capacity. (SJX25 McAlvanah Decl. ¶ 7). Had consumers known of Defendants' misrepresentations, it is likely they would not have agreed to attend, participate in, or be affiliated with Defendants' conferences. The fact that some cities may have sent Defendants generic appreciation or invitation letters does not negate Defendants' underlying deception. See Stefanchik ,
4) Misrepresentations Regarding Publishing Fees
The FTC moves for summary judgment on the basis that no genuine dispute exists as to Defendants' failure to adequately disclose publishing fees. (FTC's MSJ 45:4-46:4). The Court again agrees. As noted above, Defendants frequently
Defendants also solicit article submissions through their online portals. (See SJX15 at 25-26). In many instances, however, Defendants' article homepages do not contain clear references to fees. (See, e.g. , PX12 Att. L at 652-654, 734-738); (SJX26 Att. Q at 631-640). In other instances, Defendants' fee disclosures are contained on secondary webpages but are difficult to find and lack specificity. (PX12 Att. K at 375-381). While Defendants assert that fees are clearly disclosed on their general home page, multiple avenues exist to submit an article without navigating through this page. Additionally, Defendants have provided no evidence to support the assertion that reasonable consumers would check their home page for specific fee disclosures, rather than the actual article submission pages. Indeed, Defendants' Response to the FTC's Motion for Summary Judgment merely asserts broad conclusions based on inadmissible hyperlinks to Defendants' purported websites. (See Defs.' Resp. 32:1-33:17, ECF No. 110 ). Regardless, the fact that some consumers may have seen Defendants' fee information prior to submitting an article does not negate the overall deceptive nature of Defendants' fee disclosures. See SlimAmerica, Inc. ,
5) Defendants Engaged in a Common Enterprise
"[E]ntities constitute a common enterprise when they exhibit either vertical or horizontal commonality-qualities that may be demonstrated by a showing of strongly interdependent economic interests or the pooling of assets and revenues." F.T.C. v. Network Servs. Depot, Inc. ,
Here, the undisputed evidence demonstrates that no real distinction exists between the Corporate Defendants. Notably, each Corporate Defendant shares the same principal place of business in India and has at various points utilized common addresses in the United States. (See SJX02 Answer ¶¶ 6-8); (Gedela Decl. ¶ 6). Furthermore, Defendants do not dispute that Gedela is the sole owner and founding director of the three Corporate Defendants and has maintained control over
6) Gedela's Individual Liability for Injunctive and Monetary Relief
Personal liability for violations of the FTC Act fall into two categories: liability for injunctive relief and liability for monetary relief. Individuals are liable for injunctive relief if they directly participate in the deceptive acts or have the authority to control them. F.T.C. v. Publ'g Clearing House, Inc. ,
The undisputed evidence in this case clearly demonstrates that Gedela's participation and control over the Corporate Defendants meets the standard for full personal liability. As detailed above, Gedela is the founder, principal, and owner of the Corporate Defendants. He has signatory authority over the corporations' financial accounts and is the billing contact for Defendants' websites. (See SJX02 Answer ¶ 9); (SJX10 Admission No. 22 ). He is also the main contact for the Corporate Defendants' servicers, including their payment processor. (PX12 Att. P at 1007; Att. O at 997, 999; Att. D at 109). The OMICS website itself openly proclaims Gedela as the "CEO and Managing Director," and states that iMedPub LLC and Conference Series LLC are subsidiaries of OMICS International. (PX12 Att. L at 937; PX22 Att. C at 17). In aggregate, the evidence in the record conclusively establishes Gedela's knowledge, control, and participation in Defendants' deceptive acts. The Court therefore finds Gedela liable for monetary and injunctive relief.
C. Injunctive and Monetary Relief
The FTC requests both a permanent injunction against defendants and monetary equitable relief. (See FTC's MSJ 49:16-57:3). Under § 13(b) of the FTC Act, the FTC "may seek, and after proper proof, the court may issue, a permanent injunction."
1) Permanent Injunction
A permanent injunction is justified if there exists "some cognizable danger of recurrent violation,"
The Court finds that a permanent injunction against Defendants is appropriate under the circumstances to enjoin them from engaging in similar misleading and deceptive activities. Here, Defendants did not participate in an isolated, discrete incident of deceptive publishing, but rather sustained and continuous conduct over the course of years. An injunction is therefore necessary to prevent future misconduct and protect the public interest. Moreover, the FTC's requested conduct provisions bear a reasonable relationship to Defendants' unlawful practices in this case, and the monitoring provisions are necessary to ensure compliance. See FTC v. Colgate-Palmolive Co. ,
2) Monetary Relief
Section 13(b) permits a panoply of equitable remedies, including monetary equitable relief in the form of restitution and disgorgement, as well as miscellaneous reliefs such as asset freezing, accounting, and discovery to aid in providing redress to injured consumers. Pantron I Corp. ,
Irrespective of the measure used to calculate monetary equitable relief, courts apply a burden-shifting framework to determine the specific amount to award. Direct Mktg. Concepts ,
Second, once the FTC satisfies this burden, "the burden then shifts to the defendant to show that the FTC's figures overstate the amount of the defendant's unjust gains." Commerce Planet ,
Here, the FTC requests an amount of $ 50,130,811.00 in consumer loss between August 25, 2011, through July 31, 2017. (FTC's MSJ 56:26-27). The FTC reaches this amount by calculating Defendants' gross revenue during the at-issue period and subtracting the $ 609,289.13 that Defendants paid out in chargebacks and refunds. (SJX26 ¶¶ 21-25). The FTC's calculations are consistent with the consumer loss formula, and the Court finds this approximation reasonable.
In Response, Defendants argue that the FTC's figure is overstated because it: (1) "assumes that every single author/consumer was misled by Defendants' publishing process;" and (2) erroneously includes "repeat authors" who were "demonstrably unconfused." (Defs.' Resp. 40:1-27).
D. Remaining Affirmative Defenses
In their Answer, Defendants advanced twenty affirmative defenses to liability. (Answer, ECF No. 48 ). The Court has already stricken nine of these for lack of merit. (Order Adopting R&R, ECF No. 62 ). Additionally, the Court has already addressed Defendants' defense regarding public interest in the injunction section above. With respect to Defendants' third, fourth, fifth, sixth, eighth, and eleventh affirmative defenses, these assertions are mere denials of wrongful conduct and do not state a valid affirmative defense. With respect to Defendants' affirmative defense for "failure to state a claim," the Court denied this argument in its prior Order on Defendants' Motion to Dismiss. (Order, ECF No. 46 ). With respect to Defendants' statute of limitations, laches, first amendment, and due process defenses, these are legally erroneous. See F.T.C. v. Ivy Capital, Inc. , No. 2:11-CV-283 JCM GWF,
IV. CONCLUSION
IT IS HEREBY ORDERED that Defendants' Motion for Summary Judgment, (ECF No. 89 ), is DENIED.
IT IS FURTHER ORDERED that the FTC's Motion for Judicial Notice, (ECF No. 84 ), is GRANTED .
IT IS FURTHER ORDERED that the FTC's Motion to Strike, (ECF No. 96 ), is GRANTED in part and DENIED in part.
IT IS FURTHER ORDERED that the FTC's Motion for Summary Judgment, (ECF No. 86 ), is GRANTED pursuant to the following terms:
1) DEFINITIONS
For the purpose of this Order, the following definitions apply:
A. "Clear(ly) and conspicuous(ly) " means that a required disclosure is difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers, including in all of the following ways:
2. A visual disclosure, by its size, contrast, location, the length of time it appears, and other characteristics, must stand out from any accompanying text or other visual elements so that it is easily noticed, read, and understood.
3. An audible disclosure, including by telephone or streaming video, must be delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily hear and understand it.
4. In any communication using an interactive electronic medium, such as the Internet or software, the disclosure must be unavoidable.
5. The disclosure must use diction and syntax understandable to ordinary consumers and must appear in each language in which the representation that requires the disclosure appears.
6. The disclosure must comply with these requirements in each medium through which it is received, including all electronic devices and face-to-face communications.
7. The disclosure must not be contradicted or mitigated by, or inconsistent with, anything else in the communication.
B. "Conference Activities" means any activity related to promoting, marketing, advertising, registering, hosting, acquiring or providing venue space for, or soliciting, charging, or accepting fees for, any conference, symposium, forum, workshop, or other meeting of professionals for which consumers pay a fee (however such fee is denominated).
C. "Defendants " means the Individual Defendant and the Corporate Defendants, individually, collectively, or in any combination. "Corporate Defendants" means OMICS Group Inc., also doing business as OMICS Publishing Group, iMedPub LLC, and Conference Series LLC, and their successors and assigns and any other entity engaged in Publishing Activities or Conference Activities that is owned or controlled, in whole or in part, by any Defendant, including, but not limited to, OMICS International Pvt. Limited, Srinu Sci Technol Biosoft Pvt. Limited, OMICS Entertainment Pvt. Limited, iMed Publications Limited, Conference Series LLC Limited, Meetings International, Ltd., Allied Academics Limited, Euroscion Limited, Pulsus Group Limited. "Individual Defendant" means Srinubabu Gedela, and any other name by which he might be known, including but not limited to OMICS Publishing Group.
D. "Impact Factor " or "Impact Score " means, with respect to any journal or other publication, any measure (however denominated) reflecting the number or average number of citations (whether weighted or not) to articles published in that journal or publication during a certain period of time, including, but not limited to, the score assigned to a journal by Clarivate Analytics (or its successor) and published in Journal Citation Reports, a journal's Eigenfactor, or SCImago Journal Rank.
E. "Person " means a natural person, organization, or other legal entity, including a corporation, partnership, proprietorship, association, cooperative, or any other group or combination acting as an entity.
2) ORDER
PROHIBITED MISREPRESENTATIONS REGARDING PUBLISHING SERVICES
I. IT IS THEREFORE ORDERED that Defendants, Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with any Publishing Activities, are hereby permanently restrained and enjoined from:
A. misrepresenting or assisting others in misrepresenting, expressly or by implication:
1. the nature, credibility, legitimacy, or reputation of any journal or other publication;
2. that any journal or other publication follows or otherwise engages in peer-review or any other process by which work submitted to that journal or publication is reviewed;
3. that any Person is an editor of, a member of an editorial board for, or otherwise associated or affiliated with any journal or other publication;
4. that any Person is involved in the selection or review of any article, manuscript, or other work submitted for publishing in any journal or other publication;
5. the Impact Factor or Impact Score of any journal or other publication, or that any journal or other publication has a high Impact Factor or Impact Score;
6. the inclusion of any journal or other publication in any academic journal indexing service, including but not limited to PubMed, PubMed Central, or MEDLINE;
7. any costs or fees associated with publishing an article, manuscript, or other work;
8. any material restrictions, limitations, or conditions on publishing an article, manuscript, or other work; or
9. any other fact material to a consumer's decision to submit an article, manuscript, or other work for publishing in any journal or other publication;
B. making any representation, or assisting others in making any representation, expressly or by implication, that any journal or other publication is peer-reviewed unless any work submitted to that journal or publication is reviewed by peers who are subject matter experts, who are not journal employees, and who evaluate the quality and credibility of the work, and the representation is otherwise non-misleading;
C. making, or assisting others in making, expressly or by implication, any representation covered by this Section I, unless the representation is non-misleading and, at the time such representation is made, Defendants possess and rely upon competent and reliable evidence that is sufficient to substantiate that the representation is true.
II. IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with any Conference Activities, are hereby permanently restrained and enjoined from:
A. misrepresenting or assisting others in misrepresenting, expressly or by implication:
1. the nature, credibility, legitimacy, or reputation of any conference, symposium, forum, workshop, or other meeting of professionals;
2. that any Person will attend, participate in, or is otherwise associated or affiliated with any conference, symposium, forum, workshop, or other meeting of professionals;
3. the panels, forums, schedule, agenda, or other presentations of any conference, symposium, forum, workshop, or other meeting of professionals;
4. any costs or fees to register or attend any conference, symposium, forum, workshop, or other meeting of professionals;
5. any material restrictions, limitations, or conditions on registering or attending any conference, symposium, forum, workshop, or other meeting of professionals; or
6. any other fact material to a consumer's decision to register for or attend any conference, symposium, forum, workshop, or other meeting of professionals;
B. making, or assisting others in making, expressly or by implication, any representation covered by this Section II, unless the representation is non-misleading and, at the time such representation is made, Defendants possess and rely upon competent and reliable evidence that is sufficient to substantiate that the representation is true.
REQUIRED DISCLOSURES REGARDING PUBLISHING PRACTICES
III. IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, in connection with any Publishing Activities, whether acting directly or indirectly, are hereby permanently restrained and enjoined from soliciting from a consumer or publishing articles, manuscripts, or other works solicited from a consumer, without disclosing Clearly and Conspicuously:
A. all costs to the consumer associated with submission or publication of such work;
B. if Defendants will not have such work reviewed by peers who are subject matter experts, who are not journal employees, and who evaluate the quality and credibility of the work, a statement informing consumers of such fact; and
C. if Defendants will not allow consumers to withdraw such work from publication after it has been submitted or will require consumers to pay a fee (however such fee is denominated) to withdraw such work from publication, a statement informing consumers of such fact and any costs to withdraw.
REQUIRED DISCLOSURES REGARDING JOURNAL IMPACT FACTORS
IV. IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, in connection with any Publishing Activities, whether acting directly or indirectly, are hereby permanently restrained and enjoined from making any representation, expressly or by implication, regarding the Impact Factor or Impact Score of any journal or publication, unless the representation is (a) non-misleading and (b) Clearly and Conspicuously discloses (1) whether the Impact Factor or Impact Score is calculated by Clarivate Analytics (or its successor) and (2) if the Impact Factor or Impact Score is not calculated by Clarivate Analytics (or its successor), who calculated that Impact Factor or Impact Score and how that Impact Factor or Impact Score is or was calculated.
CONSENT REQUIREMENT FOR CLAIMS ABOUT THIRD PARTIES
V. IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are hereby permanently restrained and enjoined from:
A. in connection with any Publishing Activities, making any representation, expressly or by implication, that any Person is an editor or is otherwise associated with the publishing good or service without (1) having obtained that Person's express written consent to such representation, and (2) providing a copy of such express written consent to the FTC at the address provided in Section X.E below; and
B. in connection with any Conference Activities, making any representation, expressly or by implication, that any Person is an organizer of, participant in, or is otherwise associated with, a conference hosted or otherwise associated with Defendants without (1) having obtained that Person's express written consent to such representation, and (2) providing a copy of such express written consent to the FTC at the address provided in Section X.E below.
PROHIBITION AGAINST UNSUBSTANTIATED CLAIMS
VI. IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, and attorneys, and all other
3) CUSTOMER INFORMATION
VII. IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, are permanently restrained and enjoined from directly or indirectly:
A. failing to provide sufficient customer information to enable the FTC to efficiently administer consumer redress. If a representative of the FTC requestsin writing any information related to redress, Defendants must provide it, in the form prescribed by the FTC, within 14 days;
B. disclosing, using, or benefitting from customer information, including the name, address, telephone number, email address, social security number, other identifying information, or any data that enables access to a customer's account (including a credit card, bank account, or other financial account), that any Defendant obtained prior to entry of this Order in connection with the marketing publication services and conferences; and
C. failing to destroy such customer information in all forms in their possession, custody, or control within 30 days after receipt of written direction to do so from a representative of the FTC.
D. Provided, however, that customer information need not be disposed of, and may be disclosed, to the extent requested by a government agency or required by law, regulation, or court order.
4) MONETARY JUDGMENT
VIII. IT IS FURTHER ORDERED that:
A. Judgment in the amount of FIFTY MILLION, ONE HUNDRED THIRTY THOUSAND, EIGHT HUNDRED AND TEN DOLLARS ($ 50,130,810) is entered in favor of the FTC against Defendants, jointly and severally, with post-judgment interest at the legal rate, as equitable monetary relief.
B. The monetary judgment set forth in this Section VIII is enforceable against any asset, real or personal, whether located within the United States or outside the United States, owned jointly or singly by, on behalf of, for the benefit of, in trust by or for, or as a deposit for future goods or services to be provided to, any Defendant, whether held as tenants in common, joint tenants with or without the right of survivorship, tenants by the entirety, and/or community property.
C. In partial satisfaction of the judgment against Defendants in Section VIII.A, any Defendant and any financial or brokerage institution, escrow agent, title company, commodity trading company, business entity, or person, whether located within the United States or outside the United States, that holds, controls, or maintains accounts or assets of, on behalf of, for the benefit of, or as a deposit for future goods or services to be provided to, any Defendant, whether real or personal, whether located within the United States or outside the United States, shall turn over such account or asset to the FTC or its designated agent within ten (10) business days of receipt of notice of this Order by any means.
D. Defendants relinquish dominion and all legal and equitable right, title, and interest in all assets transferred pursuant to this Order and may not seek the return of any assets.
E. All money paid to the FTC pursuant to this Order may be deposited into a fund administered by the FTC or its designee to be used for equitable relief, including consumer redress and any attendant expenses for the administration of any redress fund. If a representative of the FTC decides that direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, the FTC may apply any remaining money for such other equitable relief (including consumer information remedies) as it determines to be reasonably related to Defendants' practices alleged in the Complaint. Any money not used for such equitable relief is to be deposited to the U.S. Treasury asdisgorgement. Defendants have no right to challenge any actions the FTC or its representatives may take pursuant to this Subsection.
5) ORDER ACKNOWLEDGMENTS
IX. IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this Order:
A. Each Defendant, within 7 days of entry of this Order, must submit to the FTC an acknowledgment of receipt of this Order sworn under penalty of perjury.
B. For 5 years after entry of this Order, the Individual Defendant for any business that such Defendant, individually or collectively with any other Defendants, is the majority owner or controls directly or indirectly, and each Corporate Defendant, must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all employees having managerial responsibilities for conduct related to the subject matter of the Order; and (3) any business entity resulting from any change in structure as set forth in the Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order for current personnel. For all others, delivery must occur before they assume their responsibilities.
C. From each individual or entity to which a Defendant delivered a copy of this Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of receipt of this Order.
6) COMPLIANCE REPORTING
X. IT IS FURTHER ORDERED that Defendants make timely submissions to the FTC:
A. One year after entry of this Order, each Defendant must submit a compliance report, sworn under penalty of perjury:
1. Each Defendant must: (a) identify the primary physical, postal, and email address and telephone number, as designated points of contact, which representatives of the FTC may use to communicate with Defendant; (b) identify all of that Defendant's businesses by all of their names, telephone numbers, and physical, postal, email, and Internet addresses; (c) describe the activities of each business, including the goods and services offered, the means of advertising, marketing, and sales, and the involvement of any other Defendant (which the Individual Defendants must describe if he knows or should know due to his own involvement); (d) describe in detail whether and how that Defendant is in compliance with each Section of this Order; and (e) provide a copy of each Order Acknowledgment obtained pursuant to this Order, unless previously submitted to the FTC.
2. Additionally, the Individual Defendant must: (a) identify all telephone numbers and all physical, postal, email and Internet addresses, including all residences; (b) identify all business activities, including any business for which such Defendant performs services whether as an employee or otherwise and any entity in which such Defendant has any ownership interest; and (c) describe in detail such Defendant's involvement in each such business, including title, role, responsibilities, participation, authority, control, and any ownership.
B. For 20 years after entry of this Order, each Defendant must submit a compliance notice, sworn under penalty of perjury, within 14 days of any change in the following:
1. Each Defendant must report any change in: (a) any designated point of contact; or (b) the structure of any Corporate Defendant or any entity that Defendant has any ownership interest in or controls directly or indirectly that may affect compliance obligations arising under this Order, including: creation, merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order.
2. Additionally, the Individual Defendant must report any change in: (a) name, including aliases or fictitious name, or residence address; or (b) title or role in any business activity, including any business for which such Defendant performs services whether as an employee or otherwise and any entity in which such Defendant has any ownership interest, and identify the name, physical address, and any Internet address of the business or entity.
C. Each Defendant must submit to the FTC notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant within 14 days of its filing.
D. Any submission to the FTC required by this Order to be sworn under penalty of perjury must be true and accurate and comply with28 U.S.C. § 1746 , such as by concluding: "I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: ______" and supplying the date, signatory's full name, title (if applicable), and signature.
E. Unless otherwise directed by a FTC representative in writing, all submissions to the FTC pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: FTC v. OMICS Group, X160049.
7) RECORDKEEPING
XI. IT IS FURTHER ORDERED that Defendants must create certain records for 20 years after entry of the Order, and retain each such record for 5 years. Specifically, each Corporate Defendant and the Individual Defendant for any business that such Defendant, individually or collectively with any other Defendants, is a majority owner or controls directly or indirectly, must create and retain the following records:
A. accounting records showing the revenues from all Publishing Activities and Conference Activities sold;
B. personnel records showing, for each Person providing services, whether as an employee or otherwise, that Person's: name; addresses; telephone numbers; job title or position; dates of service; and (if applicable) the reason for termination;
C. records of all consumer complaints and refund requests, whether received directly or indirectly, such as through a third party, and any response;
D. all records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the FTC; and
E. a copy of each unique advertisement or other marketing material.
8) COMPLIANCE MONITORING
XII. IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants' compliance with this Order and any failure
A. Within 14 days of receipt of a written request from a representative of the FTC, each Defendant must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury; appear for depositions; and produce documents for inspection and copying. The FTC is also authorized to obtain discovery, without further leave of court, using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.
B. For matters concerning this Order, the FTC is authorized to communicate directly with each Defendant. Defendants must permit representatives of the FTC to interview any employee or other Person affiliated with any Defendant who has agreed to such an interview. The Person interviewed may have counsel present.
C. The FTC may use all other lawful means, including posing, through its representatives as consumers, suppliers, or other individuals or entities, to Defendants or any individual or entity affiliated with Defendants, without the necessity of identification or prior notice. Nothing in this Order limits the FTC's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act,15 U.S.C. §§ 49 , 57b-1.
D. Upon written request from a representative of the FTC, any consumer reporting agency must furnish consumer reports concerning the Individual Defendant, pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(1).
9) RETENTION OF JURISDICTION
XIII. IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order.
The Clerk of Court shall enter judgment accordingly and close the case.
Notes
The FTC additionally filed a Motion to Strike portions of the Declaration of Kishore Vattikoti submitted in support of Defendants' Motion for Summary Judgment. (ECF No. 96 ). The Court addresses this Motion in the Discussion section below.
Defendants oppose the facts incorporated in this order predominantly through arguments of counsel. "[A]rguments of counsel are not evidence and do not create issues of material fact capable of defeating an otherwise valid motion for summary judgment." Barcamerica Int'l USA Trust v. Tyfield Importers, Inc. ,
The exhibits titled "SJX" can be found attached to the FTC's Motion for Summary Judgment, (ECF No. 86 ). The exhibits titled "PX" can be found attached to the FTC's Motion for Preliminary Injunction, (ECF No. 9 ). For the remainder of this Order, the Court will refer to these exhibits only by their respective "SJX" and "PX" numbers.
Thomson Reuters has been succeeded by Clarivate Analytics. (SJX11 Request for Admissions No. 35 )
Gedela filed dissolution papers in each of these entities in June/July of 2017. (SJX 17 Dissolution Papers Att. B). To the extent these entities are dissolved, the Court will continue to refer to them in present tense in the interest of clarity. Defendants do not argue that dissolution bars liability nor does the Court find any basis to so conclude. See N.R.S. § 78.585 ; Del. Code tit. 6 § 18-804.
The FTC moves for judicial notice of archived web pages pursuant to Federal Rule of Evidence 201. (Mot. for Judicial Notice, ECF No. 84 ). Defendants did not file an objection. Accordingly, the FTC's request for judicial notice is granted. See Local Rule 7-2; Pond Guy, Inc. v. Aquascape Designs, Inc. , No. 13-13229,
PX14 can be found attached to the FTC's Reply to their Motion for Preliminary Injunction, (ECF No. 12 ).
This number has increased each year, beginning with an advertised 20,000 expert editors in 2012. (SJX15 Admission No. 180 ).
The Court notes that even to the extent Defendants had demonstrated personal knowledge, whether consumer complaints have at some point been resolved is immaterial to the underlying action.
Defendants also cite a table purporting to show Defendants' taxable income based on net profits in the United States. Even to the extent this table were representative of Defendants' income after tax, profits are irrelevant to the present inquiry. See Stefanchik ,