FTC v. Jonathan Eborn ( 2016 )

FILED
NOT FOR PUBLICATION
AUG 04 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
FEDERAL TRADE COMMISSION, No. 14-16485
Plaintiff - Appellee, D.C. No. 2:09-cv-01112-GMN-VCF
v.
MEMORANDUM*
INFUSION MEDIA, INC., et al.,
Defendants,
and
JONATHAN EBORN, individually and as
an officer of Infusion Media, Inc., Two
Warnings, LLC., Two Part Investments,
LLC., and West Coast Internet Media, Inc.,
Defendant - Appellant.
Appeal from the United States District Court
for the District of Nevada
Gloria M. Navarro, Chief District Judge, Presiding
Argued and Submitted July 21, 2016
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: GRABER and TALLMAN, Circuit Judges, and RAKOFF,** Senior
District Judge.
Defendant-appellant Jonathan Eborn appeals from the district court’s order
entering judgment against him in the amount of $26,971,926.50. On October 4,
2010, in resolution of litigation initiated by the Federal Trade Commission (the
“FTC”), a consent judgment was entered against Eborn and his co-defendants,
which included a suspended monetary judgment. On March 25, 2014, the FTC
filed a motion to reinstate the monetary judgment against Eborn in light of material
misrepresentations and omissions that it identified in the financial statements
Eborn submitted prior to the entry of the consent judgment. Eborn contends that
the factual findings in the district court’s order granting that motion were clearly
erroneous and that the order runs afoul of Rule 52(a)(1) of the Federal Rules of
Civil Procedure. We affirm.
1. Federal Rule of Civil Procedure 52(a)(1), which requires a district court
to “find the facts specially and state its conclusions of law separately” under
specified circumstances, does not apply because the FTC’s motion and the district
court’s resolution thereof was not “an action tried on the facts without a jury or
with an advisory jury.” Fed. R. Civ. P. 52(a)(1). To the contrary, the FTC’s motion
**
The Honorable Jed S. Rakoff, Senior District Judge for the U.S.
District Court for the Southern District of New York, sitting by designation.
2
was governed by Federal Rule of Civil Procedure 52(a)(3), which provides that
courts are “not required to state findings or conclusions when ruling on a motion
under Rule 12 or 56 or, unless these rules provide otherwise, on any other motion.”
Fed. R. Civ. P. 52(a)(3) (emphasis added); see Nuveen Mun. High Income
Opportunity Fund v. City of Alameda, 730 F.3d 1111, 1127 n.9 (9th Cir. 2013)
(noting that Rule 52(a)(1) governs bench trials and Rule 52(a)(3) governs
motions).
2. Although Rule 52(a)(1) is thus inapplicable, nonetheless, under the
consent judgment the monetary judgment could not be reinstated without the
district court’s finding that Eborn made material misstatements or omissions in his
financial statements. Here, the district court’s order is sufficiently clear, and the
record sufficiently detailed, to permit meaningful review in this case. See
GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1210 (9th Cir. 2000).
3. We review the district court’s factual findings for clear error. The clear
error standard “is significantly deferential, and we will accept the lower court’s
findings of fact unless we are left with the definite and firm conviction that a
mistake has been committed.” Allen v. Iranon, 283 F.3d 1070, 1076 (9th Cir.
2002). Here, there was ample evidence in the record to support the district court’s
factual determinations. Indeed, many of the underlying facts supporting the district
3
court’s ruling were undisputed — such as Eborn’s compensation from Augusta
Capital and Link Media, and his failure to accurately report his residence and
personal property — or not credibly disputed.1 Eborn’s misrepresentations and
omissions were material as a matter of law, both because the FTC’s agreement to
the consent judgment was expressly conditioned on the truthfulness of Eborn’s
financial statements and because the parties stipulated that those financial
statements provided the basis for the monetary judgment.
AFFIRMED.
1
Although Eborn did present some evidence to the district court that
contradicted some of the FTC’s allegations, he does not challenge the district
court’s failure to hold an evidentiary hearing to resolve the conflicting evidence
and questions of credibility.
4