Opinion
Case No. CV 20-6692-JFW(PDx)
2021-10-19
UNITED STATES of America v. MYLIFE.COM, INC., et al.
Lisa K. Hsiao, Claude Fenton Scott, Jr., Zachary Lee Cowan, Zachary Alan Dietert, Rachel Baron, Patrick Raymond Runkle, US Department of Justice, Washington, DC, for United States of America. Jeffrey E. Tsai, Andrew B. Serwin, Hector Emilio Corea, Mandy Chan, Tamany Vinson Bentz, DLA Piper LLP, Los Angeles, CA, for MyLife.com, Inc. Richard J. Frey, Epstein Becker and Green PC, Mandy Chan, Tamany Vinson Bentz, Jeffrey E. Tsai, Hector Emilio Corea, DLA Piper LLP, Los Angeles, CA, Edward J. Loya, Jr., Epstein Becker and Green PC, Dallas, TX, for Jeffrey Tinsley.
Lisa K. Hsiao, Claude Fenton Scott, Jr., Zachary Lee Cowan, Zachary Alan Dietert, Rachel Baron, Patrick Raymond Runkle, US Department of Justice, Washington, DC, for United States of America.
Jeffrey E. Tsai, Andrew B. Serwin, Hector Emilio Corea, Mandy Chan, Tamany Vinson Bentz, DLA Piper LLP, Los Angeles, CA, for MyLife.com, Inc.
Richard J. Frey, Epstein Becker and Green PC, Mandy Chan, Tamany Vinson Bentz, Jeffrey E. Tsai, Hector Emilio Corea, DLA Piper LLP, Los Angeles, CA, Edward J. Loya, Jr., Epstein Becker and Green PC, Dallas, TX, for Jeffrey Tinsley.
PROCEEDINGS (IN CHAMBERS): ORDER GRANTING IN PART, DENYING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [filed 8/23/2021; Docket No. 77];
ORDER GRANTING IN PART, DENYING IN PART DEFENDANTS MYLIFE.COM, INC. AND JEFFREY TINSLEY'S MOTION FOR PARTIAL SUMMARY JUDGMENT [filed 8/23/2021; Docket No. 76];
JOHN F. WALTER, UNITED STATES DISTRICT JUDGE
On August 23, 2021, Plaintiff United States of America ("Plaintiff" or the "Government") filed a Motion for Summary Judgment. On August 30, 2021, Defendants MyLife.Com, Inc. ("MyLife") and Jeffrey Tinsley ("Tinsley") (collectively, "Defendants") filed their Opposition. On September 3, 2021, the Government filed a Reply. On August 23, 2021, Defendants filed a Motion for Partial Summary Judgment. On August 30, 2021, the Government filed its Opposition. On September 3, 2021, Defendants filed a Reply.
Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court found these matters appropriate for submission on the papers without oral argument. The matters were, therefore, removed from the Court's September 20, 2021 hearing calendar and the parties were given advance notice. After considering the moving, opposing, and reply papers, and the arguments therein, the Court rules as follows:
I. FACTUAL AND PROCEDURAL BACKGROUND
To the extent any of these facts are disputed, they are not material to the disposition of this motion. In addition, to the extent that the Court has relied on evidence to which the parties have objected, the Court has considered and overruled those objections. (Several of these objections are discussed in more detail infra. ) As to the remaining objections, the Court finds that it is unnecessary to rule on those objections because the disputed evidence was not relied on by the Court.
The Court also notes that many of Defendants’ evidentiary objections or so-called "disputes" in the Combined Statement of Facts are frivolous and not made in good faith. For example, in the Government's Combined Statement of Facts (Docket No. 159) at ¶ 1, Defendants dispute the following fact on the grounds that the Complaint is not evidence: "Defendant MyLife.com, Inc. (‘MyLife’) is a privately held Delaware corporation with its principal place of business at 1100 Glendon Ave, Suite 720, Los Angeles, California 90024." Defendants ignore, however, that they admitted this fact in their Answer at ¶ 5, and that they present an almost identical fact in support of their Motion for Partial Summary Judgment. See Defendants Combined Statement of Facts (Docket No. 156) at ¶ 3 ("MyLife.com, Inc. is a privately held Delaware corporation with its principal place of business in Los Angeles, California."). These types of frivolous objections and disputes waste the Court's limited resources and will not be tolerated in the future. In any event, the Court has considered the material facts as presented and adequately supported by the moving party as undisputed, except to the extent that the fact was "(a) included in the ‘Statement of Genuine Disputes’ and (b) controverted by declaration or other written evidence filed in opposition to the motion." See Local Rule 56-3 (emphasis added).
MyLife is a company based in Los Angeles that offers and sells consumer background information about millions of Americans over the internet. Government's Combined Statement of Facts (Docket No. 159) ("Gov. CSF") ¶ 1. As described by MyLife, it provides a comprehensive people-search service that "helps people understand and manage what information is available about them in the public domain" and "helps people in the United States learn more about other individuals based on information in the public domain." Defendants’ Combined Statement of Facts (Docket No. 156) ("Def. CSF") ¶¶ 5-6. Defendant Jeffrey Tinsley is the founder, CEO, Chairman, and a director of MyLife, and has held these positions since MyLife's inception.
A. MyLife's Services and Marketing Practices
Since approximately 2009, MyLife has purchased public record data about individuals from data brokers. Gov. CSF ¶¶ 5; Def. CSF ¶¶ 9, 11. MyLife uses that data to create a "public listing" or profile for these individuals, which can be accessed through its website, www.mylife.com. Def. CSF ¶ 14. On its website, MyLife has profiles purporting to cover at least 320 million individuals. Gov. CSF ¶ 7. Information that may be available through a free search may include: name; city and state of residence; partially redacted phone numbers, email address, and mailing address associated with the profile; date of birth; photos; income; religion; ethnicity; net worth; the possible availability of court or criminal records; and potential bankruptcies liens, and legal judgments. Gov. CSF ¶ 8. MyLife also sells paid subscriptions that allow subscribers to access even more detailed profiles and background data about themselves and other individuals. MyLife claims that these paid subscriptions allow subscribers to edit or remove data from their MyLife profile or even from the "original source." Gov. CSF ¶¶ 5, 9, 11.
MyLife uses "flags" that it obtains from a data provider and displays information from those "flags" on the profiles on their website. Gov. CSF ¶ 12. Most notably, such "flags" include criminal, arrest, and court records, which are displayed as prominent red banners on over 60 million individuals’ profiles, declaring that the individual "DOES" have "arrest or criminal records" or "court, arrest, or criminal records." Gov. CSF ¶ 13. The flags may not be accurate or may not be accurately matched to the profiles on the MyLife website and could refer to anything from a traffic ticket or other minor infraction to a murder conviction. Gov. CSF ¶¶ 14-15. With respect to the individuals without a criminal, arrest, or court record flag, MyLife includes statements on those individuals’ profiles that the individual "may have Arrest or Criminal Records" even though MyLife does not believe that to be the case. Gov. CSF ¶ 20.
MyLife also assigns a "Reputation Score" to each individual and displays that score on the public profiles for those individuals. The Reputation Score (a number between 0 and 5) is generated by MyLife's proprietary algorithmic calculation based on the data it receives from data brokers, as well as based on ratings and reviews from others. Def. CSF ¶ 12; Gov. CSF ¶ 25. With the exception of profiles where a premium background report has been purchased by a subscriber, MyLife's algorithm significantly reduces a person's Reputation Score based on the number of data flags MyLife receives from its data providers. Gov. CSF ¶ 28. As described above, however, those flags do not distinguish between infractions (such as traffic tickets) and serious crimes (such as assault). Gov. CSF ¶ 29.
The supposedly negative information about individuals available on MyLife's website alarms many people and induces them to subscribe to MyLife's services. Gov. CSF ¶ 21. Indeed, Defendant Tinsley thought it was "f------ amazing" that so many "flags" came back from the company's data provider during a data dump in 2017, because this negative information about consumers provided "so much opportunity" for the company. Gov. CSF ¶¶ 22, 23. Many consumers encounter MyLife for the first time by seeing and becoming upset by their personal information displayed in search engine results and on MyLife.com.
In its marketing materials, MyLife represents that it "scan[s] the internet for you," that "you'll see all the private information about you that's exposed and sold across the web, and all the places it's available", and that MyLife will "even give you the ability to delete with a single click anything you don't want exposed." Gov. CSF ¶ 31; Dietert Decl., Ex. 13, p. 2. Similarly, MyLife represents in phone calls with customers that customers will be able to remove personal information about themselves "from the original source." Gov. CSF ¶ 31; Dietert Decl., Ex. 25 , p.3. Although MyLife has a service that assists users with removing information from certain third-party websites (i.e., the service sends a request to the third-party website on the user's behalf), MyLife cannot remove information about users from the public record and admits that it "does not have the ability to force third party websites to remove certain information and cannot ultimately control what information such third party websites will actually remove in response to MyLife's efforts to have such information removed." Def. CSF ¶ 18, Gov. CSF ¶ 32; Iglesias Decl. ¶ 6, Ex. 296, p. 4, 8.
B. MyLife's Negative-Option Marketing
Over 99 percent of MyLife's sales result from online sales, i.e., people find MyLife's website on the internet, and make their purchases there. Gov. CSF ¶ 33.
MyLife at various times has sold subscriptions of varying durations, including, for example, a seven-day trial, or a one-month, three-month, six-month, or one-year subscription. Gov. CSF ¶ 10. A significant portion of these subscriptions include an "auto-renewal" or "AR" "feature." Gov. CSF ¶ 34. When the trial or subscription a consumer purchased ends, the AR feature automatically renews the subscription (or "rolls over" the trial into a full subscription) and re-charges the consumer's credit card -- and will continue to do so indefinitely -- unless and until the consumer cancels. Gov. CSF ¶ 35. The AR feature has generated very significant revenue for MyLife. Gov. CSF ¶ 36. At least in the 2016 time frame, MyLife's call center's "primary intention" when receiving a customer-service call was to keep "AR on." Gov. CSF ¶ 36.
Individuals purchasing a subscription in certain states (e.g., California, Washington, and Connecticut) have the option of checking a box that states "I agree to Automatic Renewal". If the user does not check that box and opt-in to automatic renewal, the user may purchase a single term subscription. For users residing outside these states, MyLife memberships generally renew automatically. Iglesias Decl. ¶ 6a, Ex. 2, pp. 11-12.
Until 2018 for California residents, and until 2019 for the rest of the country, when a MyLife subscriber wanted to cancel the service, MyLife primarily offered one method of cancellation: the telephone. Gov. CSF ¶ 37. Indeed, at least at certain times, it appears that the "cancellation page," the "purchase page," and the FAQ page on MyLife's website only advised customers to call Customer Care by phone if they wished to cancel their subscription or cancel AR. Kinsley Dep. 158:10-24, July 8, 2021; Dietert Decl., Ex. 9-10; Iglesias Decl. ¶ 6a, Ex. 2, pp. 12-13; Karmand Opp. Decl. ¶ 21, Ex. 155. Desiree Kinsley (a MyLife Customer Care Business Analyst) testified that MyLife has also always offered e-mail as "a line of support" to its customers, see Kinsley Dep. 157:22-158:1, and that customers were able to cancel a subscription by emailing membersupport@mylife.com or by sending a letter to MyLife's postal address available on its website. Gov. CSF ¶ 84, Kinsley Decl. ¶¶ 4-6. However, email requests for cancellation often received an automated response directing the individual to contact Customer Care by phone. Kinsley Decl. ¶ 6 (stating that if a customer requested a refund by email in addition to cancellation in the pre-2020 time period, the customer was generally directed to contact Customer Care by phone); Dietert Decl., Ex. 109 (Feb 28, 2020 email from John McNabb, Director of Customer Care, stating that, "for retention emails we ask customers to call in to cancel a subscription"); Iglesias Decl. ¶ 6a, Ex. 2, pp. 12-13 (MyLife's formal response to the FTC, stating that individuals who communicated with MyLife via email would receive an automated response directing them to call Customer Care); Dietert Decl., Ex. 34 (a sample automated reply to a cancellation request in 2015). Notably, even when customers attempted to contact MyLife by telephone, customers frequently did not reach or speak to an agent. Although the average "abandonment" rate during the relevant time period was only 7.1%, it reached as high as 29.0% in March 2017 (and even exceeded 50% in January 2019). McNabb Decl. (Docket No. 147) ¶¶ 6, 10.
The "abandonment" rate refers to the percentage of callers that hang up before reaching a call agent.
More importantly, when customers seeking to cancel their subscription finally did reach an agent, they were faced with a six-part "retention" sales script aimed at convincing the customers not to cancel. Gov. CSF ¶ 41. During these calls, MyLife agents were instructed to inform customers seeking a refund that MyLife's terms and conditions provided that the subscriptions were non-refundable. Gov. CSF ¶ 42. MyLife agents were also instructed to "always assume that the caller wants the AR to remain on" and to "not question the caller about the status of the AR" and to "not ask if they want AR disabled." Gov. CSF ¶ 42; Dietert Decl., Ex. 37 ; Dietert Decl., Ex. 45 . Tinsley was aware of and approved of MyLife's practice of not mentioning a customer's auto-renewal status. Gov. CSF ¶ 43; Dietert Decl., Ex. 83.
Between January 2016 and April 2018, MyLife sold or renewed at least 1,378,370 negative-option trials or subscriptions, and generated $15,871,682 in net revenue (revenue minus refunds and chargebacks) from negative-option sales during that time period. Gov. CSF ¶¶ 46-48.
Not until May 2018 did MyLife begin offering some consumers the opportunity to cancel the auto-renewal feature of their subscriptions online. Gov. CSF ¶ 49.
C. Defendants’ Telephone Sales Tactics
1. Retention Calls
As discussed supra , when MyLife subscribers call to cancel an existing subscription or request a refund, MyLife subjects the subscriber to a 6-part "retention" sales pitch aimed at convincing consumers not to cancel. MyLife refers to these calls internally as "retention calls." On these retention calls, agents attempt to retain customers by explaining the features and benefits of their membership, by offering an extra service as a "free" gift, and/or by adjusting the term of the subscription or monthly billing amount. Gov. CSF ¶¶ 41, 57; Def. CSF ¶¶ 34, 39, 43.
If the customer accepts the "free" gift, AR must remain active on the account for future renewals; if the customer cancels AR, the gift will "expire" from the customer's membership. See, e.g. , Dietert Decl., Ex. 242, p. 4.
During these retention calls, MyLife agents are instructed to inform customers seeking a refund that MyLife's terms and conditions state that "our subscriptions are non-refundable." Gov. CSF ¶ 42; see, e.g. , Dietert Decl., Ex. 38 . However, despite this representation and MyLife's terms and conditions, MyLife does give full refunds to customers who are "irate, adamant" or who use so-called "Magic Words," such as "FTC," "Attorney General," "BBB," "lawsuit," and others. Gov. CSF ¶¶ 61-62. MyLife provides these refunds because, if they failed to do so, consumers would (among other things) pursue more chargebacks. Gov. CSF ¶ 63. Indeed, credit-card companies have threatened to suspend MyLife's ability to process credit card payments due to the company's high chargeback rates. Gov. CSF ¶ 63.
MyLife has received approximately 2,070,272 retention calls since January 2015. Gov. CSF ¶ 58. Although MyLife attempts to retain these customers, the vast majority (98%) of these customers cancel their accounts. Def. CSF ¶ 36; McNabb Decl. (Docket No. 147) ¶ 9. However, these calls are still lucrative for MyLife, who tracks the success of these calls by the amount of refunds it "saved." Gov. CSF ¶ 60. Since January 2015, MyLife saved $27,987,208 in refunds on retention calls, with $23,589,762 of that money coming from November 2016 to September 2020, and $5,515,762 of that money coming from November 2016 to April 2018. Gov. CSF ¶ 64.
2. Removal Calls
MyLife also receives calls from consumers who wish to remove their public profile or information from MyLife's website. Gov. CSF ¶ 65. MyLife refers to these calls as "removal" calls. MyLife converts these removal calls into sales calls by pitching MyLife's services, and "aims to turn these 2,000 weekly calls into a profit center for the business." Gov. CSF ¶ 65; see, e.g. , Dietert Decl., Ex. 25, p.5.
The "removal request" sales scripts do not advise agents to disclose MyLife's stated policy of not providing refunds, nor do the scripts encourage agents to volunteer the automatically-renewing nature of the products, unless the caller asks about it. Gov. CSF ¶ 67. In addition, prior to January 2020, removal callers were told, incorrectly, that MyLife does not remove public-profile pages from its website, when in fact it removes hundreds of thousands of profiles per year. Government CSF ¶ 68. Tinsley, at least in 2019, participated in drafting MyLife's removal scripts which directed agents to erroneously inform consumers that public-profile pages from its website cannot be removed. Gov. CSF ¶ 68; Dietert Decl., Ex. 60.
Between January 2019 and December 2019, MyLife received at least 63,285 removal calls.
3. Outbound Calls
In 2016, MyLife's call centers also placed at least 282 outbound telemarketing calls to individuals who had "abandoned" the checkout page on the MyLife website, and at least 73 of these calls reached live consumers who were pitched MyLife services. Gov. CSF ¶ 70. The scripts of these calls did not advise agents to disclose the AR feature of the subscriptions. Gov. CSF ¶ 71. The sales scripts also instructed agents to ask consumers to try MyLife "for just one month," but instructed the agents to set those subscriptions to auto-renew unless the consumer expressly asked for no future billing. Gov. CSF ¶ 71. Tinsley approved and participated in the execution of outbound telemarketing campaigns, including revising and approving scripts containing misrepresentations. Def. CSF ¶ 87; Dietert Decl., Exs. 254, 263, 285,
D. MyLife's Activities Related to the Fair Credit Reporting Act
MyLife markets its products to consumers interested in protecting their online public image. To entice consumers to sign up for a subscription, MyLife claims that the information on its site could affect "your job opportunities, who'll date you, rent to you, interest rates, & more" and advises consumers that, by signing up, they can "improve and monitor" their reputation, and see "the employers, friends, love interests & clients who are looking for you." Dietert Decl., Ex. 15, p. 2.
However, MyLife's User Agreement purports to prohibit the use of information from MyLife's website for "determining eligibility for credit, insurance, [or] employment." McNabb Decl. ¶ 11. According to MyLife, it does not directly market or promote its products to landlords, employers or others who might use MyLife profiles for FCRA-related purposes. Id. In addition, MyLife uses a "checkbox" for consumers during the purchase process, which requires the consumers to affirm that they "will not use this service or information provided to make decisions about consumer credit, employment, insurance, tenant screening, or any other purpose that would require FCRA compliance." Def. CSF ¶¶ 20-21. MyLife's website also warns consumers that it is not a credit reporting agency. Def. CSF ¶ 23.
E. Defendants’ Finances
MyLife generated $14 million in net revenue in 2016, $17.8 million in 2017, $24.9 million in 2018, $38.5 million in 2019, and $29 million through the first nine months of 2020. Gov. CSF ¶ 77. From 2017 to 2020, MyLife paid approximately $18 million in dividends to Tinsley and its other investors, and paid a total of more than $6 million in salaries to Tinsley and its nine other top executives. Gov. CSF ¶ 78. Defendant Tinsley owns two homes worth a total of at least $5.5 million and a vintage sports car collection worth at least $290,000. Gov. CSF ¶ 79.
F. The Complaint
In its Complaint filed on July 27, 2020, the Government alleges the following claims for relief against Defendants: (1) deceptive business practices in violation of Section 5(a) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 45(a) ; (2) violation of the Telemarketing Sales Rule ("TSR"), 16 C.F.R. § 310.3(a)(1)-(2) ; (3) violation of the Restore Online Shoppers’ Confidence Act ("ROSCA"), 15 U.S.C. § 8403 ; and (4) violation of the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681a(d), 1681b.
The Government moves for summary judgment on all of its claims for relief. Defendants argue that they are entitled to partial summary judgment as to: (1) the TSR claim for inbound retention calls and outbound calls; (2) the claim for violation of Section 5(a) of the FTC Act; (3) the FCRA claim; and (4) the Government's request for restitution and penalties against Defendant Tinsley.
II. LEGAL STANDARD
Summary judgment is proper where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the burden of demonstrating the absence of a genuine issue of fact for trial. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Once the moving party meets its burden, a party opposing a properly made and supported motion for summary judgment may not rest upon mere denials but must set out specific facts showing a genuine issue for trial. Id. at 250, 106 S.Ct. 2505 ; Fed. R. Civ. P. 56(c), (e) ; see also Taylor v. List , 880 F.2d 1040, 1045 (9th Cir. 1989) ("A summary judgment motion cannot be defeated by relying solely on conclusory allegations unsupported by factual data."). In particular, when the non-moving party bears the burden of proving an element essential to its case, that party must make a showing sufficient to establish a genuine issue of material fact with respect to the existence of that element or be subject to summary judgment. See Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "An issue of fact is not enough to defeat summary judgment; there must be a genuine issue of material fact, a dispute capable of affecting the outcome of the case." American International Group, Inc. v. American International Bank , 926 F.2d 829, 833 (9th Cir. 1991) (Kozinski, dissenting). An issue is genuine if evidence is produced that would allow a rational trier of fact to reach a verdict in favor of the non-moving party. Anderson , 477 U.S. at 248, 106 S.Ct. 2505. "This requires evidence, not speculation." Meade v. Cedarapids, Inc. , 164 F.3d 1218, 1225 (9th Cir. 1999). The Court must assume the truth of direct evidence set forth by the opposing party. See Hanon v. Dataproducts Corp. , 976 F.2d 497, 507 (9th Cir. 1992). However, where circumstantial evidence is presented, the Court may consider the plausibility and reasonableness of inferences arising therefrom. See Anderson , 477 U.S. at 249-50, 106 S.Ct. 2505 ; TW Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n , 809 F.2d 626, 631-32 (9th Cir. 1987). Although the party opposing summary judgment is entitled to the benefit of all reasonable inferences, "inferences cannot be drawn from thin air; they must be based on evidence which, if believed, would be sufficient to support a judgment for the nonmoving party." American International Group , 926 F.2d at 836-37. In that regard, "a mere ‘scintilla’ of evidence will not be sufficient to defeat a properly supported motion for summary judgment; rather, the nonmoving party must introduce some ‘significant probative evidence tending to support the complaint.’ " Summers v. Teichert & Son, Inc. , 127 F.3d 1150, 1152 (9th Cir. 1997).
III. DISCUSSION
A. Defendants’ Evidentiary Objections Re: Consumer Complaints and Consumer Declarants.
As noted supra , to the extent that the Court has relied on evidence to which the parties have objected, the Court has considered and overruled those objections. The Court, however, will specifically address Defendants’ objections to two categories of evidence (consumer complaints and consumer declarants) in greater detail.
With respect to the spreadsheet of 175 alleged consumer complaints offered by the Government (i.e., Mastrocinque Decl. ¶ 8, Ex. 128), Defendants object on the grounds that the complaints constitute inadmissible hearsay. The Court overrules that objection and concludes that complaints are admissible as statements of the complainants’ mental conditions under Federal Rule of Evidence 803(6) and under the residual hearsay exception in Rule 807. Under Rule 807, a hearsay statement is not excluded by the rule against hearsay if: "(1) the statement is supported by sufficient guarantees of trustworthiness -- after considering the totality of circumstances under which it was made and evidence, if any, corroborating the statement; and (2) it is more probative on the point for which it is offered than any other evidence that the proponent can obtain through reasonable efforts." Fed. R. Evid. 807(a). The Court concludes that these requirements are met. The complainants contacted a federal agency of their own volition to complain about MyLife's practices, they do not know each other (other than a select few), they had similar experiences, they had no motive to manufacture evidence, and the complainants’ statements are consistent and corroborate each other. In addition, it would be impractical to force the Government to obtain affidavits from hundreds or thousands of people to demonstrate the scope of Defendants’ misconduct. See FTC v. Figgie Int'l, Inc. , 994 F.2d 595, 608 (9th Cir. 1993). Accordingly, the Court concludes that Exhibit 128 is admissible.
With respect to the declarations of Archibald, DeLara, Duvos, Fitzgerald, Gilliford, Gleeson, Hubbell, Kellet, Kimball, Lanning, Nordstrom, Stabbe, Tikhov, and Watson, Defendants object on the grounds that the Government failed to disclose these witnesses in its Initial Disclosures or interrogatory responses as required by Federal Rule of Civil Procedure 26(a)(1)(A)(i)-(ii). However, with the exception of Gilliford, these consumer declarants were disclosed by August 23, 2021 at the latest, before discovery closed on September 6, 2021. And, notably, Defendants have not made any request for additional time to address this evidence under Federal Rule of Civil Procedure 56(d). Accordingly, the Court will consider the declarations except for the declaration of Gilliford, which the Government withdrew.
B. MyLife Engaged in Deceptive Acts in Violation of the FTC Act.
The Court concludes that the Government has established, based on the undisputed facts, that MyLife engaged in deceptive acts in violation of the FTC Act.
Section 5 of the FTC Act prohibits "deceptive acts or practices in or affecting commerce." 15 U.S.C. § 45(a)(1). A practice falls within this prohibition (1) if it is likely to mislead consumers acting reasonably under the circumstances (2) in a way that is material. FTC v. Cyberspace.Com LLC , 453 F.3d 1196, 1199-200 (9th Cir. 2006).
"A representation is ‘likely to mislead consumers’ when (1) the representation is false; or (2) the advertiser lacked a reasonable basis for its claims." Fed. Trade Comm'n v. Elegant Sols., Inc. , 2020 WL 4390381, at *8 (C.D. Cal. July 6, 2020) (quoting F.T.C. v. John Beck Amazing Profits, LLC , 865 F. Supp. 2d 1052, 1067 (C.D. Cal. 2012) ). However, "[a] solicitation may be likely to mislead by virtue of the net impression it creates even though the solicitation also contains truthful disclosures." F.T.C. v. Cyberspace.Com LLC , 453 F.3d 1196, 1200 (9th Cir. 2006). A misleading solicitation is material if it "involves information that is important to consumers and, hence, likely to affect their choice of, or conduct regarding, a product." F.T.C. v. Cyberspace.Com LLC , 453 F.3d 1196, 1201 (9th Cir. 2006).
The Court concludes, as a matter of law, that MyLife's website is "likely to mislead consumers acting reasonably under the circumstances." Specifically, MyLife's website displays prominent red banners on over 60 million individuals’ profiles, declaring that the individual "DOES" have "arrest or criminal records" or "court, arrest or criminal records." Gov. CSF ¶ 13. These banners or "flags" create the deceptive and misleading impression that these individuals have criminal records, even though the flags may not be accurately matched to the profiles on the MyLife website and could refer to anything from a minor non-criminal traffic ticket or other minor infraction to a murder conviction.
Moreover, with respect to the 250 million individuals without a criminal, arrest, or court record "flag" or banner, MyLife includes statements on those individuals’ profiles that the individual "may have Arrest or Criminal Records." MyLife's assertion that 250 million people "may" have criminal records or court records creates the misleading and deceptive impression that MyLife has information suggesting that such criminal or court records exist, when, in fact, MyLife has absolutely no information indicating that these individuals have any such records. The lack of substantiation for these claims is not meaningfully disputed, and the Court concludes that such claims are deceptive as a matter of law. FTC v. Direct Mktg. Concepts, Inc. , 624 F.3d 1, 8 (1st Cir. 2010).
The Court concludes that these misleading and deceptive statements are "material," i.e., "involve[ ] information that is important to consumers and, hence, likely to affect their choice of, or conduct regarding, a product." Indeed, MyLife recognizes that these derogatory statements about consumers are material and induce or entice consumers to purchase MyLife's services. See Dietert Decl., Ex. 102, p.3 (Tinsley email stating that it was "f------ amazing" that so many flags came back from LexisNexis during a data dump in 2017 because it provides "so much opportunity" for the company). Morever, the Government has presented substantial evidence that consumers were in fact misled, distressed, and alarmed that MyLife would declare or insinuate that they had criminal or court records (when many had none) as well as evidence that some consumers purchased MyLife's services to determine the basis for MyLife's representations. See, e.g. , Mastrocinque Decl. ¶ 8, Ex. 128; Archibald Decl. ¶¶ 3, 9; DeLara Decl. ¶¶ 3-6, 8; Duvos Decl. ¶¶ 2-3; Fitzgerald Decl. ¶¶ 2-4; Kimball Decl. ¶¶ 3-4; Stabbe Decl. ¶¶ 3-6; Tikhov Decl. ¶¶ 2-6.
In effect, MyLife classifies everyone as a criminal or potential criminal for reasons MyLife will not disclose unless and until the consumer purchases a subscription. The Court concludes that these marketing practices are deceptive and material as a matter of law, and violate Section 5 of the FTC Act. Accordingly, the Government's Motion for Summary Judgment as to its claim against MyLife for deceptive business practices in violation of Section 5(a) of the FTC Act is GRANTED .
C. MyLife Violated the Telemarketing Sales Rule.
The Telemarketing Sales Rule ("TSR") promulgated pursuant to the FTC Act prohibits a seller or telemarketer from engaging in certain deceptive acts or practices. As relevant here, sellers, such as MyLife, must disclose all material terms and conditions of their refund and cancellation policies and "negative-option features," may not misrepresent such policies or features, and may not misrepresent material aspects of the services offered for sale. 16 C.F.R. § 310.3(a)(1)(iii), (vii), (a)(2)(iii).
A "[n]egative option feature means, in an offer or agreement to sell or provide any goods or services, a provision under which the customer's silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer." 16 C.F.R. § 310.2(w). The Court concludes that MyLife's automatic renewal feature or AR feature constitutes a "negative option feature." See Docket No. 49 at 5.
1. MyLife's Outbound Sales Calls Violated the TSR.
It is undisputed that, in August 2016, MyLife's call centers placed 282 outbound telemarketing calls to consumers who had "abandoned" the checkout page on the MyLife website, and that at least 73 of these calls reached live consumers. The scripts for these calls reveal that MyLife did not disclose all material terms and conditions of the automatic renewal feature of the subscriptions. Indeed, the sales scripts even instructed agents to misleadingly request that consumers try MyLife "for just one month," yet instructed the agents to set those subscriptions to auto-renew unless the consumer expressly asked for no future billing. See, e.g. , Dietert Decl., Ex. 84. These calls therefore violate the requirements of 16 C.F.R. § 310.3(a)(1)(vii) and (a)(2)(ix), which require MyLife to disclose, before a customer consents to pay for the services offered, all material terms and conditions of the negative option feature, "including, but not limited to, the fact that the customer's account will be charged unless the customer takes an affirmative action to avoid the charge(s), the date(s) the charge(s) will be submitted for payment, and the specific steps the customer must take to avoid the charge(s)."
Rather than meaningfully dispute the merits of the Government's claim, Defendants argue that the Government's claim for consumer redress under 15 U.S.C. § 57b(d) as to outbound calls is time-barred. The Government agrees. See Gov. Opposition (Docket No. 137) at 4 ("The Government agrees as to calls older than the consumer redress statute of limitations, and does not seek Section 57b(d) consumer redress for those calls."). Accordingly, to the extent the Government seeks consumer redress under 15 U.S.C. § 57b(d) as to outbound calls, Defendants’ motion for partial summary judgment is granted. However, the Government represents that it does not seek consumer redress as to outbound calls, but rather seeks civil penalties for these TSR violations under 15 U.S.C. § 45(m). The statute of limitations for civil penalties under the FTC Act is five years. See 28 U.S.C. § 2462. Accordingly, the Court concludes that the Government's claim for civil penalties with respect to outbound calls is not time-barred.
2. MyLife's Removal Calls Violated the TSR.
The Court also concludes, as a matter of law, that MyLife's removal calls violated the TSR. Inbound calls are generally exempt under the TSR unless "upselling" occurred on such calls. See 16 C.F.R. § 310.6(b)(4), (5)(iii), (6)(iii). "Upselling" in the TSR is defined as:
soliciting the purchase of goods or services following an initial transaction during a single telephone call. The upsell is a separate telemarketing transaction, not a continuation of the initial transaction.
It is undisputed that MyLife converts removal calls (i.e., calls from consumers who wish to have their profile or information removed from MyLife's website) into sales calls by pitching MyLife's services. Gov. CSF ¶ 65. Indeed, MyLife "aims to turn these 2,000 weekly calls into a profit center for the business." See Gov. CSF ¶ 66; Dietert Decl., Ex. 25, p.5. Thus, MyLife engaged in "upselling" on these calls, or, in other words, solicited the purchase of its services following an initial transaction during a single telephone call. Accordingly, these removal calls are subject to the TSR.
During these removal calls, MyLife fails to make all of the required disclosures under the TSR. For example, MyLife fails to disclose, "[b]efore a customer consents to pay for ... [the] services offered," that MyLife "has a policy of not making refunds." 16 C.F.R. § 310.3(a)(1)(iii) ; see Dietert Decl., Exs. 25, 26, 28. 74. In addition, unless the customer expressly asks about auto-renewal, MyLife fails to disclose, before a customer consents to pay for the services offered, "all material terms and conditions of the negative option feature, including but not limited to, the fact that the customer's account will be charged unless the customer takes an affirmative action to avoid the charge(s), the date(s) the charge(s) will be submitted for payment, and the specific steps the customer must take to avoid the charge(s)." 16 C.F.R. § 310.3(a)(1)(vii) ; see Dietert Decl., Exs. 25, 26, 28, 74. Accordingly, the Court concludes that these removal calls violate the TSR.
3. MyLife's Retention Calls Violated the TSR.
The Court also concludes that MyLife's retention calls violated the TSR.
As an initial matter, the Court concludes that these calls are not exempt under the TSR because MyLife engaged in "upselling" on these calls. In other words, the Court concludes that MyLife "solicit[ed] the purchase of goods or services following an initial transaction during a single telephone call." 16 C.F.R. § 310.2(hh).
In announcing the final amended TSR in 2003, the FTC made clear that if a seller chooses to solicit the purchase of goods or services during a call initiated by the customer for a non-sales-related purpose (in this case, cancellation), the seller has engaged in "upselling" and the call is subject to the TSR. The FTC explained:
The definition of "upselling" encompasses any solicitation for goods or services that follows an initial transaction of any sort in a single telephone call.... The term "initial transaction" is intended to describe any sort of exchange between a consumer and a seller or telemarketer, including but not limited to sales offers, customer service calls initiated by either the seller or telemarketer or the consumer, consumer inquiries, or responses to general media advertisements or direct mail solicitations. The upsell is defined as a "separate telemarketing transaction, not a continuation of the initial transaction" to emphasize that an upsell is to be treated as a new telemarketing call, independently requiring adherence to all relevant provisions of the Rule.
Upselling occurs in a wide variety of circumstances—as an addendum to a customer service call , or after an initial offer of goods or services via an inbound or outbound telephone call, for example.
Telemarketing Sales Rule, 68 Fed.Reg. 4,580, 4,596 -97 (Jan. 29, 2003) (emphasis added).
Defendants argue that MyLife's efforts to retain their customers did not constitute "upselling" because retention calls did not involve a separate telemarketing transaction, but rather involved "efforts to educate the customer on the value of MyLife's services and convince them to retain their original subscription." Defendants’ Motion for Partial Summary Judgment (Docket No. 76) at 13; see Def. CSF ¶¶ 34, 36, 39, 43. It is undisputed, however, that customers placing retention calls called MyLife for a non-sales purpose, i.e., to cancel their subscription, which they should have been permitted to do. However, instead of simply processing the cancellation and ending the call, MyLife subjected these customers to a six-part sales script, which included offers for MyLife's services under terms different than their original subscriptions (e.g., an adjustment to the term of the subscription or monthly billing amount or the provision of an extra service as a "free" gift). See Gov. CSF ¶¶ 41, 57; Def. CSF ¶¶ 39, 43. The FTC clearly intended such calls, especially if they include new offers with different terms, to be covered and protected by the TSR. As the FTC explained:
According to NCL [National Consumers League], ... "[c]omplaints to the NFIC [National Fraud Information Center] indicate that abuses can occur when consumers who respond to an advertisement for one thing are then solicited for something else, especially if the new offer is significantly different than the original one or is from another vendor. In these situations, the only information that consumers have on which to decide whether to make a purchase or donation is that which is provided during the call. In other words, in any upsell, the seller or telemarketer initiates the offer; it is not the consumer who solicits or requests the transaction. This means that the consumer is hearing the terms of that upsell offer for the first time on the telephone. The consumer has not had an opportunity to review and consider the terms of the offer ... before making the
purchase. This makes an upsell very much akin to an outbound telephone call from the consumer's perspective even when the seller is someone with whom the consumer is familiar. Thus, as the NCL noted, every consumer needs "the same basic disclosures about who they're dealing with, what they're buying and the terms and conditions [of the offer]" regardless of the nature of the telephone sale. The disclosure provisions of §§ 310.3(a) and 310.4(d) were designed to ensure that consumers know they are being offered goods or services for sale, and receive all information material to their decision to accept an offer before they pay for the purchase.
68 Fed.Reg. 4,580, 4,597 (Jan. 29, 2003). Accordingly, because MyLife converted what should have been simple cancellation calls into sales calls, the Court concludes that MyLife's retention calls are subject to the TSR.
The sales scripts for these calls demonstrate that MyLife's retention calls violated the TSR. Specifically, MyLife agents failed to disclose all terms and conditions of the negative-option feature of MyLife's services prior to obtaining the customer's consent to pay. 16 C.F.R. § 310.3(a)(1)(vii), (a)(2)(ix). For example, in one of these retention scripts, when a customer used "magic words" such as "FTC," "Attorney General," "BBB," "lawsuit" during the sales pitch, agents were instructed to respond with the following offer:
At the time of purchase there were two options to buy. You were able to lock in a 50% discount by selecting the annual, upfront purchase. The monthly-billed option for this membership is regularly 29.95. Although the membership is non refundable I can help you obtain a refund today by changing your membership to bill monthly. Making this adjustment to your membership will allow a refund of xx.xx and the remaining months of your membership would be billed monthly at 29.95 per month on the X of each month. Would you like me to process that refund now?
Dietert Decl., Ex. 37 (emphasis added). The agents, however, were not told to inform customers that the automatic renewal feature would remain enabled, and that even at the end of the original annual term, MyLife would continue to charge the customer the monthly fee of $29.95 unless and until the customer cancelled. In fact, by advising the consumer that the "remaining months of your membership would be billed monthly at 29.95 per month on the X of each month," agents misled customers into believing that MyLife's billing would cease at the end of the original annual term.
This retention script (attached to an email dated December 9, 2015) is just one example of MyLife's consistent failure to disclose all terms and conditions of MyLife's automatic renewal feature. Other retention scripts used at different times similarly fail to disclose all terms and conditions of MyLife's automatic renewal feature in violation of the TSR. See, e.g. , Dietert Decl., Ex. 38, p. 6; Ex. 45, p. 6.
In addition, during these retention calls, agents were instructed to advise customers that MyLife's terms and conditions state that "our subscriptions are non-refundable." Gov. CSF ¶ 42; see, e.g. , Dietert Decl., Ex. 45. However, it is undisputed that MyLife gives full refunds to customers who are "irate, adamant" or who use so-called "Magic Words," such as "FTC," "Attorney General," "BBB," "lawsuit," and others. Gov. CSF ¶¶ 61-62. Accordingly, because agents failed to disclose "all material terms and conditions" of MyLife's refund policy, these retention calls violated the TSR. See 16 C.F.R. § 310.3(a)(1)(iii), (a)(2)(iv). For the foregoing reasons, the Government's Motion for Summary Judgment as to its TSR claim against MyLife is GRANTED , except that the Government may not seek consumer redress under 15 U.S.C. § 57b(d) as to the outbound calls that occurred in August 2016. Defendants’ Motion for Partial Summary Judgment is GRANTED to the extent the Government seeks consumer redress under 15 U.S.C. § 57b(d) as to those outbound calls.
D. MyLife Violated ROSCA.
The Court also concludes, based on the undisputed facts, that the Government has established that MyLife violated ROSCA. ROSCA generally prohibits charging consumers for services sold on the internet via a negative-option feature, which is defined as "an offer or agreement to sell or provide ... services, a provision under which the customer's silence or failure to take an affirmative action to reject ... services or to cancel the agreement is interpreted by the seller as acceptance of the offer." 16 C.F.R. § 310.2(w) ; see 15 U.S.C. § 8403. ROSCA allows a seller to use a negative-option feature only if the seller: (1) clearly and conspicuously discloses all material terms of the transaction before obtaining the consumer's billing information; (2) obtains the consumer's express informed consent before making the charge; and (3) provides simple mechanisms to stop recurring charges. 15 U.S.C. § 8403.
In its Statement of Decision Denying MyLife.com, Inc.’s Motion to Dismiss, the Court already determined that MyLife's automatic renewal policy as alleged in the complaint is a negative-option feature covered by ROSCA. Dkt. 49 at 5-6. The undisputed evidence reveals that MyLife's auto-renewal feature operated as described in the complaint -- that is, that the consumer's silence or failure to cancel was interpreted by the seller as acceptance of the offer. Thus, MyLife's auto-renewal sales are therefore covered by ROSCA.
Based on the undisputed evidence, the Court concludes that MyLife did not provide "simple mechanisms" to stop recurring charges, and thus violated ROSCA. Indeed, until May 2018, when a MyLife customer wanted to cancel their subscription or cancel automatic renewal, MyLife primarily offered one method of cancellation: the telephone. Gov. CSF ¶ 37. When a customer finally reached an agent to cancel, the customer was confronted with a six-part "retention" sales script aimed at convincing the customer not to cancel. Gov. CSF ¶ 41. No reasonable factfinder could find this mechanism "simple." Accordingly, the Government's Motion for Summary Judgment as to its ROSCA claim against MyLife is GRANTED .
As discussed in more detail infra , although some customers may have been able to cancel their subscriptions via email, MyLife generally directed customers to call Customer Care by phone if they wished to cancel their subscription or cancel automatic renewal. Kinsley Dep. 158:10-24, July 8, 2021; Dietert Decl., Ex. 9-10, 34, 109; Iglesias Decl. ¶ 6a, Ex. 2, pp. 12-13; Karmand Opp. Decl. ¶ 21, Ex. 155; Kinsley Decl. ¶ 6. Of course, MyLife preferred the customer to call Customer Care by phone so that MyLife had the opportunity to convince the customer to keep paying for MyLife's services.
E. FCRA Claim
The Court concludes that there are genuine issues of material fact with respect to the Government's FCRA claim. Accordingly, the Court DENIES the Government's and Defendant's motions for summary judgment as to this claim.
F. Individual Liability Against Defendant Jeffrey Tinsley For Consumer Redress
The Court concludes that there are genuine issues of material fact as to whether Defendant Jeffrey Tinsley is individually liable for consumer redress under the FTC Act. Accordingly, the Court DENIES the Government's and Defendants’ motion for summary judgment on this issue.
G. Statutory Injunction
Unlike private actions, in actions for statutory injunctive relief, the United States need not prove irreparable injury or the inadequacy of other remedies as required in private injunctive suits. Trailer Train Co. v. State Bd. of Equalization , 697 F.2d 860, 869 (9th Cir. 1983). Rather, a prima facie showing that a violation of the law has occurred and that "there is some reasonable likelihood of future violations" is sufficient to obtain statutory injunctive relief. CFTC v. Fin. Tree , No. 20-cv-01184, 542 F.Supp.3d 992, 999 (E.D. Cal. July 28, 2020) (collecting cases). Past misconduct is highly suggestive of the likelihood of future violations. Id.
The Court concludes that the Government has demonstrated that statutory injunctive relief is appropriate. In 2012, albeit without admitting liability or wrongdoing, MyLife entered into a settlement with the State of Washington in which it promised, inter alia , to clearly and conspicuously disclose the amount that a consumer will be charged before collecting payment, and to clearly and conspicuously disclose that a membership or subscription service will automatically renew unless the consumer actively cancels the service. Gov. CSF ¶ 53. In addition, in 2015, albeit without admitting liability or wrongdoing, MyLife entered into a settlement with the County of Los Angeles and the City of Santa Monica, and stipulated to a Final Judgment and Injunction which prohibited MyLife from, inter alia , "making any untrue or misleading statements, intended to promote sales, on its website, emails, advertising or other marketing." Gov. CSF ¶ 54. And, yet despite these prior promises and/or injunctions, MyLife has continued to engage in similar misconduct. Accordingly, given MyLife's past history of misconduct, the Court concludes that the Government has demonstrated that there is a reasonable likelihood that MyLife will commit future violations.
Although the Court concludes that statutory injunctive relief is appropriate, the Court defers ruling on the scope of the injunctive relief until the parties provide supplemental briefing on this issue and/or until after trial.
H. Consumer Redress
Section 57b of the FTC Act authorizes the Government to seek, inter alia , "rescission or reformation of contracts, the refund of money or return of property, [and] the payment of damages" for violations of FTC rules such as the TSR and ROSCA. 15 U.S.C. §§ 57b(a)(1) - (b). Section 57b relief is a statutory remedy that reflects Congress's strong intent to compensate consumers. The Court concludes such refunds are an appropriate remedy for MyLife's TSR and ROSCA violations.
To obtain consumer redress under Section 57b of the FTC Act, the Government need only prove the existence of rule violations, with no state-of-mind requirement. FTC v. Figgie Int'l, Inc. , 994 F.2d 595, 603 (9th Cir. 1993). Importantly, "the FTC need not prove that every consumer was injured" to obtain redress. FTC v. Stefanchik , 559 F.3d 924, 939 & n.12 (9th Cir. 2009). A presumption of actual reliance arises once the Government proves that MyLife made material misrepresentations, that they were widely disseminated, and that consumers bought MyLife's product. Figgie Int'l , 994 F.2d at 605-06. The appropriate measure of consumer redress in this case is My Life's net revenues. FTC v. Com. Planet, Inc. , 815 F.3d 593, 603 (9th Cir. 2016), abrogated on other grounds by AMG Cap. Mgmt., LLC v. FTC , 593 U.S. ––––, 141 S. Ct. 1341, 209 L.Ed.2d 361 (2021).
For the purposes of summary judgment, the United States seeks consumer redress of a total of $23,589,762 for MyLife's TSR violations and $15,871,682 for MyLife's ROSCA violations. As to the TSR redress figure, there is no material dispute that $23,589,762 represents the "save dollars" that MyLife retained from failing to disclose or misrepresenting its refund policies and from failing to disclose all terms and conditions of the negative-option feature for the time period November 1, 2016 to September 30, 2020.
There is also no material dispute that $15,871,682 represents a reasonable approximation of monies MyLife obtained from selling or renewing negative-option subscriptions covered by ROSCA from the time period November 2016 until April 2018 -- a time period when the uncontested record evidence demonstrates that MyLife failed to provide simple mechanisms to cancel recurring subscriptions. The appropriate method to redress these consumers under Section 57b is to refund the amounts consumers paid. FTC v. Febre , 128 F.3d 530, 536 (7th Cir. 1997). There is some practical overlap between these two redress figures because they cover some of the same consumers during some of the same time period. Accordingly, the Court concludes that the TSR redress figure should be reduced by $5,515,745 to $18,074,016 in order to prevent double recovery -- for a total redress award of $33,945,698.
I. Civil Penalties
The Court concludes that there are genuine issues of material fact with respect to the Government's request for civil penalties. Accordingly, the Government's Motion for Summary Judgment and Defendants’ Motion for Partial Summary Judgment are DENIED as to the issue of civil penalties.
IV. CONCLUSION
For the foregoing reasons, the Government's Motion for Summary Judgment is GRANTED in part, DENIED in part . Specifically, the Court GRANTS the Government's Motion for Summary Judgment as to its claims against MyLife under Section 5(a) of the FTC Act; the TSR, 16 C.F.R. § 310.3(a)(1)-(2) ; and ROSCA, 15 U.S.C. § 8403, and for consumer redress under 15 U.S.C. § 57b(a)(1). The Court also GRANTS the Government's request for injunctive relief against MyLife but DEFERS ruling on the scope of that injunctive relief. The Court DENIES the Government's Motion for Summary Judgment as to its claim under the Fair Credit Reporting Act, 15 U.S.C. §§ 1681a(d), 1681b against Defendants, its claims for individual liability against Defendant Tinsley, and its claim for civil penalties against Defendants.
Defendants’ Motion for Partial Summary Judgment is GRANTED in part, DENIED in part. The Court GRANTS Defendants’ Motion for Partial Summary Judgment to the extent the Government seeks consumer redress under 15 U.S.C. § 57b(d) as to the outbound calls that occurred in August 2016. In all other respects, Defendants’ Motion for Partial Summary Judgment is DENIED .
IT IS SO ORDERED.