Success by Health trial narrowed to Individual Defendants
Resolution of several motions in the Success by Health case, have pushed the FTC’s claims against the Individual Defendants to the forefront.
A hearing was held on February 17th, following which we’ve had some important decisions come in.
The motions ruled on are complex, with the issues behind them becoming increasingly intertwined.
This was evident in the Court’s orders, which linked outstanding motions together.
On the one hand, the Court stands by its previous determination that the receiver has the right to choose the Corporate Defendants’ counsel.
This is a basic and necessary function of a receivership.
On the other hand, the FTC’s proposed course of action would raise its own set of concerns.
The FTC asks the Court to grant summary judgment against the Corporate Defendants on the issue of liability, even though the receiver did not file a response to the FTC’s summary judgment motion (due to a belief, which was shared by the Court, that the FTC was only moving against the Individual Defendants), and force the Corporate Defendants to proceed to trial on the issue of monetary remedies without any representation.
What the court’s decisions came down to was a Catch 22. Right now, having Noland choose an attorney for the Corporate Defendants is unnecessary.
This is because it’s still not certain whether the FTC will be able to claim monetary damages against the individual Success by Health defendants (Noland and the gang).
The Individual Defendants have argued that the FTC will not be able to obtain any award of monetary remedies against them due to the FTC’s failure to disclose a damages methodology (apart from the methodology that was deemed invalid in the summary judgment order on monetary remedies).
Without prejudging the issue, the Court observes that this argument has some force.
This ties into the FTC being awarded summary judgment liability against the corporate defendants, because if they can’t claim monetary damages, they’ve previously agreed damages sought against the Corporate Defendants won’t “exceed damages being sought against the Individual Defendants”.
To break that down, if the FTC are barred from seeking monetary damages against the Individual Defendants, that renders monetary liability against the Corporate Defendants as moot.
To that end both the FTC’s liability and the Individual Defendants’ representation motions were denied.
The court additionally stayed any claims the FTC has against the Corporate Defendants.
The court has essentially kicked both issues down the road, pending resolution of the issues between the FTC and the Individual Defendants.
Unrelated to the issues above, at the February 17th hearing Noland also sought to have the asset freeze lifted to release a studio.
I imagine this was part of Success by Media, which forms part of the Corporate Defendants.
The court denied the request, stating it would not “lift the asset freeze”.
Looking forward there are some confidentiality issues with discovery that need to be resolved.
At time of publication we don’t have a Success by Health trial date yet.