Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 1 of 12 PageID #: 3967
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`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
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`§
`§
`§
`§
`§
`§
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`CASE NO. 4:15-CV-829
`Judge Mazzant
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`FEDERAL TRADE COMMISSION
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`v.
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`LIBERTY SUPPLY CO., also d/b/a Omni
`Services; ET. AL.
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`
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`MEMORANDUM OPINION AND ORDER
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`Pending before the Court is Plaintiff Federal Trade Commission’s Motion to Strike
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`Defendants’ Jury Demand (Dkt. #82), Plaintiff Federal Trade Commission’s Motion to Strike
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`Defendants’ Affirmative Defenses (Dkt. #108), and Plaintiff Federal Trade Commission’s
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`Motion to Strike Defendant Norma Hart’s Affirmative Defenses (Dkt. #121). After reviewing
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`the relevant pleadings, the Court finds that the FTC’s motion to strike the jury demand should be
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`granted, the FTC’s motion to strike Defendants’ affirmative defenses should be granted in part
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`and denied in part, and the FTC’s motion to strike Defendant Norma Hart’s affirmative defenses
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`should be granted in part and denied in part.
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`BACKGROUND
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`On December 4, 2015, the Federal Trade Commission (the “FTC”) filed the present case
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`to stop Defendants’ deceptive sales of non-durable business supplies to churches, schools, and
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`small businesses nationwide (Dkt. #1). On December 4, 2015, the Court entered an ex parte
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`temporary restraining order (the “TRO”), and set the preliminary injunction hearing for
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`December 17, 2015 (Dkt. #12). The Court conducted its preliminary injunction hearing, and
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`entered its preliminary injunction on December 30, 2015 (Dkt. #36).
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`On February 19, 2016, Defendants John B. Hart (“John Hart”), Liberty Supply Company
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`(“Liberty Supply”), Mia L. McCrary (“McCrary”), and Nor-Jay Enterprises (“Nor-Jay”)
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`1
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 2 of 12 PageID #: 3968
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`(collectively, the “Liberty Supply Defendants”) filed their answer to the complaint, in which they
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`asserted their right to a jury trial (Dkt. #73).
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`On February 23, 2016, the FTC filed an amended complaint, in which it added Norma
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`Hart and Texas 110 as defendants (Dkt. #76). The FTC’s amended complaint stated that it
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`sought to obtain “permanent injunctive relief, rescission or reformation of contracts, restitution,
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`the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief for
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`Defendants’ acts or practices….” (Dkt. #76 at p. 2). On May 2, 2016, Texas 110 filed its answer
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`to the amended complaint (Dkt. #103). On May 6, 2016, the Liberty Supply Defendants filed
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`their answer to the amended complaint, in which they requested that the matter be tried before a
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`jury, and asserted seven other affirmative defenses (Dkt. #104). On May 27, 2016, Norma Hart
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`filed her answer to the amended complaint, in which she requested that the matter be tried before
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`a jury, and asserted six additional affirmative defenses (Dkt. #109).
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`On February 25, 2016, the Liberty Supply Defendants filed their demand for a jury trial
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`(Dkt. #80). On March 3, 2016, the FTC filed its Motion to Strike Defendants’ Jury Demand
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`(Dkt. #82). On March 21, 2016, the Liberty Defendants filed their response (Dkt. #84). On
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`March 24, 2016, the FTC filed its reply (Dkt. #87).
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`On May 26, 2016, the FTC filed its Motion to Strike the Defendants’ Affirmative
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`Defenses (Dkt. #108). On June 13, 2016, the Liberty Supply Defendants filed their response
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`(Dkt. #115). On June 23, 2016, the FTC filed its reply (Dkt. #123). On July 5, 2016, the Liberty
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`Supply Defendants filed their sur-reply (Dkt. #139).
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`On June 20, 2016, the FTC filed its Motion to Strike Defendant Norma Hart’s
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`Affirmative Defenses (Dkt. #121). On July 5, 2016, Norma Hart filed her response (Dkt. #141).
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`2
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 3 of 12 PageID #: 3969
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`Motion to Strike Jury Demand (Dkt. #82):
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`ANALYSIS
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`The FTC asks the Court to strike Defendants’ Jury Demand (Dkt. #82).1 Defendants
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`assert that the jury demand should not be stricken as the motion is premature (See Dkt. #84).
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`Defendants’ deadline for amended pleadings passed on July 15, 2016. As Defendants, including
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`Norma Hart, have included their right for a jury trial within their answer, and have not filed any
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`additional pleadings, the Court finds that the motion is ripe, and will address the parties’
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`arguments.
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`The Seventh Amendment guarantees a litigant’s right to a trial by jury “[i]n Suits at
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`common law, where the value in controversy shall exceed twenty dollars.” U.S. CONST. amend.
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`VII. The scope of this right is analyzed under a two-prong inquiry. First, the Court must
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`determine whether the cause of action is analogous to a suit at law or a suit in equity in
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`eighteenth century England. City of Monterey v. Del Monte Dunes, 526 U.S. 687, 708 (1999);
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`Borst v. Chevron Corp., 36 F.3d 1308, 1323 (1994). The Court must also examine whether the
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`relief sought is “legal or equitable in nature.” Id. The second step carries more weight than the
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`first. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 (1989). In order to be entitled to a jury
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`trial under the Seventh Amendment, the relief sought by the plaintiff must be characterized as
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`legal. Tull v. United States, 481 U.S. 412, 425 (1987).
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`Under the first-prong of the test, the FTC’s claims are equitable in nature. The FTC has
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`brought the present action under Sections 13(b) and 19 of the FTC Act, and sought only
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`equitable relief in the form of injunctive and ancillary equitable monetary relief (Dkt. #76 at pp.
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`14-15). Federal courts, including a district court within the Eastern District of Texas, “have
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`1 Defendants have each included within their answers, an affirmative defense for the right to trial by jury.
`Therefore, the Court’s analysis regarding the FTC’s motion to strike the jury demand will also apply to Defendants’
`affirmative defenses.
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`3
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 4 of 12 PageID #: 3970
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`unanimously held that the Seventh Amendment does not provide a right to a trial by jury in
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`actions brought under Section 13(b).” FTC v. Think All Publ’g L.L.C., 564 F. Supp. 2d at 663,
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`665 (E.D. Tex. 2008); see FTC v. Verity Int’l, Ltd., 443 F.3d 48, 67 (2d Cir. 2006); FTC v.
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`Seismic Entm’t Prods., Inc., 441 F. Supp. 2d 349, 353 (D.N.H. 2006); FTC v. Bronson Partners,
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`L.L.C., No. 3:04cv1866, 2006 WL 197357, at *4 (D.Conn. Jan. 25, 2006); FTC v. Ne.
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`Telecomm., Ltd., No. 96-6081-CV, 1997 WL 599357, at *3 (S.D. Fla. June 23, 1997); FTC v.
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`Hang-Ups Art Enters., Inc., No. CV 95-0027, 1995 WL 914179, at *1-2 (C.D. Cal. Sept. 27,
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`1995); FTC v. Febre, No. 94 CV 3625, 1994 WL 702711, at *1-2 (N.D. Ill. Dec. 15, 1994); FTC
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`v. Abbott Labs., No. 92-1364, 1992 WL 427476, at *1 (D.D.C. Dec. 7, 1992).
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`This finding is consistent with the view of the authority of district courts in Section 13(b)
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`cases given by the Fifth Circuit and other Circuit Courts of Appeals. Think All Publ’g L.L.C.,
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`564 F. Supp. 2d at 665; see FTC v. Sw. Sunsites, Inc., 665 F.2d 711, 718 (5th Cir. 1982); Verity,
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`443 F.3d at 66, n. 5-9. For instance, in Southwest Sunsites, the Fifth Circuit made clear that in
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`Section 13(b) cases, the district courts may use “the full range of equitable remedies traditionally
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`available.” Sw. Sunsites, Inc., 665 F.2d at 718. The Fifth Circuit and numerous other courts
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`have held that actions under § 13(b) of the FTC Act are equitable in nature, even when seeking
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`ancillary monetary relief. See Sw. Sunsites, Inc., 665 F.2d at 718; see also FTC v. Febre, 128
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`F.3d 530, 534-36 (7th Cir. 1997) (holding “ancillary equitable relief” under 13(b) includes “the
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`power to order repayment of money for consumer redress as restitution” and affirming $16
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`million in disgorgement); FTC v. Gem Merch. Corp., 87 F.3d 466, 468 (11th Cir. 1996)
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`(awarding refund of $100 to 5,000 consumers as equitable consumer redress under 13(b)); FTC
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`v. Amy Travel Serv., Inc., 875 F.2d 564, 571 (7th Cir. 1989) (holding section 13(b)’s authority to
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`4
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 5 of 12 PageID #: 3971
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`grant injunctions includes authority to grant equitable monetary relief, “such as rescission and
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`restitution.”).
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`Likewise, courts have found that there is no right to a jury trial in cases brought under
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`Section 19 of the FTC Act to enforce rule violations when those cases are seeking equitable
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`relief, as in the present case. See FTC v. Mazzoni & Son, Inc., No. 06-15766, 2007 WL
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`3413086, at *3 (E.D. Mich. Aug. 14, 2007); FTC v. Commonwealth Mktg. Grp., Inc., 72 F. Supp.
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`2d 530, 543-45 (W.D. Pa. 1999); FTC v. AMREP Corp., 705 F. Supp. 119, 126 (S.D.N.Y. 1988).
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`The Court must now turn to the second prong of the analysis, whether the relief sought is
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`“legal or equitable in nature.” City of Monterey, 526 U.S. at 708. The Court finds that the
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`remedies that the FTC seeks in the present action are traditional equitable remedies. In the
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`present case, the FTC seeks a permanent injunction, restitution, rescission of contracts, and
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`disgorgement, which have all been held to be equitable remedies, as they serve to reinstate the
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`parties to their positions prior to the challenged conduct. See Chauffeurs, Teamsters, & Helpers,
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`Local No. 391 v. Terry, 494 U.S. 558, 570 (1990); Tull, 481 U.S. at 423-24; Think All Publ’g,
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`L.L.C., 564 F. Supp. 2d at 665; FTC v. H.N. Singer, 668 F.2d 1107, 1110-12 (9th Cir. 1982)
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`(restitution and rescission are appropriate equitable remedies under Sections 13(b) and 19).
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`Additionally, restitution of money is an equitable remedy. “Merely because [a] case involves a
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`claim for restitution of money does not detract from its equitable nature.” Simpson v. Office of
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`Thrift Supervision, 29 F.3d 1418, 1423-24 (9th Cir. 1994); see Think All Publ’g, L.L.C., 564 F.
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`Supp. 2d at 665. As the FTC’s action contains only equitable relief and ancillary monetary
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`relief, the Court finds that its motion to strike the jury demand should be granted.
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`5
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 6 of 12 PageID #: 3972
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`Motion to Strike Affirmative Defenses (Dkt. #108; Dkt. #121):
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`The FTC also asks the court to strike each of the affirmative defenses pleaded by the
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`Defendants.
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`Rule 12(f) empowers the Court to strike “an insufficient defense or any redundant,
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`immaterial, impertinent, or scandalous matter.” FED. R. CIV. P. 12(f). Motions under Rule 12(f)
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`are generally disfavored. Think All Publ’g, L.L.C., 546 F. Supp. 2d at 665 (citing Kaiser
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`Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1057 (5th Cir.
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`1982)). Defenses should be struck only “when the defense is insufficient as a matter of law.” Id.
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`First, the FTC alleges that “Defendants have not set forth in their Answers circumstances
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`or conduct to support each of their affirmative defenses sufficient to give the FTC fair notice of
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`the nature of the defenses, as required by Federal Rule of Civil Procedure 8.” (Dkt. #108 at p. 3;
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`see Dkt. #121 at p. 3). Affirmative defenses are subject to the same pleading standards as
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`complaints under Rule 8. Teirstein v. AGA Med. Corp., No. 6:08cv14, 2009 WL 704138, at *2
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`(E.D. Tex. Mar. 16, 2009) (citing Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999)).
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`However, the Fifth Circuit has explicitly acknowledged that “in some cases, merely pleading the
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`name of the affirmative defense…may be sufficient” to give the plaintiff fair notice of the
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`defense being advanced. Teirstein, 2009 WL 704138, at *6 (citing Woodfield, 193 F.3d at 362).
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`The Court finds that Defendants’ have sufficiently pleaded their affirmative defenses to put the
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`FTC on notice of the defense that is being advanced, except as to Defendants’ affirmative
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`defenses that are related to the Fifth Amendment and are addressed below.2 3
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`2 The FTC also asserts that public policy favors striking improper affirmative defenses that frustrate law
`enforcement actions (Dkt. #108 at p. 4; Dkt. #121 at p. 4). Specifically, the FTC argues that “Defendants should not
`be permitted to use legally insufficient ‘affirmative defenses’ to frustrate the purpose of a federal statute or to thwart
`public policy.” (Dkt. #108 at p. 4; Dkt. #121 at p. 4). The Court finds that Defendants’ affirmative defenses do not
`“thwart public policy[,]” and thus, will not strike Defendants’ affirmative defenses on this ground.
`3 The FTC also asserts that Defendants’ affirmative defenses should be stricken because they are actually negative
`defenses, and thus, simply repeat Defendants’ denials of the allegations of the amended complaint (see Dkt. #108 at
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`6
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 7 of 12 PageID #: 3973
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`The FTC asserts that Defendants’ first and second affirmative defenses4 should be
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`stricken as insufficient, redundant, immaterial, or impertinent as a matter of law (Dkt. #108 at p.
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`5; Dkt. #121 at p. 5). The FTC further alleges that Defendants’ first and second affirmative
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`defenses allege three separate defenses: “(1) an alleged failure of the FTC to plead with
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`particularity; (2) an alleged lack of knowledge; and (3) an alleged existence of good faith.” (Dkt.
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`#108 at p. 5; Dkt. #121 at p. 5)5.
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`First, the FTC asserts that Defendants’ affirmative defenses should be stricken as they
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`improperly plead a failure to state a claim assertion (Dkt. #108 at pp. 5-6; Dkt. #121 at pp. 5-6).
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`“This defense [was] specifically recognized in Form 30 of the Appendix to the Federal Rules of
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`Civil Procedure….Federal Rule of Civil Procedure 84 provides that ‘The forms in the Appendix
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`suffice under these rules.’” Two Men and a Truck Int’l, Inc. v. Two Guys Moving Bossier, LLC,
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`No. 15-254-SDD-RLB, 2015 WL 7573216, at *1 (M.D. La. Nov. 25, 2015). Rule 84 has since
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`been repealed effective December 1, 2015, and the Appendix of Forms has likewise been
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`effective December 1, 2015. See FED. R. CIV. P. 84; see also Two Men and a Truck Int’l, Inc.,
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`2015 WL 7573216, at *1 n. 8. As Defendants have not brought a Rule 12(b) motion prior to
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`pp. 4-5; see Dkt. #121 at pp. 4-5). “A negative defense is ‘one which tends to disprove one or all of the elements of
`a complaint.’” Think All Publ’g, LLC, 564 F. Supp. 2d at 665 (quoting Emmons v. S. Pac. Transp. Co., 701 F.2d
`1112, 1118 (5th Cir. 1983) (internal quotation marks and citation omitted)). “In other words, a negative defense is
`the equivalent of a defendant saying, ‘I did not do it.’” Id. Under Rule 12(f), negative defenses are redundant, and
`should be stricken so that they are not raised a second time as an affirmative defense. See Think All Publ’g, L.L.C.,
`564 F. Supp. 2d at 666. As the FTC does not point out which of the affirmative defenses, it claims are negative
`defenses, the Court will not make a determination on this issue.
`4 This affirmative defense is referenced as Norma Hart’s first affirmative defense (Dkt. #109 at pp. 8-9). As the
`defenses are identical, the Court will address them together.
`5 Defendants’ affirmative defense states as follows:
`Defendant McCrary denies she is responsible for acts not pled with specificity, and acts not
`discernible from the pleadings. She has been deprived of access to the particulars of some of the
`transactions, as the Receiver has delivered documents pertinent to this matter to a third party, and
`she has yet been disadvantaged by being, as a practical matter, deprived of the ordinary right to
`prepare and present a defense thus far. She cannot know the particulars of the charges leveled at
`her, or whether, on occasion, an employee/contractor of any of the corporate defendants, may have
`crossed a line. What she knows is that she tried to operate within the bounds of the law.
`(Dkt. #104 at p. 6). There are identical affirmative defenses for John Hart and Norma Hart (Dkt. #104 at p. 7; Dkt.
`#108 at p. 8).
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`7
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 8 of 12 PageID #: 3974
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`filing their answers, their defense is effectively waived. See Hill v. Hunt, No. 3:07-CV-2020-O,
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`2010 WL 54756, at *2 (N.D. Tex. Jan. 4, 2010) (“A defendant’s 12(b)(6) defenses is waived if
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`the defendant files an answer before presenting the defense.”). Therefore, the Court finds that
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`Defendants’ affirmative defense is not properly brought, it should be stricken. Therefore, the
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`FTC’s motion should be granted as to Defendants’ affirmative defense of failure to state a claim.
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`The FTC also asserts that the affirmative defenses allege lack of knowledge, and should
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`be stricken (Dkt. #108 at p. 6; Dkt. #121 at p. 6). Many courts have found knowledge is a
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`requirement to the FTC proving that an act is deceptive, as to the individual defendants. FTC v.
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`RCA Credit Servs., LLC, 727 F. Supp. 2d 1320, 1339 (M.D. Fla. 2010) (“Individuals may be held
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`personally liable for corporate FTC violations if the FTC shows that the individuals (1)
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`participated directly in the deceptive acts or practices or (2) had authority to control them and
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`had some knowledge of the practices.”) (emphasis added); Amy Travel Serv., Inc., 875 F.2d at
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`573 (In demonstrating individual liability, “[t]he FTC must…demonstrate that the individual has
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`some knowledge of the practices.”) (emphasis added); see FTCv. Ross, 897 F. Supp. 2d 369, 381
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`(D.Md. 2012); FTC v. Med. Billers Network, Inc., 543 F. Supp. 2d 283, 320 (S.D.N.Y. 2008).
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`Additionally, the FTC concedes that “[t]o obtain monetary relief, the [FTC] must show that an
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`individual Defendant ‘had actual knowledge of the deceptive conduct, was recklessly indifferent
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`to its deceptiveness, or had an awareness of a high probability of deceptiveness and intentionally
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`avoided learning the truth.’” (Dkt. #108 at pp. 5-6; Dkt. #121 at pp. 5-6) (quoting FTC v. Ross,
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`743 F.3d 886, 892-93 (4th Cir. 2014)). The Court finds that Defendants have provided fair
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`notice to the FTC as to the basis of their “lack of knowledge” affirmative defense; therefore, the
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`Court finds that the motion to strike should be denied.
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`8
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 9 of 12 PageID #: 3975
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`The FTC also asserts that the affirmative defenses allege good faith and should be
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`stricken “because the law is well established that good faith is not a valid defense to liability
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`under the FTC Act.” (Dkt. #108 at p. 7; Dkt. #121 at p. 7). However, the Court declines to
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`strike Defendants’ first and second affirmative defenses to the extent that they allege good faith.
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`The Fifth Circuit has not determined that good faith is a legally insufficient defense to liability
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`under the FTC Act. See FTC v. Verma Holdings, LLC, No. 4:13-cv-00594, 2013 WL 4506033,
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`at *5 (S.D. Tex. Aug. 22, 2013). Like the district court in Verma Holdings, LLC, the Court will
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`not make a determination of this issue with the limited briefing before it. As Defendants’
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`affirmative defenses provide fair notice to the FTC as to the basis of their good faith affirmative
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`defense, the Court finds that the motion to strike should be denied.
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`The FTC asserts that Defendants’ third, fourth, and fifth affirmative defenses6 are
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`“insufficient attempts to relitigate [the] Court’s Preliminary Injunction and Asset Freeze[.]” (Dkt.
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`#108 at p. 7; Dkt. #121 at p. 7). The FTC asserts that the allegations do not state an affirmative
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`defense, and should be stricken as insufficient, immaterial, and/or impertinent. (Dkt. #108 at p.
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`8; Dkt. #121 at p. 8). After reviewing the relevant pleadings, the Court finds Defendants’ third
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`fourth, and fifth affirmative defenses are attempts to relitigate the Preliminary Injunction and
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`Asset Freeze. As such, the Court finds that Defendants’ claims are not properly asserted as
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`affirmative defenses, and thus will strike those defenses.
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`The FTC also requests that the Court strike Defendants’ sixth affirmative defense7, which
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`states, “All Defendants assert the right to commercial free speech under the First Amendment to
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`the United States Constitution.” (Dkt. #104 at p. 8; Dkt. #109 at p. 9). The FTC contends that
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`6 These affirmative defenses are referenced as Norma Hart’s second, third, and fourth affirmative defense (Dkt. #109
`at p. 9). As the defenses are identical, the Court will address them together.
`7 This affirmative defense is referenced as Norma Hart’s fifth affirmative defense (Dkt. #109 at p. 9). As the
`defenses are identical, the Court will address them together.
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`9
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 10 of 12 PageID #: 3976
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`“[t]he States and the Federal Government are free to prevent the dissemination of commercial
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`speech that is false, deceptive, or misleading.” (Dkt. #108 at pp. 8-9; Dkt. #121 at pp. 8-9)
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`(quoting Zauderer v. Off. of Disciplinary Counsel, 471 U.S. 626, 638 (1985)). As no trier of fact
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`has found that Defendants’ practices are false or deceptive, “there may be some set of facts that
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`support the defendant’s claim that their actions are protected by the First Amendment.” Verma
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`Holdings, LLC, 2013 WL 4506033, at *7 (quoting Bronson Partners, LLC, 2006 WL 197357, at
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`*2 (citation omitted)). However, the Court agrees that Defendants’ have not pleaded any factual
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`allegations to support their affirmative defense; and therefore, do not provide sufficient notice of
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`how the relief sought by the FTC infringes on their First Amendment rights. The Court grants
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`Defendants leave to amend their sixth affirmative defense to comply with the Federal Rules of
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`Civil Procedure.
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`The FTC also requests that the Court strike Defendants’ seven affirmative defense8,
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`which states, “All Defendants assert the right to not being deprived of property rights without
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`due process of law under the Fifth Amendment to the United States Constitution.” (Dkt. #108 at
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`p. 9; Dkt. #121 at p. 9). Defendants assert that their Fifth Amendment affirmative defense
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`pertains to the TRO and the preliminary injunction in the present case (Dkt. #115 at p. 6). As
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`such, the Court finds that Defendants’ claim is not properly asserted as an affirmative defense,
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`and thus, will strike the defense.
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`The FTC also requests that the Court strike Defendants’ eighth affirmative defense9, their
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`“right to a jury trial.” (Dkt. #108 at p. 10; Dkt. #121 at p. 10). The Court has already addressed
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`8 This affirmative defense is referenced as Norma Hart’s sixth affirmative defense (Dkt. #109 at p. 9). As the
`defenses are identical, the Court will address them together.
`9 This affirmative defense is referenced as Norma Hart’s seventh affirmative defense (Dkt. #109 at p. 9). As the
`defenses are identical, the Court will address them together.
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`10
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 11 of 12 PageID #: 3977
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`the Defendants’ demand for a jury trial above, and the Court found it should be stricken.
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`Therefore, the Court will likewise strike Defendants’ eighth affirmative defense.
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`CONCLUSION
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`It is therefore ORDERED that Plaintiff Federal Trade Commission’s Motion to Strike
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`Defendants’ Jury Demand (Dkt. #82) is hereby GRANTED.
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`It is further ORDERED that Plaintiff Federal Trade Commission’s Motion to Strike
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`Defendants’ Affirmative Defenses (Dkt. #108) is hereby GRANTED IN PART AND DENIED
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`IN PART. Defendants’ affirmative defenses are struck, as to the following: (1) Defendants’
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`first affirmative defense, as to the extent that it pleads a failure to state a claim defense
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`(Defendants’ failure to plead with specificity, lack of knowledge, and good faith defense); (2)
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`Defendants’ second affirmative defense, as to the extent that it pleads a failure to state a claim
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`defense (Defendants’ failure to plead with specificity, lack of knowledge, and good faith
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`defense); (3) Defendants’ third affirmative defense (Defendants’ “have already suffered great
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`damage” defense); (4) Defendants’ fourth affirmative defense (FTC’s failure in duty of candor
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`and unfair advantage defense); (5) Defendants’ fifth affirmative defense (FTC has taken
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`untainted assets in violation of law defense); (6) Defendants’ seventh affirmative defense
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`(Defendants’ deprivation of property rights under Fifth Amendment defense); and (7)
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`Defendants’ eighth affirmative defense (jury demand).
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`It is further ORDERED that Plaintiff Federal Trade Commission’s Motion to Strike
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`Defendant Norma Hart’s Affirmative Defenses (Dkt. #121) is hereby GRANTED IN PART
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`AND DENIED IN PART. Defendant’s affirmative defenses are struck, as to the following: (1)
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`Defendant’s first affirmative defense, as to the extent that it pleads a failure to state a claim
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`defense (Defendant’s failure to state a claim with specificity, lack of knowledge, and good faith
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`Case 4:15-cv-00829-ALM Document 164 Filed 07/29/16 Page 12 of 12 PageID #: 3978
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`defense); (2) Defendant’s second affirmative defense (Defendant’s “have already suffered great
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`damage” defense); (3) Defendant’s third affirmative defense (FTC’s failure in duty of candor and
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`unfair advantage defense); (4) Defendant’s fourth affirmative defense (FTC has taken untainted
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`assets in violation of law defense); (5) Defendant’s sixth affirmative defense (Defendant’s
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`deprivation of property rights under Fifth Amendment defense); (6) Defendant’s seventh
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`affirmative defense (jury demand).
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`It is further ORDERED that Defendants may file an amended answer to address only the
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`following claims: (1) to delete the portions of the affirmative defenses that the Court did strike;
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`and (2) Defendants’ First Amendment defense, as laid out within the Court’s Order. Defendants
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`must file any amended answer by no later than 14 days of this Order, if they desire to pursue
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`these affirmative defenses. No other new allegations may be alleged within their amended
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`answers without leave of Court.
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