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4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 FEDERAL TRADE COMMISSION, CASE NO. 2:23-cv-00932-JHC 8
ORDER 9 Plaintiff, 10 v. 11 AMAZON.COM, INC; NEIL LINDSAY, individually and as an officer of 12 Amazon.com, Inc.; RUSSELL GRANDINETTI, individually and as an 13 officer of Amazon.com, Inc.; JAMIL GHANI, individually and as an officer of 14 Amazon.com, Inc.,
15 Defendants. 16
17 I 18 INTRODUCTION 19 This matter comes before the Court on Defendants’ Motion to Compel Production of 20 FTC Communications and Internal Documents. Dkt. # 146. The Court has considered: the 21 materials filed in support of, and in opposition to, the motion; pertinent portions of the record; 22 and the applicable law. Being fully advised, the Court DENIES the motion. 23 24 1 II BACKGROUND 2 The FTC brought this case against Amazon and three Amazon executives, alleging that 3 certain Amazon Prime sign up and cancellation methods violated Section 4 of the Restore Online 4 Shoppers’ Confidence Act (ROSCA), 15 U.S.C. § 8403, and Section 5(a) of the Federal Trade 5 Commission Act (FTC Act), 15 U.S.C. § 45(a). During discovery, the FTC declined to produce 6 certain internal documents as not relevant and privileged. Dkt. # 147 at 2. Defendants seek four 7 categories of documents: 8 9 (1) “Internal FTC documents reflecting the FTC’s interpretation over time of ROSCA, 10 negative options, and ‘dark patterns.’” Dkt. # 146 at 6. 11 (2) “Documents post-dating June 21, 2023 (the date the FTC filed its complaint) that 12 relate to the FTC’s ongoing negative option rulemaking.” Id. (citing 88 Fed. Reg. 24716). 13 (3) “Documents relating to the FTC’s 2009 report titled, ‘Negative Options – A Report 14 by the staff of the FTC’s Division of Enforcement’ and the related workshop discussed in the 15 report.” Id. 16 17 (4) “Documents in the custody of the FTC’s Office of Public Affairs (‘OPA’), including 18 documents relating to the FTC’s press releases about this litigation.” Id. 19 In the negotiations leading up to the motion, the FTC agreed to produce “all non- 20 privileged documents relating to the FTC’s investigation; final versions of FTC guidance, 21 publications, policy statements, and workshops related to dark patterns, negative options, or 22 ROSCA; and any non-privileged FTC ‘internal guidelines or policies for enforcing or 23 prosecuting the use of Dark Patterns or violations of ROSCA or any rule concerning Negative 24 1 Options.’” Dkt. # 148 at 5 (citing Dkt. #147-2 at 6). Also, the FTC has produced “non- 2 privileged communications between the FTC and third parties and non-privileged FTC internal 3 documents concerning any final decision as to what guidance FTC staff may provide third
4 parties.” Id. at 6 (citing Dkt. #147-4 at 6–7). The FTC declined to search for or produce the 5 remaining documents. Dkt. # 147-4 at 8. Defendants now seek to compel production of these 6 documents. Dkt. # 146 at 5. Defendants say that these documents are relevant to their defenses 7 that: 8 • ROSCA is a narrow statute that does not prohibit the legitimate marketing practices described in the FTC’s Complaint (Dkt. 84 at 9; Dkt. 83 at 11- 9 12);
10 • The Prime flows do not violate ROSCA (Dkt. 84 at 13-27);
11 • The FTC’s “dark patterns” allegations are unconstitutionally vague (Dkt. 84 at 28-31); 12
• The FTC has not provided “fair notice” of the novel statutory 13 interpretations it is attempting to enforce in this case (Dkt. 84 at 31-34; Dkt. 83 at 18-21); and 14
• Civil penalties are unavailable because Defendants lacked “actual 15 knowledge” of illegality (Dkt. 84 at 34-35; Dkt. 83 at 21-24).
16 Dkt. # 146 at 6. After the parties submitting briefing on the motion to compel, the Court 17 addressed these defenses in its Order denying Defendants’ Motions to Dismiss. Dkt. # 165. 18 III 19 LEGAL STANDARDS 20 Federal Rule of Civil Procedure 26 governs discovery. “Parties may obtain discovery 21 regarding any nonprivileged matter that is relevant to any party’s claim or defense.” Fed. R. Civ. 22 P. 26 (b)(1). Evidence is relevant if “it has any tendency to make a fact more or less probable 23 than it would be without the evidence, and the fact is of consequence in determining the action.” 24 Fed. R. Evid. 401. “The relevance standard is commonly recognized as one that is necessarily 1 broad in scope in order ‘to encompass any matter that bears on, or that reasonably could lead to 2 other matter that could bear on, any issue that is or may be in the case.’” Doherty v. Comenity 3 Cap. Bank & Comenity Bank, No. 16CV1321-H-BGS, 2017 WL 1885677, at *2 (S.D. Cal. May
4 9, 2017) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)). 5 “The court has broad discretion in determining relevancy for discovery purposes.” Doe 6 v. Trump, 329 F.R.D. 262, 270 (W.D. Wash. 2018) (citing Surfvivor Media, Inc. v. Survivor 7 Prods., 406 F.3d 625, 635 (9th Cir. 2005)). The party who seeks to compel discovery bears the 8 burden of establishing relevance. Mi Familia Vota v. Hobbs, 343 F.R.D. 71, 81 (D. Ariz. 2022); 9 Doe, 329 F.R.D. at 270–71. A “minimal showing” is required to demonstrate relevance. O. L. v. 10 City of El Monte, No. 220CV00797RGKJDE, 2021 WL 926392, at *2 (C.D. Cal. Feb. 1, 2021). 11 IV DISCUSSION 12 A. Internal FTC Documents that Reflect the Agency’s Interpretation of ROSCA 13 14 As to documents related to the FTC’s internal discussions regarding its interpretation of 15 ROSCA, the FTC objects on the grounds of relevance, attorney-client privilege, and deliberative 16 process privilege. Dkt. # 148 at 7. 17 Defendants say that the documents are relevant to its defenses for three reasons. Dkt. # 18 146 at 9. First, they say that the FTC’s internal discussions about ROSCA “illuminate the 19 standards alleged to have been violated.” Id. Second, they say that the documents are relevant to 20 the “actual knowledge” of illegality standard required for civil penalties; and thus that they “are 21 [] entitled to discovery of documents indicating that there is ‘more than one reasonable 22 interpretation’ of ROSCA’s requirements.” Id. And third, they say that the documents are 23 relevant to their “fair notice” defense, which “requires an objective inquiry that turns on whether 24 a ‘person of ordinary intelligence’ would know what the law prohibits.” Id. (quoting United 1 States v. AMC Ent., Inc., 549 F.3d 760, 768 (9th Cir. 2008)). Defendants contend that 2 “documents reflecting uncertainty about what ROSCA means (or differing interpretations of 3 ROSCA) within the FTC—the very agency charged with enforcing the statute” are relevant to
4 this defense. Id. (emphasis in original). 5 1. Interpretation of ROSCA 6 Defendants say that the FTC’s internal discussions about ROSCA are relevant to 7 “illuminate the standards alleged to have been violated.” Dkt. # 146 at 9. The FTC responds 8 that internal agency discussions of the agency’s interpretation of a statute “are irrelevant to 9 questions of statutory interpretation.” Dkt. # 148 at 8. The Court agrees with the FTC. The 10 FTC’s internal discussions about the meaning of ROSCA are not relevant to whether ROSCA 11 proscribes Defendants’ conduct. Cf.
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4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 FEDERAL TRADE COMMISSION, CASE NO. 2:23-cv-00932-JHC 8
ORDER 9 Plaintiff, 10 v. 11 AMAZON.COM, INC; NEIL LINDSAY, individually and as an officer of 12 Amazon.com, Inc.; RUSSELL GRANDINETTI, individually and as an 13 officer of Amazon.com, Inc.; JAMIL GHANI, individually and as an officer of 14 Amazon.com, Inc.,
15 Defendants. 16
17 I 18 INTRODUCTION 19 This matter comes before the Court on Defendants’ Motion to Compel Production of 20 FTC Communications and Internal Documents. Dkt. # 146. The Court has considered: the 21 materials filed in support of, and in opposition to, the motion; pertinent portions of the record; 22 and the applicable law. Being fully advised, the Court DENIES the motion. 23 24 1 II BACKGROUND 2 The FTC brought this case against Amazon and three Amazon executives, alleging that 3 certain Amazon Prime sign up and cancellation methods violated Section 4 of the Restore Online 4 Shoppers’ Confidence Act (ROSCA), 15 U.S.C. § 8403, and Section 5(a) of the Federal Trade 5 Commission Act (FTC Act), 15 U.S.C. § 45(a). During discovery, the FTC declined to produce 6 certain internal documents as not relevant and privileged. Dkt. # 147 at 2. Defendants seek four 7 categories of documents: 8 9 (1) “Internal FTC documents reflecting the FTC’s interpretation over time of ROSCA, 10 negative options, and ‘dark patterns.’” Dkt. # 146 at 6. 11 (2) “Documents post-dating June 21, 2023 (the date the FTC filed its complaint) that 12 relate to the FTC’s ongoing negative option rulemaking.” Id. (citing 88 Fed. Reg. 24716). 13 (3) “Documents relating to the FTC’s 2009 report titled, ‘Negative Options – A Report 14 by the staff of the FTC’s Division of Enforcement’ and the related workshop discussed in the 15 report.” Id. 16 17 (4) “Documents in the custody of the FTC’s Office of Public Affairs (‘OPA’), including 18 documents relating to the FTC’s press releases about this litigation.” Id. 19 In the negotiations leading up to the motion, the FTC agreed to produce “all non- 20 privileged documents relating to the FTC’s investigation; final versions of FTC guidance, 21 publications, policy statements, and workshops related to dark patterns, negative options, or 22 ROSCA; and any non-privileged FTC ‘internal guidelines or policies for enforcing or 23 prosecuting the use of Dark Patterns or violations of ROSCA or any rule concerning Negative 24 1 Options.’” Dkt. # 148 at 5 (citing Dkt. #147-2 at 6). Also, the FTC has produced “non- 2 privileged communications between the FTC and third parties and non-privileged FTC internal 3 documents concerning any final decision as to what guidance FTC staff may provide third
4 parties.” Id. at 6 (citing Dkt. #147-4 at 6–7). The FTC declined to search for or produce the 5 remaining documents. Dkt. # 147-4 at 8. Defendants now seek to compel production of these 6 documents. Dkt. # 146 at 5. Defendants say that these documents are relevant to their defenses 7 that: 8 • ROSCA is a narrow statute that does not prohibit the legitimate marketing practices described in the FTC’s Complaint (Dkt. 84 at 9; Dkt. 83 at 11- 9 12);
10 • The Prime flows do not violate ROSCA (Dkt. 84 at 13-27);
11 • The FTC’s “dark patterns” allegations are unconstitutionally vague (Dkt. 84 at 28-31); 12
• The FTC has not provided “fair notice” of the novel statutory 13 interpretations it is attempting to enforce in this case (Dkt. 84 at 31-34; Dkt. 83 at 18-21); and 14
• Civil penalties are unavailable because Defendants lacked “actual 15 knowledge” of illegality (Dkt. 84 at 34-35; Dkt. 83 at 21-24).
16 Dkt. # 146 at 6. After the parties submitting briefing on the motion to compel, the Court 17 addressed these defenses in its Order denying Defendants’ Motions to Dismiss. Dkt. # 165. 18 III 19 LEGAL STANDARDS 20 Federal Rule of Civil Procedure 26 governs discovery. “Parties may obtain discovery 21 regarding any nonprivileged matter that is relevant to any party’s claim or defense.” Fed. R. Civ. 22 P. 26 (b)(1). Evidence is relevant if “it has any tendency to make a fact more or less probable 23 than it would be without the evidence, and the fact is of consequence in determining the action.” 24 Fed. R. Evid. 401. “The relevance standard is commonly recognized as one that is necessarily 1 broad in scope in order ‘to encompass any matter that bears on, or that reasonably could lead to 2 other matter that could bear on, any issue that is or may be in the case.’” Doherty v. Comenity 3 Cap. Bank & Comenity Bank, No. 16CV1321-H-BGS, 2017 WL 1885677, at *2 (S.D. Cal. May
4 9, 2017) (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978)). 5 “The court has broad discretion in determining relevancy for discovery purposes.” Doe 6 v. Trump, 329 F.R.D. 262, 270 (W.D. Wash. 2018) (citing Surfvivor Media, Inc. v. Survivor 7 Prods., 406 F.3d 625, 635 (9th Cir. 2005)). The party who seeks to compel discovery bears the 8 burden of establishing relevance. Mi Familia Vota v. Hobbs, 343 F.R.D. 71, 81 (D. Ariz. 2022); 9 Doe, 329 F.R.D. at 270–71. A “minimal showing” is required to demonstrate relevance. O. L. v. 10 City of El Monte, No. 220CV00797RGKJDE, 2021 WL 926392, at *2 (C.D. Cal. Feb. 1, 2021). 11 IV DISCUSSION 12 A. Internal FTC Documents that Reflect the Agency’s Interpretation of ROSCA 13 14 As to documents related to the FTC’s internal discussions regarding its interpretation of 15 ROSCA, the FTC objects on the grounds of relevance, attorney-client privilege, and deliberative 16 process privilege. Dkt. # 148 at 7. 17 Defendants say that the documents are relevant to its defenses for three reasons. Dkt. # 18 146 at 9. First, they say that the FTC’s internal discussions about ROSCA “illuminate the 19 standards alleged to have been violated.” Id. Second, they say that the documents are relevant to 20 the “actual knowledge” of illegality standard required for civil penalties; and thus that they “are 21 [] entitled to discovery of documents indicating that there is ‘more than one reasonable 22 interpretation’ of ROSCA’s requirements.” Id. And third, they say that the documents are 23 relevant to their “fair notice” defense, which “requires an objective inquiry that turns on whether 24 a ‘person of ordinary intelligence’ would know what the law prohibits.” Id. (quoting United 1 States v. AMC Ent., Inc., 549 F.3d 760, 768 (9th Cir. 2008)). Defendants contend that 2 “documents reflecting uncertainty about what ROSCA means (or differing interpretations of 3 ROSCA) within the FTC—the very agency charged with enforcing the statute” are relevant to
4 this defense. Id. (emphasis in original). 5 1. Interpretation of ROSCA 6 Defendants say that the FTC’s internal discussions about ROSCA are relevant to 7 “illuminate the standards alleged to have been violated.” Dkt. # 146 at 9. The FTC responds 8 that internal agency discussions of the agency’s interpretation of a statute “are irrelevant to 9 questions of statutory interpretation.” Dkt. # 148 at 8. The Court agrees with the FTC. The 10 FTC’s internal discussions about the meaning of ROSCA are not relevant to whether ROSCA 11 proscribes Defendants’ conduct. Cf. United States v. Farley, 11 F.3d 1385, 1390 (7th Cir. 1993) 12 (“[t]he suppositions of FTC staff members expressed in internal memoranda as to requirements
13 of the [Hart-Scott-Rodino Antitrust Improvement] Act are not pertinent to” determining whether 14 Defendant’s action fell within an exception in the HSR Act, thus were not relevant). 15 Defendants argue that they “do not seek these documents for ‘statutory interpretation,’” 16 and instead “the documents are relevant to [(1)] contradict the FTC’s litigation theories and [(2)] 17 show its claims are predicated on not-yet-promulgated standards that appear nowhere in 18 ROSCA’s text.” Dkt. # 150 at 2. 19 Parties are entitled to obtain information in discovery that “will impeach or contradict an 20 opponent’s case.” Jones v. Hawley, 255 F.R.D. 51, 52 (D.D.C. 2009); see also In re Packaged 21 Seafood Prod. Antitrust Litig., No. 15-MD-2670 JLS (MDD), 2018 WL 4327876, at *3 (S.D. 22 Cal. Sept. 10, 2018) (“Defendants contend that discovery is relevant because it contradicts one of 23 Plaintiffs’ theories: whether a jury should infer collusion based on innocuous competitor 24 1 communications. This is not an attention-shifting defense; rather, it seeks to counter Plaintiffs’ 2 theory of the case.”). But the theory of the case that Defendants wish to “impeach or contradict” 3 is the FTC’s interpretation of ROSCA in this litigation. The Court interprets the statute using the
4 tools of statutory construction. Internal agency interpretations of a statute “have no legal 5 significance because they [are not] official agency positions”; if they were relevant, “these 6 predecisional communications would possess de-facto official status.” Consumer Fin. 7 Protection Bureau v. Navient Corp., No. 3:17-CV-101, 2018 WL 2088760, at *4 (M.D. Pa. May 8 4, 2018). 9 Second, to the extent that Defendants wish to argue that the internal discussions “are 10 relevant to show the FTC manufactured a legal standard here that does not exist in the law,” Dkt. 11 # 150 at 2, “[t]his defense requires only that the district court interpret” ROSCA to determine 12 whether the legal standards that the FTC argues apply are cognizable under the statute, Farley,
13 11 F.3d at 1390. Thus, internal FTC documents about the meaning of ROSCA are not relevant. 14 2. “Actual knowledge” 15 Defendants say that the FTC’s internal discussions about ROSCA are relevant to their 16 argument that civil penalties are not appropriate because they did not have “actual knowledge.” 17 Dkt. # 146 at 9. They say that they “are thus entitled to discovery of documents indicating that 18 there is ‘more than one reasonable interpretation’ of ROSCA’s requirements.” Id. (quoting Sec. 19 & Exch. Comm’n v. Lent, No. C-04-4088 CW (EMC), 2006 WL 8434734, at *4 (N.D. Cal. Jan. 20 12, 2006)). The FTC responds that “internal FTC discussions, to which neither Defendants nor 21 any members of the public were privy, have no possible bearing on Defendants’ knowledge (or 22 knowledge fairly implied) of their ROSCA violations.” Dkt. # 148 at 12 (citing United States v. 23 Wisconsin Bell, Inc., No. 08-C-0724, 2020 WL 13048895, at *2 (E.D. Wis. Oct. 29, 2020) 24 1 (“[w]hether [defendant’s] interpretation of the [law] was reasonable depends on the statutes, 2 regulations, and the official, public statements regarding the rule,” not on “[i]nternal and 3 interagency communications”)).
4 The FTC may seek civil penalties against any person or corporation who violated 5 ROSCA “with actual knowledge or knowledge fairly implied on the basis of objective 6 circumstances that such act is unfair or deceptive and is prohibited by such rule.” 15 U.S.C. § 7 45(m)(1)(A). In its Order Denying Defendants’ Motions to Dismiss, the Court said that a 8 defendant violates ROSCA with actual knowledge or knowledge fairly implied “where a 9 reasonable person under the circumstances would have known of the existence of the provision 10 and that the action charged violated that provision.” Dkt. # 165 at 446 (quoting United States v. 11 Nat’l Fin. Servs., Inc., 98 F.3d 131, 139 (4th Cir. 1996)). 12 Defendants point out that district courts are divided on whether internal agency 13 documents are relevant to the reasonable person standard. See Dkt. # 150 at 4. Some district 14 courts in the Ninth Circuit have determined that internal agency communications are relevant to 15 the reasonableness of a person’s interpretation of a statute or regulation. See Lent, 2006 WL 16 8434734, at *4; United States ex rel. Poehling v. UnitedHealth Grp., Inc., No. CV 16-8697 17 MWF (SSX), 2018 WL 8459926, at *11 (C.D. Cal. Dec. 14, 2018). 18 But in Lent, which is easily distinguishable, the defendants sought internal agency 19 communications to show that they were “affirmatively mislead” by the agency. 2006 WL 20 8434734, at *4. The court determined that the documents were relevant because “[w]hether 21 these assurances were in fact given by [agency employees] may be informed by the [agency’s] 22 position at or about the time of these alleged representations.” Id. 23 24 1 In Poehling, the court determined that “any documents showing that [the agency’s] 2 interpretations of ‘applicable statutes, regulations, guidance documents and contractual 3 requirements’ mirrored” defendant’s interpretation were relevant because they “would ‘bear
4 directly on the objective reasonableness of [defendant’s] interpretations.’” 2018 WL 8459926, at 5 *11. But the court provided no additional reasoning as to the why internal agency documents 6 were relevant. Id. at *2. Thus, the Court does not find Poehling persuasive. 7 On the other hand, in Wisconsin Bell, Inc., the defendant sought to compel production of 8 internal documents from the Federal Communications Commission (FCC) and the Universal 9 Service Administration Company (USAC) about the meaning of certain regulatory terms. 2020 10 WL 13048895, at *1. The defendant argued that those documents were relevant because the 11 agencies had not defined the operative terms of the regulation that the defendant had allegedly 12 violated, and internal documents would “be relevant to whether Wisconsin Bell knowingly
13 violated the requirement.” Id. The court denied the motion to compel, reasoning that “[i]nternal 14 agency communications and internal agency interpretations of a rule cannot be relevant to 15 whether the defendant knowingly violated the rule unless the defendant was aware of those 16 internal communications and interpretations at the time the rule was violated.” Id. at *2 17 (“Whether Wisconsin Bell’s interpretation of the LCP rule was reasonable depends on the 18 statutes, regulations, and the official, public statements regarding the rule.”). 19 The Court finds the reasoning in Wisconsin Bell persuasive. Defendants seek “[i]nternal 20 FTC documents reflecting the FTC’s interpretation over time of ROSCA, negative options, and 21 ‘dark patterns’” to show that Defendants’ interpretation of ROSCA was objectively reasonable. 22 Dkt. # 146 at 6. The FTC has already agreed to produce all documents communicating its 23 interpretations to third parties. Dkt. # 147-4 at 6–8. But the FTC’s internal interpretations of 24 1 ROSCA, negative options, and dark patterns over time has no bearing on the objective 2 reasonableness of Defendants’ interpretation of ROSCA. Thus, these documents are not 3 relevant.
4 3. “Fair notice” defense 5 Defendants say that the FTC’s internal discussions about ROSCA are relevant to their 6 “fair notice” defense. Dkt. # 146 at 9. They say that this “defense requires an objective inquiry 7 that turns on whether a ‘person of ordinary intelligence’ would know what the law prohibits.” 8 Dkt. # 146 at 9 (quoting AMC Ent., 549 F.3d at 768). 9 The Court rejected Defendants’ fair notice argument in its Order Denying Defendants’ 10 Motions to Dismiss. Dkt. # 165 at 43–44. The Court reasoned that the FTC’s “‘dark pattern’ 11 theory of ROSCA” used in this litigation does not violate Defendant’s due process right to fair 12 notice of an agency’s interpretation of ROSCA because such “[f]air notice concerns arise when 13 an agency explicitly changes its official interpretation of a statute and a regulated party relied on 14 the prior interpretation,” Dkt. # 165 at 42. And Defendants did not point to a prior public 15 interpretation of ROSCA by the FTC. Id. at 43. 16 17 Further, while laws that impose civil penalties must “provide a person of ordinary 18 intelligence fair notice of what is prohibited,” F.C.C. v. Fox Television Stations, Inc., 567 U.S. 19 239, 253 (2012), “regulated parties have no access to an agency’s internal deliberations; thus, 20 these communications should have no bearing upon whether the agency has given fair notice,” 21 Exxon Mobil Corp. v. Mnuchin, 430 F. Supp. 3d 220, 235 (N.D. Tex. 2019); see also United 22 States v. Weitzenhoff, 35 F.3d 1275, 1289 (9th Cir. 1993) (“A defendant is deemed to have fair 23 notice of an offense if a reasonable person of ordinary intelligence would understand that his or 24 her conduct is prohibited by the law in question.” (internal citation omitted)). As this order 1 discusses in Section IVA.2., internal agency interpretations are not relevant to the “reasonable 2 person” standard required for civil penalties. That same logic applies here and the Court 3 concludes that internal agency interpretations are also not relevant to whether a “person of
4 ordinary intelligence,” or “a reasonable person of ordinary intelligence,” would have fair notice 5 of what ROSCA prohibits.1 6 B. Documents Related to the FTC’s Ongoing Negative Option Rulemaking 7 The FTC produced “non-privileged documents relating to third-party communications 8 regarding the Negative Option Rulemaking (including consumer comments submitted to the 9 FTC) dated January 1, 2013 to June 21, 2023.” Dkt. # 148 at 15. The FTC maintains that these 10 documents are not relevant even though it produced them. Id. Defendants seek to compel 11 production of documents that post-date the FTC’s filing of this lawsuit—June 21, 2023—related 12 to the FTC’s ongoing Negative Option Rulemaking. Dkt. # 146 at 11–12. 13 14 Defendants assert that these recent documents are relevant to show that “the current law 15 ‘does not provide clarity.’” Dkt. # 146 at 11. Defendants say, “When an agency ‘has gone out 16 of its way to specifically include [the disputed conduct] within its regulatory purview,’ that is 17 particularly ‘revealing’ evidence that prior law failed to provide adequate notice.” Dkt. # 150 at 18 4 (quoting United States v. Moss, 872 F.3d 304, 314 (5th Cir. 2017)). In Moss, the Department 19 of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) criminally charged 20 contractors and subcontractors of an offshore oil platform for violating the Outer Continental 21 Shelf Lands Act (OCSLA) after a fatal accident in the Gulf of Mexico. 872 F.3d at 305. At the 22 time, contractors and subcontractors of offshore oil platforms had never been criminally charged 23
1 Because these documents are not relevant, the Court need not address the FTC’s arguments that 24 attorney-client privilege and deliberative process privilege apply. See Dkt. # 148 at 13. 1 under OCSLA, which was enacted in 1953, and defendants argued that they did not have fair 2 notice that their conduct was subject to criminal penalties. Id. at 314. In determining that the 3 contractors and subcontractors did not have fair notice, the court found it relevant that, after
4 charging the defendants, BSEE promulgated regulations that “specifically include contractors 5 and subcontractors within the regulatory purview.” Id. 6 But Moss involved criminal penalties, not civil. 872 F.3d at 315. The requirements of 7 due process are less exacting in civil cases, and “standards are especially lax for civil statutes 8 that regulate economic activities.” FTC. v. Wyndham Worldwide Corp., 799 F.3d 236, 250 (3d 9 Cir. 2015); FTC v. Kochava Inc., 671 F. Supp. 3d 1161, 1177 (D. Idaho 2023) (“[T]he standard 10 for fair notice is especially low in cases, like this one, involving civil statutes regulating 11 economic activities.’”).2 Further, Moss is distinguishable because “the agency explicitly 12 disclaimed imposing direct regulatory control on” contractors and subcontractors and later 13 changed its position. 872 F.3d at 315. Here, in rejecting Defendants’ fair notice argument, the 14 Court noted that the FTC has not changed its public position because there are no “regulations or 15 policy statements that reflect an official, prior interpretation of ROSCA.” Dkt. # 165 at 43. 16 Thus, Moss does not support Defendants’ argument that the agency’s later rulemaking, which is 17 not at issue in this case, is relevant to its defense that the FTC’s civil enforcement of ROSCA 18 violates Defendants’ right to due process. 19 20 21 2 Defendants also cite Exxon Mobil Corp. v. Mnuchin, in which the court determined that an 22 agency’s decision to later clarify a regulation “lends ‘at least some support’ to the Court’s conclusion that the Regulations’ text fails to provide ascertainable certainty.” 430 F. Supp. 3d at 233. But the “ascertainable certainty” standard does not apply here; courts in the Fifth Circuit rely on this standard in 23 determining whether to give Auer deference to an agency’s interpretation of its own regulation. See Emp. Sols. Staffing Grp. II, L.L.C. v. Off. of Chief Admin. Hearing Officer, 833 F.3d 480, 490 (5th Cir. 2016). 24 The FTC does not argue that the Court should afford any deference to its interpretation of ROSCA. 1 Defendants also say that “documents about the FTC’s ongoing rulemaking and proposed 2 final rule are relevant because they will show that the standards the FTC is attempting to 3 preemptively apply in this case did not exist during the Complaint’s relevant period and are only
4 now being promulgated.” Dkt. # 146 at 13. But as discussed above in Section A.1., the FTC’s 5 interpretation of ROSCA is irrelevant to the Court’s interpretation of the statute. 6 C. Documents Related to 2009 Report and 2007 Workshop 7 Defendants seek to compel production of “all documents relating to the 2009 Negative 8 Options Report (the ‘Report’) and the 2007 Workshop cited therein (the ‘Workshop’).” Dkt. # 9 146 at 14. The FTC says that these documents are not relevant because the “materials predate 10 ROSCA (a 2010 statute) and the conduct at issue in this litigation.” Dkt. # 148 at 16. But the 11 FTC stated that it “has no objection to providing copies of the Workshop recording and 12 transcript” and that the 2009 Report is publicly available. Dkt. # 148 at 17. Thus, the Court 13 need not address whether these materials are relevant. 14 15 As to other documents related to the Report and Workshop, Defendants say that the 16 documents are relevant “[b]ecause the Report and Workshop provide background for 17 understanding the primary statute at issue.” Dkt. # 146 at 14. Defendants cite no case—nor is 18 the Court aware of any—in which a court determined that internal agency documents that pre- 19 date the enactment of a statute are relevant to “understand” the statute at issue. Thus, Defendants 20 do not meet their burden of showing that other documents related to the Report and the 21 Workshop are relevant. 22
24 1 D. OPA Documents 2 Defendants seek to compel production of documents from the FTC’s OPA, “including 3 documents and communications that relate to press releases concerning this case.” Dkt. # 146 at
4 15. Defendants say that these documents are relevant because “OPA was involved in drafting 5 press statements characterizing this action as a ‘challenge to alleged digital dark patterns,’ a 6 position which the FTC has now attempted to disclaim.” Id. at 15–16. But such materials are 7 not relevant to whether Prime sign up and cancellation processes violate ROSCA. As the Court 8 noted in its Order Denying Defendants’ Motions to Dismiss, “Amazon characterizes the FTC’s 9 use of the term ‘dark patterns’ as the announcement of a new strategy for enforcing ROSCA.” 10 Dkt. # 165 at 44 n.9. But, the Court said, the question of whether ROSCA prohibits the practices 11 that the FTC calls “dark patterns” has nothing to do with how the FTC labels these practices. Id. 12 Thus, the FTC’s litigation strategy is not relevant to Defendants’ defenses that ROSCA “does not
13 prohibit [Amazon’s] legitimate marketing practices” and that “[t]he Prime flows do not violate 14 ROSCA.” Dkt. # 146 at 6. 15 Defendants also say that “the press releases demonstrate ongoing shifts in the FTC’s 16 interpretations, [so] discovery of documents relating to the press releases are squarely relevant to 17 Defendants’ fair notice defenses.” Id. at 15–16. But they cite a case that is inapt. See id. at 16 18 (citing Nw. Immigrant Rts. Project v. Sessions, No. C17-716 RAJ, 2017 WL 3189032, at *5 19 (W.D. Wash. July 27, 2017) (determining that a regulation was “impermissibly vague” because it 20 “created a moving target” that restricted speech)). In the Court’s Order Denying Defendants’ 21 Motions to Dismiss, the Court rejected Defendants’ argument that the FTC’s “dark patterns” 22 theory of its case is unconstitutionally vague because Defendants do not argue that the statute is 23 unconstitutionally vague. Dkt. # 165 at 41 (“Defendants offer no legal authority, and the Court 24 l cannot find any, to support their assertion that the vagueness doctrine applies to an agency’s 2 litigation strategy. Thus, the Court concludes that the vagueness doctrine does not apply here.”’). 3 The Court also rejected Defendants’ focus on the FTC’s changing litigation strategy as a basis 4 for their fair notice theory, reasoning that, when there is no prior agency interpretation of a 5 statute “[t]he relevant question is not whether [Defendants] had fair notice of the FTC’s 6 interpretation of the statute, but whether [Defendants] had fair notice of what the statute itself 7 ||requires.” Dkt. # 165 at 43 (quoting Wyndham, 799 F.3d at 253-54 (emphasis in original)). The 8 FTC’s press releases about this litigation and related documents are not relevant to whether g ROSCA “fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is 10 so standardless that it authorizes or encourages seriously discriminatory enforcement.” Fox 11 Television Stations, 567 U.S. at 253. IV 13 CONCLUSION 14 For the reasons above, the Court DENIES Defendants’ motion to compel. 15 Dated this 22nd day of August, 2024. 16 Cc]. oh 4 Chur John H. Chun 17 United States District Judge 18 19 20 21 22 23 24