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1
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Government Exhibit # 1ST AMENDED COMPLAINT
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EXTRACTED KEY WORDS
FINANCIAL INSTITUTION FTC ACT DEFENDANT CUSTOMER GLB ACT VIOLATIONS PRACTICES COMMISSION REPRESENTATIVES RELIEF CONSUMERS BUSINESS PLAINTIFF TRADE COMMISSION ENFORCE FEDERAL TRADE COMMISSION DISTRICT UNFAIR DECEPTIVE ACTS COURT FRAUDULENT TEXAS WEB SITE BANK ACCOUNT FRAUDULENT STATEMENT OFFICERS OBTAINING FDCP ACT INJURY |
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
)
FEDERAL TRADE COMMISSION, )
)
Plaintiff, ))
v. )
)
PAULA L. GARRETT, )
d/b/a Discreet Data Systems, ))
Defendant. )
)
)
FIRST AMENDED COMPLAINT FOR INJUNCTIVE
AND OTHER EQUITABLE RELIEF
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), by its undersigned
attorneys, alleges as follows:
1. The Commission brings this action under Sections 5(a) and 13(b) of the
Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a) and 53(b), and Section 522(a) of the
Gramm-Leach-Bliley Act ("GLB Act"), 15 U.S.C. § 6822(a), to secure preliminary and
permanent injunctive relief, rescission of contracts, restitution, redress, disgorgement, and other
equitable relief for defendant's violations of Section 521 of the GLB Act, 15 U.S.C. § 6821, and
Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
-1-
JURISDICTION AND VENUE
2. Jurisdiction is based on 28 U.S.C. §§ 1331, 1337(a), 1345, and 1355, and on 15
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2
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STATEMENT OF COMMISSIONER SWINDLE
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EXTRACTED KEY WORDS
COMMISSIONER TONE INFORMATION SYSTEMS REASON VIOLATE DEFENDANTS STANDARD TOUCH TONE FTC ACT CONSUMERS REPRESENTATION PRACTICE CLIFFDALE DISSENTING STATEMENT COMMISSIONER ORSON SWINDLE COMPLAINTS PRETEXTING SUBSTANTIAL INJURY IDENTITY THEFT CIR CERT MATTER DATA SYSTEMS PROPOSED DEFENDANTS BINDING UNFAIRNESS REGARDLESS OMISSION MISLEAD |
DISSENTING STATEMENT OF COMMISSIONER ORSON SWINDLE
In the Matters of
Information Search, Inc. and David Kacala, File No. 0123083;
Victor L. Guzzetta d/b/a Smart Data Systems, File No. 0123066;
Paula L. Garrett d/b/a/ Discreet Data Systems, File No. 0123067
I reluctantly have voted against the filing of these three Section
13(b) complaints for several reasons. First, I do not have reason to
believe that the proposed defendants have violated the Commission's
binding deception standard adopted in the Deception Statement.(1) As I
explained in my dissents from the complaint and settlement in Touch
Tone Information Systems, Inc., I would have preferred to have
proceeded administratively so that the Commission could address in the
first instance whether pretexting is deceptive under Section 5.(2)
Second, I do not have reason to believe that the proposed defendants
have violated the unfairness standard established by Congress in
Section 5(n) of the FTC Act. As in Touch Tone, there is an
insufficient basis to allege that the defendants' actions have caused
or are likely to cause "substantial injury" to consumers. Merely
positing that privacy is a property right and that depriving consumers
of a property right is substantial injury would read the word
"substantial" right out of the statute: all misappropriation or theft
of any property would become "unfair," regardless of the amount of
economic harm or whether the loss posed a threat to health or safety.
Similarly, merely asserting that the kind of information that can be
obtained through pretexting is information that can be used to
facilitate identity theft does not lead to the conclusion that
pretexting causes or is likely to cause identity theft.
Third, although I believe that the defendants either have violated or
likely will attempt to violate Section 521 of the Gramm-Leach-Bliley
Act, I do not believe there is sufficient support at the present time
to make all the allegations in Count One of the complaints. In
particular, I am not comfortable alleging that false representations
to persons "believed to be" representatives of financial institutions
violate the GLB Act. Finally, based on the information currently
available, I do not think we should be seeking an ex parte asset
freeze in any of these cases.
_________________________________________________________________
The Deception Statement sets forth three elements that "undergird all
deception cases":
First, there must be a representation, omission or practice that is
likely to mislead the consumer acting reasonably in the circumstances.
. . . Second, we examine the practice from the perspective of a
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3
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STATEMENT OF COMMISSIONER LEARY
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EXTRACTED KEY WORDS
VIOLATIONS COMMISSIONER REQUEST RELIEF COMMISSIONER THOMAS CONCURRING DISSENTING SMART DATA SYSTEMS DISCREET DATA INFORMATION SEARCH COMPLAINTS DECEPTIVE ACTS PRACTICES FEDERAL TRADE COMMISSION GRAMM-LEACH-BLILEY ACT PERMANENT INJUNCTIVE RELIEF SUFFICIENT BASIS PLEAD DEFENDANTS UNFAIR ANCILLARY RELIEF |
STATEMENT OF COMMISSIONER THOMAS B. LEARY
CONCURRING IN PART AND DISSENTING IN PART
Smart Data Systems, File Number 012-3066
Discreet Data, File Number 012-3067
Information Search, Inc., File Number 012-3083
I would have voted for complaints that pleaded "deceptive acts or
practices" in violation of Section 5(a)(1) of the Federal Trade
Commission Act, in addition to violations of the Gramm-Leach-Bliley
Act, and that requested preliminary and permanent injunctive relief
against the violations of law asserted. At the present time, I do not
believe we have a sufficient basis to plead that the defendants'
conduct was "unfair" or to request further ancillary relief.
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4
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EX PARTE TEMP RESTRAINING ORDER
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EXTRACTED KEY WORDS
BUSINESS ASSETS ACCOUNT PLAINTIFF ACT COURT FINANCIAL INSTITUTION BANK FEDERAL TRADE EMPLOYEES PERSONA1 DISCREET DATA DISCREET DATA SYSTEMS MATTER PRELIMINARY INJUNCTION AGENTS DIRECTORS WITNESS RESTRAINING ORDER GARRETT CONSUMERS FEDERAL TRADE COMMISSION RELIEF FTC DEFENDANT PAULA CUSTOMER CONTROL BOOKS INTEND |
I
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
.
HOUSTON DIVISION
1
mDERAL TR4I?E COM.MISSION, >
Plaintif!
V. ) Civil Action
1
PAULA L. GARRETT, 1
d/b/a Discreet Data Systems,
Defendant.
BXP'RTE TEMPORARY RESTRATNING
ASSET FREEZE, EXPEDITED DISCOVERY, AND ORDER TO
WHY PRELIMZNARY INJUNCTION SHOULD NOT ISSUE
Plaintiff, the Federal Trade Commission (6`Commission"), having filed its
permanent injunction and other equitable relief in this matter, pursuant to
of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. $9 45(a) and 53(b); and
522(a) of the Gramm-Leach-Bliley Act ("GLB Act"), 15 U.S.C. 6 6822(a), and having
park for a Temporary Restraining Order pursuant to Rule 65 of ths Federal
Procedure, Fed. R. Cjv. P. 65, ald the Court having considered the complaint,
exhibits, ald memorandum of law filed in support thereof, and now being advised
premises finds that:
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5
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COMPLAINT
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EXTRACTED KEY WORDS
FINANCIAL INSTITUTION FTC ACT DEFENDANT CUSTOMER GLB ACT VIOLATIONS PRACTICES RELIEF COMMISSION REPRESENTATIVES CONSUMERS TRADE COMMISSION ENFORCE BUSINESS PLAINTIFF FEDERAL TRADE COMMISSION UNFAIR DECEPTIVE ACTS COURT FRAUDULENT COMPLAINT EQUITABLE RELIEF WEB SITE BANK ACCOUNT FRAUDULENT STATEMENT OFFICERS OBTAINING FDCP ACT INJURY |
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
)
FEDERAL TRADE COMMISSION, )
)
Plaintiff, ))
v. ) Civil
)
PAULA L. GARRETT, )
d/b/a Discreet Data Systems, ))
Defendant. )
)
)
COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), by its undersigned
attorneys, alleges as follows:
1. The Commission brings this action under Sections 5(a) and 13(b) of the
Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 45(a) and 53(b), and Section 522(a) of the
Gramm-Leach-Bliley Act ("GLB Act"), 15 U.S.C. § 6822(a), to secure preliminary and
permanent injunctive relief, rescission of contracts, restitution, redress, disgorgement, and other
equitable relief for defendant's violations of Section 521 of the GLB Act, 15 U.S.C. § 6821, and
Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
-1-
JURISDICTION AND VENUE
2. Jurisdiction is based on 28 U.S.C. §§ 1331, 1337(a), 1345, and 1355, and on 15
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