Our initial story on Redwood Scientific Technologies’ troubles with the FTC left off with an April 23rd show cause hearing.
In a nutshell, Redwood Scientific Technologies, who own the MLM company Rengalife, have been accused of violations of the FTC Act.
Rather than cooperate, Rengalife had failed to provide the FTC with requested information.
Having missed several deadlines, the FTC was now treating the matter as a contempt of court issue.
As per a filed May 22nd Status Report, we pick up the story right before the April 23rd hearing.
The day before the April 23rd hearing, a Sunday, saw Redwood Scientific Technologies attorney send the FTC’s counsel an email.
The FTC agents were at the time en route to the hearing from Washington D.C.
acknowledged that Redwood’s productions had “deficiencies” and that Redwood recognized it had not provided all responsive records.
It was also claimed Redwood had engaged a discover vendor to assist them with production.
But more importantly several new production deadlines were given, spanning April 27th to May 25th.
On April 23rd the scheduled show case hearing proceeded, at which Redwood’s attorney represented to the court ‘that Redwood would fully comply with the CID by May 25‘.
Despite Redwood having previously missed several production deadlines, the court continued the hearing to May 29th.
April 27th rolled around and… you guessed it, Redwood’s attorney failed to provide to provide the promised information.
All in all Redwood provided five dates it was to provide requested information to the FTC between April 27th and May 25th.
Redwood and their attorneys failed to respond to the FTC over the four-week period and, as at the time of the filed Status Report, have missed four of the five self-imposed production deadlines.
In sum, after the court scheduled the show cause hearing, Redwood made a series of promises to the FTC and the Court about what the company intended to produce.
Now, four weeks after the hearing, Redwood has met none of the promises and has only provided to the FTC the concededly deficient productions on March 22 and April 9.
These most recent broken promises only confirm that Redwood has failed to meet every single deadline it claimed it would meet over the past eight months in response to the Commission’s CID.
This failure to comply with the CID continues to impede the FTC’s investigation by withholding responsive and relevant information.
The FTC even gave Redwood’s attorney a chance to contribute to the Status Report and perhaps offer an explanation.
They didn’t hear anything back.
It wasn’t until May 22nd that the FTC heard from Redwood’s attorney.
In that letter, (Redwood’s attorney) represented that Redwood and its vendor Lighthouse encountered issues because the FTC’s search terms resulted in a high number of positive hits.
(Redwood’s attorney) promised that the company would make a production to the FTC on May 23, 2018, but she also requested to meet and confer with FTC staff to narrow the search terms to facilitate additional productions.
Despite having failed to communicate at all with the FTC over the past four weeks, Redwood’s attorney also asked for a continuance of the show cause hearing to June or July.
The FTC appear to have had enough and claim the attorney’s attempt to contact them ‘at the literal last minute … should have no effect on the FTC’s requested relief‘.
Said requested relief is confirmation that Redwood are in contempt of court and a $5000 a day fine ‘until the company makes a full and complete production to the FTC‘.
The Court should also consider additional sanctions for Redwood’s willful conduct because the company’s continuing failure to abide by its promises, to produce information, or even to respond to FTC’s staff’s communications shows a willful disregard for the Commission’s CID and this Court’s enforcement order.
I assume the matter will be taken up at the scheduled May 29th hearing.
As I concluded in our initial coverage of the FTC action, either Redwood are sitting on some damning information or their attorney is entirely incompetent.
Not expecting the court to be very lenient on the 29th. Stay tuned…