UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION

FEDERAL TRADE COMMISSION, CASE NO. 4:14-cv-00815-BCW
Plaintiff,
Vv.

BF LABS, INC., et al.

Defendants.

FTC’S REPLY SUGGESTIONS IN SUPPORT OF ITS MOTION TO STRIKE
AFFIRAMTIVE DEFENSES OF DEFENDANT NASSER GHOSEIRI

As discussed in the FTC’s Suggestions in Support of its Motion to Strike (DE 338) and in
its Reply Suggestions in Support of its Motion to Strike the Affirmative Defenses of Defendants
BF Labs, Darla Drake, and Sonny Vleisides (DE 349), Defendant Ghoseiri cannot prevail on any
of his thirty-nine affirmative defenses. Allowing those defenses to survive into discovery would
only waste resources and thereby reduce money available for consumer redress. Defendant
Ghoseiri concedes that many of his defenses are not valid defenses to liability for violating
Section 5. For the remainder, Defendant Ghoseiri fails to rebut the FTC’s arguments that his
defenses are improper — indeed, for many defenses, he offers no opposition at all. Therefore, the
Court should exercise its discretion to strike these defenses because litigation regarding them
would prejudice the FTC and consumers harmed by Defendants’ scheme.

Defendant Ghoseiri does not offer any argument in opposition to the FTC’s motion to
strike. Instead, he adopts and incorporates by reference the opposition of Defendants BF Labs,
Drake, and Vleisides (DE 343) without any further argument of his own. (DE 344 at 1.) But

Defendant Ghoseiri has asserted thirty-nine affirmative defenses and the other Defendants have

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asserted nineteen, with only eighteen common affirmative defenses between them. Defendant
Ghoseiri, thus, has offered no argument at all as to why his second, third, fourth, fifth, sixth,
seventh, ninth, eleventh, fourteenth, sixteenth, twenty-first, twenty-second, twenty-fifth, twenty-
sixth, twenty-seventh, twenty-eighth, thirtieth, thirty-first, thirty-second, thirty-third, and thirty-
sixth defenses should not be struck.! The Court, therefore, should strike these twenty-one
defenses.

With respect to Defendant Ghoseiri’s other eighteen defenses, the FTC adopts and
incorporates by reference its reply suggestions in support of its motion to strike the affirmative
defenses of Defendants BF Labs, Drake, and Vleisides. (DE 349.) To aid the Court, the
following table identifies Defendant Ghoseiri’s remaining defenses, the corresponding defenses

of Defendants BF Labs, Drake, and Vleisides, and the location in the FTC’s Reply Suggestions.

Ghoseiri Affirmative Defense | BF Labs, Drake, and Vleisides Location in FTC Reply
Affirmative Defense Suggestion

1 1 Section IV, DE 349 at 3

8, 10, 18, 38 2, 3, 8, 17 Section V, DE 349 at 3-4

12, 15, 19, 20, 29, 34, 35, 37 4, 6, 9, 10, 13, 14, 15, 16 Section VI, DE 349 at 4-5
13, 15, 23, 24, 29 5, 6, 11, 12, 13 Section VII, DE 349 at 5-7
17 7 Section VII, DE 349 at 7-8
23 11 Section IX, DE 349 at 8-10
39 19 Section X, DE 349 at 10

Accordingly, for the reasons set forth herein and in the FTC’s Suggestions in Support, the
Court should strike, pursuant to pursuant to Federal Rule of Civil Procedure 12(f), all thirty-nine

of Defendant’s affirmative defenses.

' To the extent that Defendant Ghoseiri might be relying on the Suggestions in Opposition filed
by Defendants in February 2015 (DE 261), the FTC adopts and incorporates by reference its
Reply Suggestions filed in March 2015 (DE 271). In particular, Defendant Ghoseiri’s second,
third, fourth, fifth, sixth, ninth, fourteenth, twenty-first, twenty-second, twenty-seventh, and
thirtieth defenses are addressed in Section V of the FT'C’s brief (DE 271 at 5-6), his seventh,
twenty-fifth, twenty-eighth, thirty-first, thirty-second, thirty-third, and thirty-sixth defenses are
addressed in Section IV (DE 271 at 3-5), and his eleventh, sixteenth, and twenty-sixth defenses
are addressed in Section VII (DE 271 at 7).

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Case 4:14-cv-00815-BCW Document 350 Filed 07/27/15 Page 2 of 4

Respectfully submitted,

JONATHAN E. NUECHTERLEIN
General Counsel

Dated: July 27, 2015 /s/ Gregory A. Ashe
Helen Wong, DC Bar #997800

Leah Frazier, DC Bar #492540
Gregory A. Ashe, VA Bar #39131
Jason M. Adler, IL Bar #6295738
Federal Trade Commission

600 Pennsylvania Ave., N.W.
Mail Stop CC-10232
Washington, D.C. 20580
202-326-3779 (Wong)
202-326-2187 (Frazier)
202-326-3719 (Ashe)
202-326-3231 (Adler)

Facsimile: 202-326-3768

hwong @ftc.gov

Ifrazier @ftc.gov

gashe @ftc.gov

jadler@ftc.gov

TAMMY DICKINSON
United States Attorney

Dated: July 27, 2015 /s/ Charles M. Thomas
Charles M. Thomas, MO Bar #28522
Assistant United States Attorney
Charles Evans Whittaker Courthouse
400 East Ninth Street, Room 5510
Kansas City, MO 64106
Telephone: (816) 426-3130
Facsimile: (816) 426-3165
E-mail: charles.thomas @usdoj.gov

Attorneys for Plaintiff
FEDERAL TRADE COMMISSION

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CERTIFICATE OF SERVICE
The undersigned hereby certifies that on July 27, 2015, a true and
correct copy of the foregoing was filed electronically with the United States District Court

for the Western District of Missouri using the CM/ECF system, which sent notification to all
parties of interest participating in the CM/ECF system.

/s/ Gregory A. Ashe
Attorney for Plaintiff Federal Trade Commission

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