Case Number: CIV-MARTINEZ-GOODMAN DEFAULT FINAL JUDGMENT AS TO DEFENDANTS YOUR YELLOW PAGES. INC., CITY PAGES. INC..

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1 Case 1::14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 1 of 16 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA Miami Division Case Number: CIV-MARTINEZ-GOODMAN FEDERAL TRADE COMMISSION, and STATE OF FLORIDA, vs. Plaintiffs, YOUR YELLOW PAGES, INC., RAPIDA PAGES, INC., CITY PAGES, INC., DONOVAN B. HINDS, ANDREW BEITLER &ERNEST BAXTER Defendants. / DEFAULT FINAL JUDGMENT AS TO DEFENDANTS YOUR YELLOW PAGES. INC., CITY PAGES. INC.. AND ERNEST BAXTER THIS CAUSE came before the Court upon Plaintiffs' Motion and Memorandum in Support of Motion for Entry of a Default Judgment as to Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter (D.E. No. 40). On June 9, 2014, Plaintiffs filed their Complaint for Permanent Injunction and Other Equitable Relief(D.E. No. l) in this matter pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. 53(b), and Section (1) ofthe Florida Deceptive and Unfair Trade Practices Act ("FDUTP A"), Fla. Stat (1 ), against: Your Yellow Pages, Inc., Rapid Pages, Inc., City Pages, Inc., Donovan B. Hinds, Andrew Beitler, and Ernest Baxter. Defendants Your Yell ow Pages, City Pages, and Mr. Baxter have each failed to file a timely response to Plaintiffs' Complaint, as the Clerk of Court has noted by entering defaults

2 Case 1::14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 2 of 16 against each of them. (D.E. Nos. 29, 30, 35). Plaintiffs have therefore filed their Motion for Entry of Default Final Judgment and Order for Permanent Injunction and Other Equitable Relief as to Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter ("Plaintiffs' Motion") (D.E. No. 40). The Court has considered the Plaintiffs' Motion and supporting exhibits, as well as the entire record in this matter, and hereby GRANTS Plaintiffs' Motion. IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED as follows: FINDINGS 1. This is an action by the FTC under Sections S(a) and 13(b) ofthe FTC Act, 15 U.S.C. 45(a) and 53(b) and by the State of Florida under Section (1) ofthe FDUTPA, Fla. Stat ( 1 ). Plaintiffs' Complaint seeks permanent injunctive relief against Defendants in connection with the offering for sale or sale of business directory listings in violation of Section 5(a) ofthe FTC Act, 15 U.S.C. 45(a), and Section (1) ofthe FDUTP A, Fla. Stat ( 1 ), and seeks equitable monetary relief in the form of consumer restitution and/or disgorgement. Pursuant to Section 13(b) of the FTC Act, 15 U.S.C. 53(b), the FTC has the authority to seek the relief contained herein. Pursuarit to Florida Statutes Sections (2), , , and , Fla. Stat (2), , and the State of Florida has the authority to seek the relief contained herein. 2. This Court has jurisdiction over the subject matter of this case and personal jurisdiction over the parties hereto. 3. The Plaintiffs' Complaint states claims upon which relief may be granted under Sections 5(a) the FTC Act, 15 U.S.C. 45(a), and Section {1) ofthe FDUTPA, Fla. Stat. -2-

3 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 3 of (1). 4. Venue in the Unites States District Court for the Southern District of Florida is proper pursuant to 28 U.S.C. 139l(b)(2), (c)(2), (c)(3), and (d) and 15 U.S.C. 53(b). 5. The activities of Defendants are "in or affecting commerce" as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. 44 and as 11 trade or commerce" is defined in Florida Statutes Section (8), Fla. Stat (8). 6. Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter were properly served with the Summons and Complaint in this matter and failed to file any responsive pleading as required by Federal Rule of Civil Procedure 12(a). The Clerk entered a Clerk's Default as to Defendant Your Yellow Pages, Inc. on August 20, (D.E. No. 30). The Clerk entered a Clerk's Default as to Defendant City Pages, fnc. on August 20, (D.E. No. 29). The Clerk entered a Clerk's Default as to Defendant Ernest Baxter on October 15, (D.E. No. 35). 7. The factual allegations in the Plaintiffs' Complaint are taken as true against Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter. Those allegations and the evidence supporting them establish that Defendants Your Yell ow Pages, Inc., City Pages, Inc., and Ernest Baxter violated Section 5(a) of the FTC Act, 15 U.S.C. 45(a), and Section (1) ofthe FDUTPA, Fla. Stat (1). 8. The Court now finds that, in connection with the offering for sale or sale of business directory listings, Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter have violated Section 5(a) of the FTC Act, 15 U.S.C. 45(a), and Section (1) of the FDUTP A, Fla. Stat ( 1 ), by falsely representing to consumers, expressly or by -3-

4 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 4 of 16 implication, that consumers have a preexisting business relationship with Defendants. 9. The Court further finds that, in connection with the offering for sale or sale of business directory listings, Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter have violated Section 5(a) of the FTC Act, 15 U.S.C. 45(a), and Section (1) of the FDUTPA, Fla. Stat (1), by falsely representing to consumers, expressly or by implication, that the consumers have agreed to purchase a listing in Defendants' business directory. 10. The Court further finds that, in connection with the offering for sale or sale of business directory listings, Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter have violated Section 5(a) of the FTC Act, 15 U.S.C. 45(a), and Section (1) of the FDUTPA, Fla. Stat (1), by falsely representing to consumers, expressly or by implication, that the consumers owe money to Defendants for a listing in Defendants' business directory. 11. It is proper in this case to enter a permanent injunction to prevent a recurrence of Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter's violations of the FTC Act, 15 U.S.C. 45, and the FDUTPA, Fla. Stat et seq., and to enter equitable monetary relief against Defendants. 12. Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter have received $6,098, USD from the conduct alleged in Plaintiffs' Complaint. 13. Plaintiffs are therefore entitled to equitable monetary relief against Defendants Your Yellow Pages, Inc., City Pages, Inc., and Ernest Baxter in the amount of$6,098, USD, for which Defendants are jointly and severally liable. -4-

5 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 5 of This Order is in addition to, and not in lieu of, any other civil or criminal remedies that may be provided by law. 15. Entry ofthis Order is in the public interest. DEFINITIONS For purposes of this Order, the following definitions apply: A. 11 Defaulting Defendants" means the Individual Defendant and the Corporate Defendants, individually, collectively, or in any combination. 1. ~~corporate Defendants 11 means Your Yellow Pages, Inc., also doing business as EBS Collections, and City Pages, Inc., also doing business as City Yellow Pages and Online City Yell ow Pages, Inc., and their successors, assigns, subsidiaries, and affiliates Individual Defendant" means Ernest Baxter, also known as Ernest Baster and Carl Jenkins. B. "Person" or "persons" includes any individual, group, unincorporated association, limited or general partnership, corporation, or other business entity. C. "Telemarketing" means any plan, program, or campaign which is conducted to induce the purchase of goods or services or a charitable contribution by use of one or more telephones, and which involves a phone call, whether or not covered by the Telemarketing Sales Rule. I. BAN ON TELEMARKETING IT IS ORDERED THAT Defaulting Defendants, whether acting directly or indirectly, are permanently restrained and enjoined from Telemarketing, or from assisting others engaged in -5-

6 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 6 of 16 Telemarketing. II. BAN ON BUSINESS DIRECTORY AND ADVERTISING SERVICES IT IS FURTHER ORDERED THAT Defaulting Defendants, whether acting directly or indirectly, are permanently restrained and enjoined from advertising, marketing, promoting, or offering for sale, or assisting in the advertising, marketing, promoting, offering for sale, or sale, of business directory and advertising services, including website design, creation, maintenance, and search engine optimization services. III. PROHIBITION AGAINST MISREPRESENTATIONS IT IS FURTHER ORDERED THAT Defaulting Defendants, Defaulting Defendants' officers, agents, servants, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, or sale of any good or service, are permanently restrained and enjoined from: A. Misrepresenting, or assisting others in misrepresenting, expressly or by implication: 1. That a consumer has a preexisting relationship with Defendants or any other Person; 2. That a consumer has agreed to purchase a good or service from Defendants or any other Person; 3. That a consumer owes money to Defendants or any other Person for any good or service; 4. The nature of Defendant' or any other Person's relationship with a -6-

7 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 7 of 16 consumer; 5. The purpose of any communication with a consumer; or 6. Any other fact material to consumers concerning any good or service, such as: the total costs; any material restrictions, limitations, or conditions; or any material aspect of its performance, efficacy, nature, or central characteristics. IV. PROHIBITION AGAINST FAILING TO DISCLOSE IT IS FURTHER ORDERED THAT Defaulting Defendants, Defaulting Defendants' officers, agents, servants, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, in connection with the advertising, marketing, promoting or offering for sale, or sale of any good or service by means other than telemarketing, are permanently restrained and enjoined from: A. Failing to disclose in a clear and conspicuous manner: 1. The identity of the seller; 2. The nature of the goods or services; and 3. The total cost to purchase, receive, or use the good or service; or 4. Any other fact material to consumers concerning any good or service, such as: the total costs; any material restrictions, limitations, or conditions; or any material aspect of its performance, efficacy, nature, or central characteristics. V. PROHIBITION AGAINST COLLECTING ACCOUNTS -7-

8 case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 8 of 16 IT IS FURTHER ORDERED THAT Defaulting Defendants, Defaulting Defendants' officers, agents, servants, employees, attorneys, and assigns, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are permanently restrained and enjoined from: B. Attempting to collect or collecting payment for any listing in any business directory or advertising service, including website design, creation, maintenance, and search engine optimization services, and C. Selling, assigning, or otherwise transferring any right to collect payment for any listing in any business directory or advertising service, including website design, creation, maintenance, and search engine optimization services. VI. MONETARY JUDGMENT IT IS FURTHER ORDERED THAT: A. Judgment in the amount of $6,098,7~3.42 USD is entered in favor of Plaintiffs against Defaulting Defendants, jointly and severally, as equitable monetary relief. B. Defaulting Defendants are ordered to pay to Plaintiffs $6,098, USD. Such payment must be made within seven (7) days of the entry of this Order by electronic fund transfer in accordance with instructions previously provided by a representative of Plaintiffs. C. All monies paid to Plaintiffs pursuant to this Order ("joint monies") shall be deposited into a fund administered by the Commission or its agents on behalf of both the Commission and the State of Florida. This fund shall be used for equitable relief, including but not limited to, redress to consumers, and any attendant expenses for the administration of any such equitable relief. In the event that the Commission determines that direct redress to -8-

9 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 9 of 16 consumers is wholly or partially impracticable or money remains after redress is completed, Plaintiffs may, in their discretion, apply any remaining money for such other equitable relief (including consumer information remedies) as they determine to be reasonably related to Defendants' practices alleged in the Complaint. D. All joint funds not used for the equitable relief described in Paragraph C of this Section ("remaining joint funds") shall be divided equally between the Commission and the State of Florida, with halfto be deposited to the U.S. Treasury as disgorgement and half to be deposited to the State of Florida Department of Legal Affairs Escrow Fund. E. Defendants have no right to challenge any actions Plaintiffs or their representatives may take pursuant to this Subsection. VII. TURNOVER OF ASSETS HELD BY THIRD PARTIES IT IS FURTHER ORDERED THAT: A. In order to partially satisfy the monetary judgment set forth in Section VI above, any financial institution, business entity, or person that holds, controls, or maintains custody of any account or asset of any Defaulting Defendant, or any account or asset frozen pursuant to: (a) Plaintiffs' Ex Parte Temporary Restraining Order, Asset Freeze and Order for Other Equitable Relief ("TRO") entered in this matter on June 12, 2014 (D.E. No. 7) and/or (b) the Stipulated Preliminary Injunction Order as to Defendants Your Yellow Pages, Inc., and City Pages, Inc., entered June 23,2014 (D.E. No. 15) and/or (c) the Preliminary Injunction Order as to Defendant Ernest Baxter entered July 1, 2014 (D.E. No. 16), shall tum over such account or asset to the Commission, by wire transfer pursuant to directions provided by counsel for the Commission, or as otherwise agreed to in writing by counsel for the Commission, within 10 days of receiving -9-

10 Case 1::14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 10 of 16 notice of this Order by any means, including, but not limited to, via facsimile. VIII. UNCASHED CHECKS IT IS FURTHER ORDERED THAT Defaulting Defendants relinquish dominion and all legal and equitable right, title, and interest in all uncashed checks and other negotiable instruments sent, whether before or after entry of this Order, by consumers in response to Defaulting Defendants' sale ofbusiness directory and advertising services, including website design, creation, maintenance, and search engine optimization services. Defaulting Defendants must destroy all such uncashed checks and other negotiable instruments within thirty (30) days of entry ofthis Order or, if received after entry ofthis Order, within seven (7) days ofreceipt of any such uncashed checks and other negotiable entries. IX. CUSTOMER INFORMATION IT IS FURTHER ORDERED THAT Defaulting Defendants, Defaulting Defendants' officers, agents, servants, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice ofthis Order, are permanently restrained and enjoined from, directly or indirectly: A. Failing to provide sufficient customer information to enable Plaintiffs to efficiently administer consumer redress. If a representative of Plaintiffs requests in writing any information related to redress, Defaulting Defendants must provide it, in the form prescribed by Plaintiffs, within 14 days; B. Disclosing, using, or benefitting from customer information, including the name, address, telephone number, address, Social Security number, other identifying information, or any data that enables access to a customer's account (including a credit card, bank account, or -10-

11 Case 1::14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 11 of 16 other financial account) that any Defaulting Defendant obtained prior to entry of this Order in connection with marketing or sale of business directory listings; and C. Failing to destroy such customer information in all forms in their possession, custody, or control within 30 days after receipt of written direction to do so from a representative of the Commission. Provided, however, that customer information need not be disposed of, and may be disclosed, to the extent requested by a government agency or required by law, regulation, or court order. X. ORDER ACKNOWLEDGMENTS IT IS FURTHER ORDERED THAT Defaulting Defendants obtain acknowledgments of receipt ofthis Order: A. Each Defaulting Defendant, within 7 days of entry of this Order, must submit to Plaintiffs an acknowledgment of receipt of this Order sworn under penalty of perjury. B. For 5 years after entry of this Order, each Individual Defendant for any business that such Individual Defendant, individually or collectively with any other Defaulting Defendant, is the majority owner or controls directly or indirectly, and each Corporate Defendant, must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all employees, agents, and representatives who participate in conduct related to the subject matter of the Order; and (3) any business entity resulting from any change in structure as set forth in the Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order for current personnel. For all others, delivery must occur before they assume their responsibilities. -11-

12 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 12 of 16 C. From each individual or entity to which a Defaulting Defendant delivered a copy of this Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of receipt ofthis Order. XI. COMPLIANCE REPORTING IT IS FURTHER ORDERED THAT Defaulting Defendants make timely submissions to Plaintiffs: A. One year after entry of this Order, each Defaulting Defendant must submit a compliance report, sworn under penalty of perjury: 1. Each Defaulting Defendant must: (a) identify the primary physical, postal, and address and telephone number; as designated points of contact, which representatives of the Commission and State offlorida may use to communicate with Defendant; (b) identify all of that Defaulting Defendant's businesses by all of their names, telephone numbers, and physical, postal, , and Internet addresses; (c) describe the activities of each business, including the goods and services offered, the means of advertising, marketing, and sales, and the involvement of any Defendant (which Individual Defendants must describe ifthey know or should know due to their involvement) (d) describe in detail whether and how that Defaulting Defendant is in compliance with each Section ofthis order, and (e) provide a copy of each Order Acknowledgment obtained pursuant to this Order, unless previously submitted to the Commission and the State of Florida. 2. Additionally, each Individual Defendant must: (a) identify all telephone numbers and all physical, postal, and Internet addresses, including all residences; (b) identify all business activities, including any business for which such Defaulting Defendant -12-

13 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 13 of 16 performs services whether as an employee or otherwise and any entity which such Defaulting Defendant has any ownership interest; and (c) describe in detail such Defaulting Defendant's involvement in each such business, including title, role, responsibilities, participation, authority, control, and any ownership. B. For 20 years after entry ofthis Order, each Defaulting Defendant must submit a compliance notice, sworn under penalty of perjury, within 14 days of any change in the following: I. Each Defaulting Defendant must report any change in: (a) any designated point of contact; or (b) the structure of any Corporate Defendant or any entity that Defaulting Defendant has any ownership interest in or controls directly or indirectly that may affect compliance obligations arising under this Order, including: creation, merger, sale, or dissolution of the entity of any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order. 2. Additionally, each Individual Defendant must report any change in: (a) name, including aliases or fictitious names, or residence address; or (b) title or role in any business activity, including any business for which such Defaulting Defendant performs services, whether as an employee or otherwise, and any entity in which such Defaulting Defendant has any ownership interest, and identify the name, physical address, and any Internet address of the business or entity; C. Each Defendant must submit to Plaintiffs notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant within 14 days of its filing. -13-

14 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 14 of 16 D. Any submission to Plaintiffs required by this Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C. 1746, such as by concluding: "I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: "and supplying the date, signatory's full name, title (if applicable), and signature. E. Unless otherwise directed by Plaintiffs' representative in writing, all submissions to the Commission pursuant to this Order must be ed 'to or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC The subject line must begin: FTC v. Your Yellow Pages, Inc., X All submissions to the State of Florida Office of the Attorney General must be sent to: Ryann Flack, Assistant Attorney General, Consumer Protection Division, Office of the Attorney General State of Florida, 444 Brickell A venue, 6'h Floor, Miami, FL XII. RECORDKEEPING IT IS FURTHER ORDERED THAT Defaulting Defendants must create certain records for 20 years after entry ofthis Order, and retain each such record for 5 years. Specifically, Corporate Defendants and Individual Defendant, for any business that such Defendant, individually or collectively with any other Defaulting Defendants, is a majority owner or controls directly or indirectly, must create and retain the following records: A. accounting records showing the revenues from all goods or services sold; B. personnel records showing, for each person providing services, whether as an employee or otherwise, that person's name; addresses; telephone numbers; job title or position;

15 case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 15 of 16 dates of service~ and (if applicable) the reason for termination; C. records of all consumer complaints and refund requests, whether received directly or indirectly, such as through a third party, and any response; D. all records necessary to demonstrate full compliance with each provision of this Order, including all submissions to Plaintiffs; and E. a copy of each unique advertisement or other marketing material. XIII. COMPLIANCE MONITORING IT IS ORDERED THAT, for the purpose of monitoring Defaulting Defendants' compliance with this Order and any failure to transfer any assets as required by this Order: A. Within 14 days of receipt of a written request from a representative of the Plaintiffs, each Defaulting Defendant must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury; and appear for depositions; and produce documents for inspection and copying. The Commission and State of Florida are also authorized to obtain discovery, without further leave of court, using any of the procedures prescribed by Federal Rules of Civil Procedure 29,30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69. B. For matters concerning this Order, the Commission and State of Florida are authorized to communicate directly with each Defaulting Defendant. Defaulting Defendants must permit representatives of Plaintiffs to interview any employee or other person affiliated with them who has agreed to such an interview. The person interviewed may have counsel present. C. Plaintiffs may use all other lawful means, including posing, through their -15-

16 Case 1:14-cv JEM Document 41 Entered on FLSD Docket 10/29/2014 Page 16 of 16 representatives as consumers, suppliers, or other individuals or entities, to Defendants or any individual or entity affiliated with Defaulting Defendants, without the necessity of identification or prior notice. Nothing in this Order limits the Commission's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. 49, 57b-1. XIV. LIFTING OF ASSET FREEZE IT IS ORDERED THAT the freeze on the assets of Defaulting Defendants shall remain in effect until the Commission has received the total amount required by Section VI above, provided, however, that Defaulting Defendants may transfer funds to the extent necessary to make all payments required by Section VI above. Upon payment to the Commission of the total amount required by Section VI above, the freeze against the assets of Defaulting Defendants shall be lifted permanently. XV. RETENTION OF JURISDICTION IT IS ORDERED THAT this Court retains jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. DONE AND ORDERED in Chambers at Miami, Florida, this~ day of October, Copies provided to: Magistrate Judge Goodman All Counsel of Record JOSE E. ARTINEZ UNITE STATES DISTRIC -16-