UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA M iam i Division. Case Num ber: 14- ZZIZ9-CIV-M ARTINEZ-G OODM AN

Transcription

1 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 1 of 13 UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA M iam i Division Case Num ber: 14- ZZIZ9-CIV-M ARTINEZ-G OODM AN FEDERAL TRADE COMMISSION and STATE OF FLORIDA, VS. Plaintiffs, YOUR YELLOW PAGES, m C., a Florida corporation, also doing business as EBS COLLECTION S, RAPID PAGES, INC., a Florida com oration, also doing business as R APID YELLOW PAGES, CITY PAGES! ln C., a Florida com oration, also doing buslness as CITY YELLOW PAGES and ON LINE CITY YELLOW PA GES, DONOVAN B. HINDS a/k/a Donavan B. Hinds, individualy and as an officer, director, or owner of YOUR YELLOW PAGES, IN C. and CITY PAGES, lnc., ANDREW BEITLER, individualy and as an officer, director, or owner of RAPID PAGES, INC., and ERN EST BAX TER a/k/a Ernest Baster a1va Carl Jenkins, individually, and as an officer, director, m anager, or owner of YOUR YELLOW PAGES, ln C., CITY PAGES, INC. and RAPID PAGES, INC., Defendants. FINAL JUDGM ENT AND ORDER FOR PERM ANENT INJUNCTION AND OTHER EO UITABLE RELIEF AS TO DEFENDANT M PID PAGES. INC. - 1-

2 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 2 of 13 On June 9, 2014, Plaintiffs Federal Trade Comm ission and State of Florida filed their Complaint For Permanent lnjunction And Other Equitable Relief in this mater pursuant to Section 13(b) of the Federal Trade Commission Act (ESFTC Act'), 15 U.S.C. j 53(b), and Sedion ) of the Florida Deceptive and Unfair Trade Practices Act (StFDUTPA'), Fla. Stat. j ), against: Your Yellow Pages, lnc., Rapid Pages, Inc., City Pages, lnc., Donovan B. Hinds, Andrew Beitler, and Ernest Baxter. (ECF No. 1J Defendant Rapid Pages (ûidefendanf') has failed to file a timely response to the Plaintiffs' Complaint, as the Clerk of Court has noted by entering defaults against it. (ECF No. 45.) Plaintiffs have therefore filed their M otion for Entry ofdefault Judgment as to Defendant Rapid Pages, Inc. (the tdm otion') (ECF No The Court has considered the Plaintiffs' M otion and supporting exhibits, as wel as the entire record in this m ater, and hereby GRANTS Plaintifs' M otion For Entry of Default Judgment as to Defendant Rapid Pages, lnc. (ECF No IT IS TH EREFORE O RDERED, ADJUDGED, AND DECREED as folows: FINDINGS 1. This is an action by the FTC under Sections 5(a) and 13(b) of the FTC Act, 15 U.S.C. jj 45(a) and 53(b) and by the State of Florida under Section ) of the FDUTPA, Fla. Stat. j ). Plaintiffs' Complaint seeks permanent injunctive relief against Defendant in connection with its offering for sale or sale of business directory listings in violation of Section 5(a) of the FTC Act, 15 U.S.C. j 45(a), and Section (1) of the FDUTPA, Fla. Stat. j (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. j 53(b), the FTC has the authority to seek the relief contained herein. Pursuant to Florida Statutes Sections ), , , and , Fla. Stat. jj ), , and the State of Florida has the authority to seek the relief contained herein. This Court has jurisdiction over the subject mater of this case and personal jurisdiction over the parties hereto.

3 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 3 of 13 The Plaintiffs' Complaint (ECF No. 1j states claims upon which relief may be granted under Sections 5(a) the FTC Act, 15 U.S.C. j 45(a), and Section ) of the FDUTPA, Fla. Stat. j (1). 4. Venue in the Unites States District Court for the Southern District of Florida is proper pursuant to 28 U.S.C. j 1391(b)(2), (c)(2), (c)(3), and (d) and 15 U.S.C. j 53(b). 5. The activities of Defendant are dsin or affecting com m erce' as tscom merce' is defined in Section 4 of the FTC Act, 15 U.S.C. j 44 and as Sftrade or commerce' is defined in Florida Statutes Section (8), Fla. Stat. j ). 6. Defendant Rapid Pages was properly served with the Summ ons and Complaint in this matter (ECF No. 33) 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 Rapid Pages, lnc. on November 17, 2014 (ECF No The factual alegations in the Plaintiffs' Complaint (ECF No. 1q are taken as true against Defendant Rapid Pages, lnc. Those allegations and the evidence supporting them establish that Defendant Rapid Pages, Inc. violated Section 5(a) of the FTC Act, 15 U.S.C. j 45(a), and Section (1) of the FDUTPA, Fla. Stat. j (1). 8. The Court now finds that, in connection with the offering for sale or sale of business directory listings, Defendant Rapid Pages, Inc. has violated Section 5(a) of the FTC Act, 15 U.S.C. j 45(a), and Section ) of the FDUTPA, Fla. Stat. j (1), by falsely representing to consum ers, expressly or by implication, that consum ers have a preexisting business relationship with Defendant. 9. The Court further finds that, in cormection with the offering for sale or sale of business directory listings, Defendant Rapid Pages, lnc. has violated Section 5(a) of the FTC Act, 15 U.S.C. j 45(a), and Section ) of the FDUTPA, Fla. Stat. j ), by falsely representing to consum ers, expressly or by im plication, that the consum ers have agreed to purchase a listing in Defendant's business directory. -3-

4 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 4 of The Court further tsnds that, in connection with the offering for sale or sale of business directory listings, Defendant Rapid Pages, Inc. has violated Section 5(a) of the FTC Act, 15 U.S.C. j 45(a), and Section (1) of the FDUTPA, Fla. Stat. j ), by falsely representing to consum ers, expressly or by im plication, that the consum ers ow e m oney to D efendant for a listing in Defendant's business directory. 1. lt is proper in this case to enter a permanent injunction to prevent a recurrence of Defendant Rapid Pages Inc.'s violations of the FTC Act, 15 U.S.C. j 45, and the FDUTPA, Fla. Stat et seq., and to enter equitable m onetary relief against Defendant. 12. Defendant Rapid Pages, lnc., and its co-defendants, have received $6,098, USD from the conduct aleged in Plaintifs' Complaint (ECF No Plaintiffs are therefore entitled to equitable monetary relief against Defendant Rapid Pages, lnc. in the nmount of $6,098, USD, for which Defendant is jointly mzd severally liable. This Order is in addition to, and not in lieu of, any other civil or crim inal rem edies that may be provided by law. 15. Entry of this Order is in the public interest. DEFINITIONS For purposes of this Order, the following definitions apply: A. SdDefaulting Defendant' means Rapid Pages, lnc., also doing business as Rapid Yelow Pages, and its successors, assigns, subsidiaries, and affiliates. B. 'Person' or Skpersons' includes any individual, group, unincorporated association, lim ited or general partnership, com oration, or other business entity. C. çs-relem arketing' m eans any plan, program, or campaign which is conducted to induce the purchase of goods or services or a chmitable contribution by use of one or m ore telephones, and which involves a phone cal, whether or not covered by the Telem arketing Sales Rule. - 4-

5 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 5 of 13 BAN ON TELEMARKETING IT IS ORDERED THAT Defaulting Defendant, whether acting directly or indirectly, is permanently restrained and enjoined from Telemarketing, or from assisting others engaged in Telem arketing. II. BAN ON BUSINESS DIRECTORY AND ADVERTISING SERVICES IT IS FURTHER ORDERED THAT Defaulting Defendant, whether acting directly or indirectly, is permanently restrained and enjoined from advertising, marketing, promoting, or offering for sale, or assisting in the advertising, m arketing, prom oting, offering for sale, or sale, of business directory and advertising services, including website design, creation, m aintenance, and search engine optim ization services PROHIBITION AGAINST MISREPRESENTATIONS IT IS FURTHER ORDERED THAT Defaulting Defendant, Defaulting Defendant's officers, agents, servants, employees, and attom eys, 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, m arketing, promotion, offering for sale, or sale of any good or service by means other than telemarketing, are permanently restrained and enjoined from: M isrepresenting, assisting others in m isrepresenting, expressly or by implication: That a consumer has a preexisting relationship with Defendant or any other Person; That a consum er has agreed to purchase a good or service from D efendant or any other Person; That a consumer owes m oney to Defendant or any other Person for 4. any good or service', The nature of Defendant's or any other Person's relationship with a consum er; - 5-

6 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 6 of 13 The purpose of any communication with a consum er; or Any other fact material to consumers conceming any good or service, such as: the total costs; any m aterial restrictions, limitations, or conditions; or any material aspect of its perform ance, efticacy, nature, or central characteristics. lv. PROH IBITION AGAINST FAILING TO DISCLOSE IT IS FURTHER ORDERED THAT Defaulting Defendant, Defaulting Defendant's officers, agents, servants, employees, and attorneys, and a1 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, prom oting 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 m anner: 1. The identity of the seller', The nature of the goods or services; and The total cost to purchase, receive, or use the good or service; or Any other fact m aterial to consum ers concerning any good or service, such as: the total costs; any m aterial restrictions, limitations, or conditions; or any m aterial aspect of its perform ance, effcacy, nature, or central characteristics. V. PROHIBITION AGAINST COLLECTING ACCOUNTS IT IS FURTHER ORDERED THAT Defaulting Defendant, Defaulting Defendant's officers, agents, servants, em ployees, attorneys, and assigns, and al other Persons in active concert or participation w ith any of them, w ho receive actual notice of this Order, whether acting directly or indirectly, are permanently restrained and enjoined from: -6-

7 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 7 of 13 A. Attempting to colect or collecting paym ent for any listing in any business directory or advertising service, including w ebsite design, creation, m aintenance, and search engine optim ization services, and B. Seling, assigning, or otherwise transfening any right to colect payment for any listing in any business directory or advertising service, including website design, creation, maintenance, and search engine optim ization services. VI. M ONETARY JUDGMENT IT IS FURTHER ORDERED THAT: Judgm ent in the am ount of $6,098, USD is entered in favor of Plaintiffs against Defaulting Defendant, jointly and severally, as equitable monetary relief. B. Defaulting Defendant is 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. A l monies paid to Plaintiffs pursuant to this Order Cjoint monies') shal be deposited into a fund administered by the Commission or its agents on behalf of both the Comm ission and the State of Florida. This fund shal be used for equitable relief, including but not lim ited to, redress to consum ers, and any attendant expenses for the adm inistration of any such equitable relief. ln the event that the Comm ission determines that direct redress to consum ers is who ly or partially im practicable or money rem ains after redress is completed, Plaintifs m ay, in their discretion, apply any rem aining money for such other equitable relief (including consumer information remedies) as they determine to be reasonably related to Defendant's practices aleged in the Complaint. A 1 joint funds not used for the equitable relief described in Paragraph C of this Section ('lremaining joint funds') shall be divided equally between the Commission and the State of Florida, with half to be deposited to the U.S. Treasury as disgorgement and half to be deposited to the State of Florida Departm ent of Legal A fairs Escrow Fund. - 7-

8 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 8 of 13 Defaulting Defendant has no right to chalenge any actions Plaintiffs or their representatives m ay take pursuant to this Subsection. VII. TURNOVER OF ASSETS HELD BY THIRD PARTIES IT IS FURTHER ORDERED THAT: A. In order to partialy satisfy the monetary judgment set forth in Section VI above, any fnancial institution, business entity, or person that holds, controls, or m aintains custody of any account or asset of 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 ((ttro') entered in this mater on June 12, 2014 and/or (b) the Stipulated Preliminary Injunction Order as to Defendant Rapid Pages, Inc., entered June 23, 2014, shall turn over such account or asset to the Comm ission, by wire transfer pursuant to directions provided by counsel for the Commission, or as otherwise agreed to in m iting by counsel for the Commission, within 10 days of receiving notice of this Order by any m eans, including, but not limited to, via facsimile. VIIl. UNCASHED CHECKS IT IS FURTHER ORDERED THAT Defaulting Defendant relinquish dom inion and a1l legal and equitable right, title, and interest in al uncashed checks and other negotiable instrum ents sent, whether before or after entry of this Order, by consumers in response to Defaulting Defendant's sale of business directory and advertising services, including website design, creation, maintenance, and search engine optimization services. Defaulting Defendant must destroy all such uncashed checks and other negotiable instruments within thirty (30) days of entry of this Order or, if received after entry of this Order, within seven (7) days of receipt of any such uncashed checks and other negotiable entries. IX. CUSTOM ER INFORM ATION IT IS FURTHER ORDERED THAT Defaulting Defendant, Defaulting Defendant's officers, agents, servants, em ployees, and attom eys, and a11 other Persons in active concert or - 8-

9 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 9 of 13 participation with any of them, who receive actual notice of this Order, are perm anently restrained and enjoined from, directly or indirectly: A. Failing to provide sufficient custom er information to enable Plaintifs to efficiently adm inister consum er redress. lf a representative of Plaintiffs requests in writing any inform ation related to redress, Defaulting Defendant must provide it in the form prescribed by Plaintiffs, within 14 days; B. Disclosing, using, or benefhting from custom er inform ation, including the name, address, telephone number, em ail address, Social Security number, other identifying infonnation, or any data that enables access to a customer's account (including a credit card, bnnk account, or other financial account) that Defaulting Defendant obtained prior to entry of this Order in connection with marketing or sale of business directory listings; and Failing to destroy such custom er inform ation in a1 form s in their possession, custody, or control within 30 days after receipt of written direction to do so from a representative of the Com m ission. Provided, however, that custom er inform ation 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 ACKNOW LEDGMENTS IT IS FURTHER ORDERED THAT Defaulting Defendant obtains acknowledgments of receipt of this Order: A. Defaulting Defendant, within 7 days of entry of this Order, m ust submit to Plaintiffs an acknowledgment of receipt of this Order sworn under penalty of perjury. B. For 5 years after entry of this Order, D efaulting D efendant m ust deliver a copy of this Order to: (1) a1 principals, offcers, directors, and LLC managers and members; (2) al1 employees, agents, and representatives who participate in conduct related to the subject mater of the Order; and (3) any business entity resulting from any change in structure as set forth in the Section titled Com pliance Reporting. D elivery m ust occur w ithin 7 days of entry of this Order -9-

10 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 10 of 13 for current personnel. For al1 others, delivery must occur before they assum e their responsibilities. From each individual or entity to which Defaulting Defendant delivered a copy of this Order, Defaulting Defendant must obtain, within 30 days, signed and dated acknowledgm ent of receipt of this Order. XI. COM PLIANCE REPORTING IT IS FURTHER ORDERED THAT Defaulting Defendant m akes tim ely subm issions to Plaintiffs'. One year afler entry of this Order, Defaulting Defendant must subm it compliance report, sworn under penalty of perjury: Defaulting Defendant must: (a) identify the primary physical, postal, and address and telephone number, as designated points of contact, which representatives of the Comm ission and State of Florida m ay use to comm unicate with Defaulting Defendant; (b) identify a11 of Defaulting Defendant's businesses by a1 of their names, telephone numbers, and physical, postal, , and Intemet 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 (d) describe in detail whether and how Defaulting Defendant is in compliance with each Section of this order, and (e) provide a copy of each Order Acknowledgment obtained pursuant to this Order, unless previously subm itted to the Comm ission and the State of Florida B. For 20 years after entry of this Order, Defaulting Defendant must subm it a compliance notice, sworn under penalty of perjury, within 14 days of any change in the following: 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, m erger, sale, or dissolution of the entity of any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order

11 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 11 of 13 C. Defaulting Defendant must submit to Plaintiffs notice of the filing of any bankruptcy petition, insolvency proceeding, or sim ilar proceeding by or against Defaulting Defendant within 14 days of its filing. 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. j 1746, such as by concluding: d(i declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: name, title (if applicable), and signature. ' and supplying the date, signatory's fu l E. Unless otherwise directed by Plaintiffs' representative in writing, al submissions to the Commission pursuant to this Order must be ed to DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to; Associate Director for Enforcement, Bureau of Consum er Protection, Federal Trade Com mission, 600 Pennsylvania Avenue N W, W ashington, DC The subject line must begin: FTC v. Your Yelow Pages, Inc., X A 1 subm issions to the State of Florida O fice of the A tom ey General m ust be sent to: Rynnn Flack, Assistant Attorney General, Consum er Protection Division, Office of the Attorney General State of Florida, 444 Bricktl Avenue, 6 th Floor, M iami, FL XII. RECORDKEEPING IT IS FURTHER ORDERED THAT Defaulting Defendant m ust create certain records for 20 years after entry of this Order, and retain each such record for 5 years. Specificaly, Defaulting Defendant must create and retain the fo lowing records: accounting records showing the revenues from all goods or services sold; B. persorm el records showing, for each person providing services, whether as an employee or otherwise, that person's name; addresses; telephone numbers; job title or position; dates of service; and (if applicable) the reason for tennination; records of a11 consum er complaints and refund requests, whether received directly or indirectly, such as through a third party, and any response;

12 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 12 of 13 D. al1 records necessary to demonstrate ful compliance with each provision of this O rder, including a l subm issions to Plaintiffs; and E. a copy of each unique advertisement or other marketing m aterial. XIIl. COM PLIANCE M ONITORING IT IS ORDERED THAT, for the purpose of m onitoring Defaulting Defendant's compliance with this Order and any failure to transfer any assets as required by this Order: A. Within 14 days of receipt of a writen request from a representative of the Plaintiffs, Defaulting Defendant must: subm it additional compliance reports or other requested information, which must be sworn under penalty of perjury; and appear for depositions; and produce docum ents for inspection and copying. The Com m ission 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 concem ing this Order, the Com mission and State of Florida are authorized to comm unicate directly with Defaulting Defendant. Defaulting Defendant m ust 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 a11 other lawful means, including posing, tlrough their representatives as consum ers, suppliers, or other individuals or entities, to Defendant or any individual or entity affiliated with Defaulting Defendant, without the necessity of identification or prior notice. Nothing in this Order limits the Com mission's lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. jj 49, 57b-1. XIV. LIFTING OF ASSET FREEZE IT IS ORDERED THAT the freeze on the assets of Defaulting Defendant shal remain in effect until the Commission has received the total amount required by Section VI above, provided, however, that Defaulting Defendant may transfer funds to the extent necessary to m ake a1 payments required by Section V l above. Upon payment to the Com mission of the total -12-

13 Case 1:14-cv JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 13 of 13 amount required by Section V1 above, the freeze against the assets of Defaulting Defendant shall be lifted permanently. XV. RETENTION OF JURISDICTION IT IS ORDERED THAT this Court retains jurisdiction of this matter for pumoses of construction, m odification, and enforcem ent of this Order. DONE AND ORDERED in Chambers at M iami, Florida, this )ö day of June, 2015 Copies provided to: M agistrate Judge G oodm an A l1 Counsel of Record JOSE E. ARTINEZ UNITE STATES DISTRICT JUDGE - 13-