YOUR YELLOW PAGES, mC., a Florida corporation, also doing ...€¦ · Case 1:14-cv-22129-JEM...

UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF FLORIDA

M iami Division

Case Number: 14- ZZIZ9-CIV-M ARTINEZ-GOODM AN

FEDERAL TRADE COMM ISSION andSTATE OF FLORIDA ,

Plaintiffs,

VS.

YOUR YELLOW PAGES, m C., a Floridacorporation, also doing business as EBS

COLLECTIONS,

RAPID PAGES, INC., a Florida

com oration, also doing business as RAPID

YELLOW PAGES,

CITY PAGES lNC., a Florida comoration,!

also doing buslness as CITY YELLOW

PAGES and ONLINE CITY YELLOWPAGES,

DONOVAN B. HINDS a/k/a Donavan B.

Hinds, individually and as an officer,director, or owner of YOUR YELLOW

PAGES, INC. and CITY PAGES, lNC.,

ANDREW BEITLER, individually and asan officer, director, or owner of RAPID

PAGES, INC., and

ERNEST BAXTER a/k/a Ernest Baster

a1Va Carl Jenkins, individually, and as an

officer, director, manager, or owner of

YOUR YELLOW PAGES, lNC., CITYPAGES, INC. and RAPID PA GES, INC.,

Defendants.

FINAL JUDGM ENT AND ORDER FOR PERM ANENT INJUNCTION AND OTHER

EOUITABLE RELIEF AS TO DEFENDANT M PID PAGES. INC.

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Case 1:14-cv-22129-JEM Document 62 Entered on FLSD Docket 06/11/2015 Page 1 of 13

On June 9, 2014, Plaintiffs Federal Trade Commission and State of Florida filed their

Complaint For Permanent lnjunction And Other Equitable Relief in this matter pursuant to

Section 13(b) of the Federal Trade Commission Act (ESFTC Act''), 15 U.S.C. j 53(b), and Sedion

501.20441) of the Florida Deceptive and Unfair Trade Practices Act (StFDUTPA''), Fla. Stat.

j 501 .20441), 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 Motion for Entry ofDefault Judgment as to Defendant

Rapid Pages, Inc. (the tdMotion'') (ECF No. 471.

The Court has considered the Plaintiffs' M otion and supporting exhibits, as well as the

entire record in this matter, and hereby GRANTS Plaintiffs' M otion For Entry of Default

Judgment as to Defendant Rapid Pages, lnc. (ECF No. 471.

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED as follows:

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 501.20441) of the FDUTPA,

Fla. Stat. j 501.20441). 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 501.204(1) of the FDUTPA, Fla.

Stat. j 501.204(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 501.20342),

501.207, 501.2075, and 501.2077, Fla. Stat. jj 501.20342), 501.207, 501.2075 and 501 .2077 the

State of Florida has the authority to seek the relief contained herein.

This Court has jurisdiction over the subject matter of this case and personal

jurisdiction over the parties hereto.


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 501.20441) of the

FDUTPA, Fla. Stat. j 501.204(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 commerce'' as tscommerce'' 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 501.203(8), Fla. Stat. j 501.20348).

6. Defendant Rapid Pages was properly served with the Summons 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. 451.

7. The factual allegations 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 501.204(1) of the FDUTPA, Fla. Stat. j 501.204(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 501.20441) of the FDUTPA, Fla. Stat. j 501.204(1), by

falsely representing to consumers, expressly or by implication, that consumers 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 501.20441) of the FDUTPA, Fla. Stat. j 501.20441), by

falsely representing to consum ers, expressly or by implication, that the consum ers have agreed to

purchase a listing in Defendant's business directory.

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10. 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 501.204(1) of the FDUTPA, Fla. Stat. j 501.20441), by

falsely representing to consum ers, expressly or by implication, that the consum ers owe m oney to

Defendant for a listing in Defendant's business directory.

1 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. 501.201 et seq., and to enter equitable monetary relief against Defendant.

12. Defendant Rapid Pages, lnc., and its co-defendants, have received $6,098,763.42

USD from the conduct alleged in Plaintiffs' Complaint (ECF No. 11.

13. Plaintiffs are therefore entitled to equitable monetary relief against Defendant

Rapid Pages, lnc. in the nmount of $6,098,763.42 USD, for which Defendant is jointly mzd

severally liable.

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 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

Yellow Pages, and its successors, assigns, subsidiaries, and affiliates.

B. ''Person'' or Skpersons'' includes any individual, group, unincorporated

association, limited or general partnership, comoration, or other business entity.

C. çs-relemarketing'' means 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 call, whether or not covered by the Telemarketing Sales

Rule.

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BAN ON TELEM ARKETING

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 O N BUSINESS DIRECTORY AND ADV ERTISING 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, marketing, prom oting, offering for sale, or sale,

of business directory and advertising services, including website design, creation, maintenance,

and search engine optimization services.

111. PROHIBITION AGAINST M ISREPRESENTATIONS

IT IS FURTHER ORDERED THAT Defaulting Defendant, Defaulting Defendant's

officers, agents, servants, employees, and attomeys, 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 by means other than telemarketing, are permanently restrained and enjoined

from:

M isrepresenting, assisting others in misrepresenting, expressly or by

implication:

That a consumer has a preexisting relationship with Defendant or

any other Person;

That a consumer has agreed to purchase a good or service from

Defendant or any other Person;

That a consumer owes money 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;

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The purpose of any communication with a consumer; or

Any other fact material to consumers concem ing any good or

service, such as: the total costs; any material restrictions,

limitations, or conditions; or any material aspect of its

performance, efticacy, nature, or central characteristics.

lV. PROHIBITION AGAINST FAILING TO DISCLOSE


officers, agents, servants, employees, and attorneys, and a11 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',

The nature of the goods or services; and

The total cost to purchase, receive, or use the good or service; or

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, effcacy, nature, or central characteristics.

V.


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:

PROHIBITION AGAINST COLLECTING ACCOUNTS

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A. Attempting to collect or collecting payment for any listing in any business

directory or advertising service, including website design, creation, m aintenance, and search

engine optimization services, and

B. Selling, assigning, or otherwise transfening 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. M ONETARY JUDGM ENT

IT IS FURTHER ORDERED THAT:

Judgment in the amount of $6,098,763.42 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 $6,098,763.42 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.

All monies paid to Plaintiffs pursuant to this Order Cjoint 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. ln the event that the Commission determines that direct redress to

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

Defendant's practices alleged in the Complaint.

A11 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 Department of Legal Affairs Escrow Fund.

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Defaulting Defendant has no right to challenge any actions Plaintiffs or their

representatives may take pursuant to this Subsection.

VII. TURNOVER O F 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 fnancial institution, business entity, or person that holds, controls, or maintains 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 matter 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 Commission, 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 means, including, but not limited to, via

facsimile.

VIIl. UNCASH ED CH ECKS

IT IS FURTHER ORDERED THAT Defaulting Defendant relinquish dominion and a1l

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 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


officers, agents, servants, employees, and attom eys, and a11 other Persons in active concert or

-8-


participation with any of them, who receive actual notice of this 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. lf a representative of Plaintiffs requests in writing any

information related to redress, Defaulting Defendant must provide it in the form prescribed by

Plaintiffs, within 14 days;

B. Disclosing, using, or benefhting from customer information, including the name,

address, telephone number, email 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 customer information in a11 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 ACKNOW LEDGM ENTS

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, 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, Defaulting D efendant m ust deliver a copy of

this Order to: (1) a11 principals, offcers, directors, and LLC managers and members; (2) al1

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

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for current personnel. For

responsibilities.

al1 others, delivery must occur before they assume their

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

acknowledgment of receipt of this Order.

XI. COM PLIANCE REPORTING

IT IS FURTHER ORDERED THAT Defaulting Defendant makes timely submissions to

Plaintiffs'.

One year afler entry of this Order, Defaulting Defendant must submit

compliance report, sworn under penalty of perjury: Defaulting Defendant must: (a) identify the

primary physical, postal, and email address and telephone number, as designated points of

contact, which representatives of the Commission and State of Florida may use to communicate

with Defaulting Defendant; (b) identify a11 of Defaulting Defendant's businesses by a11 of their

names, telephone numbers, and physical, postal, email, 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

submitted to the Commission and the State of Florida

B. For 20 years after entry of this Order, Defaulting Defendant must submit 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, merger, sale, or dissolution of the entity of any

subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order.

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C. Defaulting Defendant must submit to Plaintiffs notice of the filing of any

bankruptcy petition, insolvency proceeding, or similar 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: '' 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 emailed to [email protected] 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 ,

W ashington, DC 20580. The subject line must begin: FTC v. Your Yellow Pages, Inc.,

X140032. A11 submissions to the State of Florida Office of the Attomey General must be sent to:

Rynnn Flack, Assistant Attorney General, Consumer Protection Division, Office of the Attorney

th Floor M iami FL 33131.General State of Florida, 444 Bricktll Avenue, 6 , ,

XII. RECORDK EEPING

IT IS FURTHER ORDERED THAT Defaulting Defendant must create certain records

for 20 years after entry of this Order, and retain each such record for 5 years. Specifically,

Defaulting Defendant must create and retain the following records:

accounting records showing the revenues from all goods or services sold;

B. persormel 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 consumer complaints and refund requests, whether received directly

or indirectly, such as through a third party, and any response;

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D. al1 records necessary to demonstrate full compliance with each provision of this

Order, including all subm issions to Plaintiffs; and

E. a copy of each unique advertisement or other marketing material.

XIIl. COM PLIANCE M ONITORING

IT IS ORDERED THAT, for the purpose of monitoring Defaulting Defendant's

compliance with this Order and any failure to transfer any assets as required by this Order:

A. W ithin 14 days of receipt of a written request from a representative of the

Plaintiffs, 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 conceming this Order, the Commission and State of Florida are

authorized to communicate directly with Defaulting Defendant. Defaulting Defendant 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 a11 other lawful means, including posing, tllrough their

representatives as consumers, 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 Commission'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 A SSET FREEZE

IT IS ORDERED THAT the freeze on the assets of Defaulting Defendant shall rem ain in

effect until the Com mission has received the total am ount required by Section VI above,

provided, however, that Defaulting Defendant may transfer funds to the extent necessary to make

a11 payments required by Section Vl above. Upon payment to the Commission of the total

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amount required by Section V1 above, the freeze against the assets of Defaulting Defendant shall

be lifted permanently.

XV. RETENTION O F JURISDICTION

IT IS ORDERED THAT this Court retains jurisdiction of this matter for pumoses of

construction, modification, and enforcement of this Order.

DONE AND ORDERED in Chambers at Miami, Florida, this )ö day of June, 2015

JOSE E. ARTINEZ

UNITE STATES DISTRICT JUDGE

Copies provided to:

M agistrate Judge Goodman

Al1 Counsel of Record

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