UNITED STATES DISTRICT COURT FOR THE SOUTHERN … · 2018-07-19 · UNITED STATES DISTRICT COURT...

UNITED STATES DISTRICT COURT FOR THESOUTHERN DISTRICT OF FLORIDA

M iami Division

Case Num ber: 14- ZZIZ9-CIV-M ARTINEZ-G OODM AN

FEDEM L TRADE COM M ISSION and

STATE OF FLORIDA,

Plaintiffs,

VS.

YOUR YELLOW PAGES, lNC., a Florida

corporation, also doing business as EBSCOLLECTIONS,

RAPID PAGES, lNC., a Florida

coporation, also doing business as RAPIDYELLOW PAGES,

CITY PAGES, lNC., a Florida corporation,also doing business as CITY YELLOW

PAGES and ONLW E CITY YELLOW

PAGES,

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 as

an officer, director, or owner of RAPID

PAGES, lNC., and

ERNEST BAXTER a/k/a Ernest BasteralVa Carl Jenkins, individually, and as an

officer, director, manager, or owner of

YOUR YELLOW PAGES, IN C., CITY

PAGES, IN C. and RAPID PAGES, lNC.,

Defendants.

FINAL JUDGM ENT AND ORDER FO R PERM ANENT INJUNCTION AND OTH ER

EQUITABLE RELIEF AS TO DEFENDANT ANDREW BEITLER

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Case 1:14-cv-22129-JEM Document 63 Entered on FLSD Docket 06/11/2015 of 13

On June 9, 2014, Plaintiffs Federal Trade Commission ($1FTC'') and State of Florida filed

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

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

501.204(1) of the Florida Dtdeptive and Unfair Trade Practices Act (tSFDUTPA''), Fla. Stat.

j 501.204(1), against: Your Yellow Pages, Inc., Rapid Pages, lnc., City Pages, lnc., Donovan B.

Hinds, Andrew Beitler, and Ernest Baxter. (ECF No. 1j

Defendant Andrew Beitler filed his answer to the Complaint on September 9, 2014. (ECF

No. 321. On February 23, 2015, Plaintiffs FTC and State of Florida filed their Motion for

Summary Judgment as to Defendant Beitler. (ECF No. 481. On March 16, 2015, the Court

entered an Order to Show Cause (ECF No. 571, ordering Defendant Beitler to file a response to

the Motion for Summary Judgment or to show cause as to why the M otion for Summary

Judgment should not be granted by default. Id Defendant Beitler failed to file a response to the

M otion for Summary Judgment, and on M arch 26, 2015, the Court granted Plaintiffs' M otion for

Summary Judgment as to Defendant Beitler, stating that Final Judgment would be entered by

separate order. (ECF No. 581. The Court has considered Plaintiffs' Motion for Summary

Judgment and supporting exhibits, as well as the entire record in this matter, and having already

granted Plaintiffs' M otion for Summary Judgment, IT IS THEREFORE ORDERED,

ADJUDGED, AND DECREED as follows:

FINDINGS

This is an action by the FTC under Sections 5(a) and 13(b) of the FTC Act, 151.

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 .204(1). Plaintiffs' Complaint (ECF No. 1) seeks permanent injunctive relief

against Defendant Beitler in comwction with his 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 501.20441) 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

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Sections 501.20342), 501.207, 501.2075, and 501.2077, Fla. Stat. jj 501.203(2), 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. IJ states claims upon which relief may be

granted under Sections 5(a) the FTC Act, 15 U.S.C. j 45(a), and Section 501.204(1) of the

FDUTPA, Fla. Stat. j 501.204(1).

4. Venue in the United 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 Beitler are tsin or affecting commerce'' as Sçcommerce''

is defined in Section 4 of the FTC Act, 15 U.S.C. j 44, and as Estrade or commerce'' is defined in

Florida Statutes Section 501.203(8), Fla. Stat. j 501.20348).

Defendant Beitler was properly served with the Summons and Complaint in this

matter, and Defendant Beitler filed his Answer on September 9, 2014. (ECF No. 32). Defendant

Beitler failed to respond to Plaintiffs' Motion for Summary Judgment after the Court entered its

show cause order, and Defendant Beitler had previously stated that he would not respond to the

Motion, iigiln order to continue to assert and preserve his rights under the Fifth Amendment of

the United States Constitution.'' (ECF No. 541.

The factual allegations in Plaintiffs' Statement of Undisputed Material Facts (ECF

No. 48) are therefore taken as true against Defendant Beitler. Those allegations and the evidence

supporting them establish that Defendant Beitler 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 Beitler 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 501.204(1), by falsely representing

to consumers, expressly or by implication, that consumers have a preexisting business

relationship with the defendants.


9. The Court further finds that, in connection with the offering for sale or sale of



to consumers, expressly or by implication, that the consumers have agreed to purchase a listing

in the defendants' business directory.

10. The Court further finds that, in connection with the offering for sale or sale of



to consumtrs, txpressly or by implication, that the consumers owe money to tht dtfendants for a

listing in the defendant's business directory.

1 1 . It is proper in this case to enter a permanent injunction to prevent a recurrence of

Defendant Beitler'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 Beitler.

12. Defendant Beitler and his co-defendants have received $6,098,763.42 USD from

the conduct alleged in Plaintiffs' Complaint (ECF No. 1).

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

Beitler in the nmount of $6,098,763.42 USD, for which Defendant Beitler is jointly and severally

liable.

Entry of this Order is in the public interest.

DEFINITIONS

For pum oses of this Order, the following definitions apply:

A. i'Defendant'' or çiDefendant Beitler'' means Andrew Beitler, and his successors,

B.

agents, or assigns.

S'Person'' or dtpersons'' includes any individual, group, tmincorporated

association, lim ited or general partnership, corporation, or other business entity.

iiTelemarketing'' means any plan, program, or campaign which is conducted toC.

induce the purchase of goods or services or a chmitable contribution by use of one or more

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telephones, and which involves a phone call, whether or not covered by the Telemarketing Sales

Rule.

1. BAN ON TELEM ARKETING

IT IS ORDERED THAT Defendant Beitler, whether acting directly or tllrough an

intermediary, is pennanently restrained and enjoined from Telemarketing, or from assisting

others engaged in Telemarketing.

II. BAN ON BUSINESS DIRECTORY AND ADVERTISING SERVICES

IT IS FURTHER ORDERED THAT Defendant Beitler, whether acting directly or

indirectly, is 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.

111. PROHIBITION AGAINST M ISREPRESENTA TIONS

IT IS FURTHER ORDERED THAT Defendant Beitler, Defendant Beitler's agents,

employees, and attorneys, and al1 other Persons in active concert or participation with any of

them, who receive actual notice of this Order, whether acting directly or indirectly, in cormection

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:

A. M isrepresenting, or 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 consum er owes m oney to Defendant or any other Person for

any good or service;


4.

5.

6.

The nature of Defendant's or any other Person's relationship with a

consum er;

The purpose of any communication with a consumer; 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.

IV. PRO HIBITIO N AGAINST FAILING TO DISCLOSE


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:

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

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


employees, attorneys, and assigns, 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, are

permanently restrained and enjoined from:

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

creation, maintenance, and searchdirectory or advertising service, including website design,

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 Defendant Beitler, jointly and severally, as equitable monetary relief.

B. Defendant Beitler 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.

A11 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 detennines 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.

D. A11 joint funds not used for the equitable relief described in Paragraph C of this

Section (dsremaining 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 disgorgem ent and half to be

deposited to the State of Florida Department of Legal Affairs Escrow Fund.


E. Defendant Beitler has no right to challenge any actions Plaintiffs or their

representatives may take pursuant to this Subsection.

VIl. TURNOVER OF ASSETS HELD BY TH IRD PARTIES

IT IS FURTHER ORDERED THAT:

A. ln 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 Defendant Beitler, or any aceount 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, and/or (b) the Stipulated Preliminary

lnjunction Order as to Defendant Beitler, entered June 23, 20 l4, shall ttu.n 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.

VIII. UNCASHED CHECKS

IT IS FURTHER ORDERED THAT Defendant Beitler relinquish dominion and a11 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 Defendant's sale of

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

search engine optimization services. Defendant Beitler 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.

lX. CUSTOM ER INFO RM ATIO N


employees, and attorneys, and a11 other Persons in active concert or participation with any of

them, who receive actual notice of this Order are permanently restrained and enjoined from

directly or indirectly:

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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, Defendant Beitler must provide it, in the form prescribed by

Plaintiffs, within 14 days;

B. Disclosing, using, or benetkting from customer information, including the nnme,

address, telephone number, email address, Social Security number, other identifying information,

or any data that enables access to a customer's account (including a credit card, brmk account, or

other financial account) that Defendant Beitler 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 al1 forms in their possession,

custody, or control within 30 days aher 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 Defendant Beitler obtains acknowledgments of

receipt of this Order:

A. Defendant Beitler, 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, Defendant Beitler for any business that he,

individually or collectively with any other defendants, is the majority owner or controls directly

or indirectly, must deliver a copy of this Order to: (1) all principals, officers, directors, and LLC

managers and members; (2) a11 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

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within 7 days of entry of this Order for current personnel.

before they assum e their responsibilities.

For al1 others, delivery must occur

From each individual or entity to which Defendant Beitler delivered a copy of this

Order, Defendant Beitler must obtain, within 30 days, a signed and dated acknowledgment of

receipt of this Order.

XI. COM PLIANCE REPORTING

IT IS FURTHER ORDERED THAT Defendant Beitler makes timely submissions to

Plaintiffs'.

One year after entry of this Order, Defendant Beitler must submit a compliance

report, sworn under penalty of perjury: Defendant Beitler must: (1) identify a1l telephone

numbers and al1 physical, postal, email and Internet addresses, including all residences; (2)

identify a11 business activities, including any business for which Defendant Beitler performs

services whether as an employee or otherwise and any entity in which Defendant Beitler has any

ownership interest; and (3) describe in detail Defendant Beitler's involvement in each such

business, including title, role, responsibilities, participation, authority, control, and any

ownership; (4) identify the primary physical, postal, and email address and telephone number, as

designated points of contact, which representatives of the Plaintiffs may use to communicate

with Defendant Beitler; (5) identify a11 of Defendant Beitler's businesses by al1 of their names,

telephone numbers, and physical, postal, email, and Internet addresses; (6) describe the activities

of each business, including the goods and services offered, the means of advertising, marketing,

and sales, and the involvement of any other defendant (which Defendant Beitler must describe if

he knows or should know due to his own involvement); (7) describe in detail whether and how

Defendant Beitler is in compliance with each Section of this Order; and (8) provide a copy of

each Order Acknowledgm ent obtained pursuant to this Order, unless previously subm itted to the

Com mission.

B. For 20 years after entry of this Order, Defendant Beitler must submit a

compliance notice, sworn under penalty of perjury, within 14 days of any change in the

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following: (1) name, including aliases or fictitious nnme, or residence address; (2) title or role in

any business activity, including any business for which Defendant Beitler performs services

whether as an employee or otherwise and any entity in which Defendant Beitler has any

ownership interest, and identify the name, physical address, and any lnternet address of the

business or entity; (3) any designated point of contact; or (4) the structure of any corporate

defendant or any entity that Defendant Beitler 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, parents or affiliate that engages in any

acts or practices subject to this Order.

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

petition, insolvency proceeding, or similar proceeding by or against Defendant Beitler within 14

days of its filing.

D. Any submission to Plaintiffs required by this Order to be swom tmder penalty of

perjury must be true and accurate and comply with 28 U.S.C. j 1746, such as by concluding:

i$I declare under penalty of perjtlry 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, a11 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 ,

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

X 140032. A1l subm issions to the State of Florida Oftice of the Attorney General m ust be sent to:

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

1 State of Florida, 444 Brickell Avenue, 6th Floor, M iam i, FL 33131.Genera

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XII. RECORDKEEPING

IT IS FURTHER ORDERED THAT Defendant Beitler must create certain records for 20

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

Beitler for any business that Defendant Beitler, individually or collectively with any other

defendants, is a majority owner or controls directly or indirectly, must create and retain the

following records:

A. accounting records showing the revenues from a11 goods or services sold;

B. personnel records showing, for each person providing services, whether as an

employee or otherwise, that person's nnme; addresses; telephone numbers; job title or position;

dates of service; and (if applicable) the reason for termination;

records of a11 consumer complaints and reftmd requests, whether received directly

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

D. a11 records necessary to demonstrate full compliance with each provision of this

Order, including all submissions to Plaintiffs; and

a copy of each unique advertisement or other marketing material.

XIII. COM PLIANCE M ONITORING

IT IS ORDERED THAT, for the purpose of monitoring Defendant Beitler'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 m itten request from a representative of the

Plaintiffs, Defendant Beitler 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 Defendant Beitler. Defendant Beitler must permit

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representatives of Plaintiffs to interview any employee or other person affiliated with him who

has agreed to such an interview. The person interviewed may have counsel present.

Plaintiffs may use a11 other lawful means, including posing, through their

representatives as consumers, suppliers, or other individuals or entities, to Defendant Beitler or

any individual or entity affiliated with Defendant Beitler, without the necessity of identifcation

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.

Upon written request from a representative of the FTC or State of Florida, any

consumer reporting agency must furnish consumer reports concerning Defendant Beitler,

pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. j1681b(a)(1)

XIV. LIFTING O F ASSET FREEZE

IT IS ORDERED THAT the freeze on the assets of Defendant Beitler shall remain in

effect until the Commission hms received the total nmotmt required by Section VI above,

provided, however, that Defendant Beitler may transfer funds to the extent necessary to make a11

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

required by Section Vl above, the f'reeze against the assets of Defendant Beitler shall be lifted

pennanently.

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 Minmi, Florida, this 1ô day of June, 2015

' fJOSE . M ARTINEZUNIT STATES DISTRICT JUDGE

Copies provided to:

M agistrate Judge Goodm anAll Counsel of Record

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UNITED STATES DISTRICT COURT FOR THE SOUTHERN … · 2018-07-19 · UNITED STATES DISTRICT COURT...

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