Federal Trade Commission v. Emerica Media Corporation et al
Filing
288
ORDER as to Defendant Lane. Signed by Judge Dana L. Christensen on 6/28/2017. (ASG)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
FEDERAL TRADE COMMISSION,
CV 13-03-M-DLC
Plaintiff,
ORDER
vs.
AMERICAN EVOICE, LTD., EMERICA
MEDIA CORPORATION, FONERIGHT,
INC., GLOBAL VOICE MAIL, LTD.,
HEARYOU2, INC., NETWORK
ASSURANCE, INC., SECURATDAT,
INC., TECHMAX SOLUTIONS, INC.,
VOICE MAIL PROFESSIONALS, INC.,
STEVE V. SANN, TERRY D. LANE,
a/k/a TERRYD. SANN, NATHANM.
SANN, ROBERT M. BRAACH,
Defendants.
and
BIBLIOLOGIC, LTD.,
Relief Defendant.
Plaintiff Federal Trade Commission ("FTC" or "Commission") filed its
Complaint (Doc. 1) for a permanent injunction and other equitable relief in this
matter pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC
Act"), 15 U.S.C. § 53(b), against Defendants American eVoice, Ltd.; Emerica
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Media Corp.; FoneRight, Inc.; Global Voice Mail, Ltd.; HearYou2, Inc.; Network
Assurance, Inc.; SecuratDat, Inc.; Techmax Solutions, Inc.; Voice Mail
Professionals, Inc.; Steven V. Sann; Terry D. Lane (a/k/a Terry D. Sann); Nathan
M. Sann; and Robert M. Braach ("Defendants"); and Relief Defendant Bibliologic,
Ltd.
Plaintiff FTC and Defendant Terry D. Lane a/k/a Terry D. Sann ("Lane")
stipulate to the entry of this Stipulated Permanent Injunction ("Order") to resolve
all matters in dispute in this action between them.
THEREFORE, IT IS ORDERED as follows:
FINDINGS
1.
This Court has jurisdiction over this matter.
2.
The FTC's Complaint charges that Defendants engaged in deceptive
and unfair acts or practices in violation of Section 5 of the FTC Act,
15 U.S.C. § 45, by placing unauthorized charges on consumers'
telephone bills ("cramming").
3.
Defendant Lane neither admits nor denies any of the allegations in the
Complaint, except as specifically stated in this Order. Only for
purposes of this action, Defendant Lane admits the facts necessary to
establish jurisdiction.
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4.
Defendant Lane waives any claim that she may have under the Equal
Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution
of this action through the date of this Order, and agrees to bear her
own costs and attorney fees.
5.
Defendant Lane waives all rights to appeal or otherwise challenge or
contest the validity of this Order.
DEFINITIONS
For purposes of this Order, the following definitions shall apply:
1.
"Clearly and Conspicuously" means that a required disclosure is
difficult to miss (i.e., easily noticeable) and easily understandable by
ordinary consumers, including in all of the following ways:
a.
In any communication that is solely visual or solely audible, the
disclosure must be made through the same means through
which the communication is presented. In any communication
made through both visual and audible means, such as a
television advertisement, the disclosure must be presented
simultaneously in both the visual and audible portions of the
communication even if the representation requiring the
disclosure is made in only one means.
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b.
A visual disclosure, by its size, contrast, location, the length of
time it appears, and other characteristics, must stand out from
any accompanying text or other visual elements so that it is
easily noticed, read, and understood.
c.
An audible disclosure, including by telephone or streaming
video, must be delivered in a volume, speed, and cadence
sufficient for ordinary consumers to easily hear and understand
it.
d.
In any communication using an interactive electronic medium,
such as the Internet or software, the disclosure must be
unavoidable.
e.
The disclosure must use diction and syntax understandable to
ordinary consumers and must appear in each language in which
the representation that requires the disclosure appears.
f.
The disclosure must comply with these requirements in each
medium through which it is received, including all electronic
devices and face-to-face communications.
g.
The disclosure must not be contradicted or mitigated by, or
inconsistent with, anything else in the communication.
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h.
When the representation or sales practice targets a specific
audience, such as children, the elderly, or the terminally ill,
"ordinary consumers" includes reasonable members of that
group.
2.
"Corporate Defendants" means American eVoice, Ltd.; Emerica
Media Corp.; FoneRight, Inc.; Global Voice Mail, Ltd.; HearYou2,
Inc.; Network Assurance, Inc.; SecuratDat, Inc.; Techmax Solutions,
Inc.; Voice Mail Professionals, Inc., as well as any affiliates,
subsidiaries, successors, or assigns, and any fictitious business
entities or business names created or used by these entities, or any of
them.
3.
"Defendants" means the Individual Defendants and the Corporate
Defendants, individually, collectively, or in any combination.
4.
"Individual Defendants" means Steven V. Sann; Terry D. Lane
(a/k/a Terry D. Sann); Nathan M. Sann; and Robert M. Braach.
5.
"Person" means a natural person, an organization or other legal
entity, including a corporation, partnership, sole proprietorship,
limited liability company, association, cooperative, or any other group
or combination acting as an entity.
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ORDER
I. PROHIBITION AGAINST TELEPHONE BILLING
IT IS THEREFORE ORDERED that Defendant Lane is permanently
restrained and enjoined from placing charges on any person's telephone bill,
whether directly or through an intermediary, including by providing any
advertising, marketing, financial, or technical assistance to other persons to place
charges on any person's telephone bill.
II. PROHIBITION AGAINST BILLING WITHOUT AUTHORIZATION
IT IS FURTHER ORDERED that Defendant Lane and her 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, are permanently restrained and enjoined from (a)
representing or assisting others in representing, expressly or by implication, that a
consumer is obligated to pay any charge for goods or services, or (b) causing or
assisting others in causing any charge to be billed to a consumer's account, unless:
A.
the consumer provides express verifiable authorization to be charged;
and
B.
all material terms of the offer for which the consumer is billed,
including the number and amount of each charge and the account to
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which each charge will be billed, have been clearly and
conspicuously disclosed prior to the authorization of the charge and
in close proximity to any request that the consumer provide his or her
name, address, telephone number, email address, account number or
any other payment information.
III. PROHIBITION AGAINST USE OF CONSUMER INFORMATION
IT IS FURTHER ORDERED that Defendant Lane and her 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, are hereby restrained and enjoined from:
A.
disclosing, using, or benefitting from customer information, including
the name, 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, bank account, or
other financial account), that any Defendant obtained prior to entry of
this Order in connection with the placement of charges on consumers'
telephone bills; and
B.
failing to destroy such customer information in all forms in their
possession, custody, or control within 30 days after receipt of written
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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.
IV. MONETARY JUDGMENT AND PARTIAL SUSPENSION
IT IS FURTHER ORDERED that:
A.
Judgment in the amount of forty-one million, nine hundred ten
thousand, four hundred twenty-two dollars ($41,910,422) is hereby
entered in favor of the Commission against Defendant Lane, jointly
and severally, as equitable monetary relief, which shall be suspended,
subject to Sections IV.B through IV.D below.
B.
The Commission's agreement to the suspension of the monetary
judgment is expressly premised upon the truthfulness, accuracy, and
completeness of Defendant Lane's sworn financial statements and
related documents (collectively, "financial representations")
submitted to the Commission, namely:
1.
Declaration of Terry Lane a/k/a Terry Sann executed on March
31, 201 7, including attachments; and
2.
Testimony given by Terry Lane a/k/a Terry Sann in her
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deposition on September 14, 2016.
C.
The suspension of the judgment will be lifted as to Defendant Lane if,
upon motion by the Commission, the Court finds that Defendant Lane
failed to disclose any material asset, materially misstated the value of
any asset, or made any other material misstatement or omission in the
financial representations identified above.
D.
If the suspension of the judgment is lifted as Defendant Lane, the
judgment becomes immediately due as to her in the amount specified
in Section IV.A above (which the parties stipulate, only for purposes
of this Section, represents the consumer injury alleged in the
Complaint), less any payments previously made pursuant to this
Section, plus interest computed from the date of entry of this Order.
V. ADDITIONAL MONETARY PROVISIONS
IT IS FURTHER ORDERED that:
A.
Defendant Lane relinquishes dominion and all legal and equitable
right, title, and interest in all assets transferred pursuant to this Order
and may not seek the return of any assets.
B.
The facts alleged in the Complaint will be taken as true, without
further proof, in any subsequent civil litigation by or on behalf of the
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Commission, including in a proceeding to enforce its rights to any
payment or monetary judgment pursuant to this Order, such as a
nondischargeability complaint in any bankruptcy case.
C.
The facts alleged in the Complaint establish all elements necessary to
sustain an action by the Commission pursuant to Section 523(a)(2)(A)
of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order
will have collateral estoppel effect for such purposes.
D.
Defendant Lane acknowledges that her Taxpayer Identification
Numbers (Social Security Numbers or Employer Identification
Numbers), which Defendant Lane previously submitted to the
Commission, may be used for collecting and reporting on any
delinquent amount arising out of this Order, in accordance with 31
u.s.c. § 7701.
E.
All money paid to the Commission pursuant to this Order may be
deposited into a fund administered by the Commission or its designee
to be used for equitable relief, including consumer redress and any
attendant expenses for the administration of any redress fund. If a
representative of the Commission decides that direct redress to
consumers is wholly or partially impracticable or if money remains
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after redress is completed, the Commission may apply any remaining
money for such other equitable relief (including consumer
information remedies) as it determines to be reasonably related to
Defendants' practices alleged in the Complaint. Any money not used
for such equitable relief is to be deposited into the U.S. Treasury as
disgorgement. Defendant Lane has no right to challenge any actions
the Commission or its representatives may take pursuant to this
Section V.E.
VI. LIFTING OF ASSET FREEZE
IT IS FURTHER ORDERED that the freeze imposed on Defendant Lane's
assets pursuant to the Stipulated Preliminary Injunction entered on May 8, 2013
(Doc. 55) is hereby dissolved.
VII. COOPERATION
IT IS FURTHER ORDERED that Defendant Lane must fully cooperate
with representatives of the Commission in this case and in any investigation
related to or associated with the transactions or the occurrences that are the subject
of the Complaint. Defendant Lane must provide truthful and complete
information, evidence, and testimony. Defendant Lane must appear for interviews,
discovery, hearings, trials, and any other proceedings that a Commission
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representative may reasonably request upon 5 days written notice, or other
reasonable notice, at such places and times as a Commission representative may
designate, without the service of a subpoena.
VIII. ORDER ACKNOWLEDGMENTS
IT IS FURTHER ORDERED that Defendant Lane obtains
acknowledgments of receipt of this Order.
A.
Defendant Lane, within 7 days of entry of this Order, must submit to
the Commission an acknowledgment of receipt of this Order sworn
under penalty of perjury.
B.
For 5 years after entry of this Order, Defendant Lane, 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) all employees, agents, and representatives
who participate in activity relating to the placement of charges on
consumers' telephone bills; and (3) any business entity resulting from
any change in structure as set forth in the Section IX below. Delivery
must occur within 7 days of entry of this Order for current personnel.
For all others, delivery must occur before they assume their
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responsibilities.
C.
From each individual or entity to which Defendant Lane delivered a
copy of this Order, Defendant Lane must obtain, within 30 days, a
signed and dated acknowledgment of receipt of this Order.
IX. COMPLIANCE REPORTING
IT IS FURTHER ORDERED that Defendant Lane makes timely
submissions to the Commission.
A.
One year after entry of this Order, Defendant Lane must submit a
compliance report, sworn under penalty of perjury.
1.
Defendant Lane must:
a.
identify all of her telephone numbers and all of her
physical, postal, email and Internet addresses, including
residences;
b.
identify the primary physical, postal, and email address
and telephone number, as designated points of contact,
which representatives of the Commission may use to
communicate with her;
c.
identify all of her business activities, including any
business for which she performs services whether as an
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employee or otherwise and any entity in which she has
any ownership interest;
d.
identify all of her businesses by all of their names,
telephone numbers, and physical, postal, email, and
Internet addresses;
e.
describe in detail her involvement in each such business,
including title, role, responsibilities, participation,
authority, control, and any ownership;
f.
describe the activities of each business, including the
goods and services offered, the means of advertising,
marketing, sales, methods of payment, and the
involvement of any other Defendant (which Defendant
Lane must describe if she knows or should know due to
her own involvement);
g.
describe in detail whether and how she is in compliance
with each Section of this Order; and
h.
provide a copy of each Order Acknowledgment obtained
pursuant to this Order, unless previously submitted to the
Commission.
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B.
For 10 years after entry of this Order, Defendant Lane must submit a
compliance notice, sworn under penalty of perjury, within 14 days of
any change in the following:
1.
any designated point of contact;
2.
name, including aliases or fictitious name, or residence address;
3.
title or role in any business activity, including any business for
which she performs services whether as an employee or
otherwise and any entity in which she has any ownership
interest, and identify the name, physical address, and any
Internet address of the business or entity.
4.
the structure of any entity that she 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 or any subsidiary,
parent, or affiliate that engages in any acts or practices subject
to this Order;
C.
Defendant Lane must submit to the Commission notice of the filing of
any bankruptcy petition, insolvency proceeding, or similar proceeding
by or against her within 14 days of its filing.
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D.
Any submission to the Commission 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 [date] at [location]."
and supplying the date, location, signatory's full name, title (if
applicable), and signature.
E.
Unless otherwise directed by a Commission representative in writing,
all submissions to the Commission pursuant to this Order must be
emailed to DEbrief@ftc.gov (with "FTC v. American eVoice,
X130020" in the subject line) 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
RE: FTC v. American eVoice, X130020
X. RECORDKEEPING
IT IS FURTHER ORDERED that Defendant Lane must create certain
records for 10 years after entry of this Order, and retain each such record for 5
years. Specifically, Defendant Lane, for any business that she, individually or
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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 all goods or services
sold or billed;
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; 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 the Commission;
and
E.
a copy of each unique advertisement or other marketing material.
XI. COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for purposes of monitoring Defendant
Lane's compliance with this Order, including the financial representations
identified in Section IV .B:
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A.
Within 14 days of receipt of a written request from a representative of
the Commission, Defendant Lane must: submit additional
compliance reports or other requested information, which must be
sworn under penalty of perjury; appear for depositions; and produce
documents for inspection and copying. The Commission is 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 is authorized to
communicate directly with Defendant Lane. Defendant Lane must
permit representatives of the Commission to interview any employee
or other person affiliated with any Defendant who has agreed to such
an interview. The person interviewed may have counsel present.
C.
The Commission may use all other lawful means, including posing,
through its representatives as consumers, suppliers, or other
individuals or entities, to Defendant Lane or any individual or entity
affiliated with Defendant Lane, 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
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Act, 15 U.S.C. §§ 49, 57b-1.
XII. RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court retains jurisdiction of this
matter for purposes of construction, modification, and enforcement of this Order.
DATED this 28th day of June, 2017.
Dana L. Christensen, Chief istrict Judge
United States District Court
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SO STIPULATED AND AGREED:
FOR PLAINTIFF FEDERAL TRADE COMMISSION:
Date:- - - - - RICHARD McKEWEN, WSBA #45041
Federal Trade Commission
Northwest Regional Office
915 Second Ave., Suite 2896
Seattle, WA 98174
Phone: 206-220-6350
Fax: 202-220-6366
E-mail: rmckewen@ftc.gov
Counsel for Plaintiff Federal Trade Commission
FOR DEFENDANT TERRY D. LANE a/k/a TERRY D. SANN
TERRY D. LANE a/k/a TERRY D. SANN,
individually
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Date:- - - - - -
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