2 3 4
5 6
7 8 9 i0 II
PETER D. KEISLER
Assistant Attorney General
EUGENE M. THIROLF
Director, Office of Consumer Litigation
ALAN J. PHELPS
Trial Attorney, Office
of Consumer Litigation
Civil Division
United States Department
of Justice
!1331 Pennsylvania Ave.
NW, Suite 950N
!Washington, D.C. 20004
Telephone: (202) 307-6154 (202) 514-8742 Facsimile: E-mail: alan.phelps@usdoj.gov DEBP~ WONG YANG United States Attorney LEON W. WEIDMAN Chief, Civil Division MARCUS M. KERNER, CSB NO. 1070 Assistant United States 411 West 4th Street, Room 8000 Santa Ana,
CA 92701
Telephone:
(714) 338-3532
Facsimile:
(714) 338-3523
marcus.kerner@usdoj.gov
E-mail:
Attorneys
for Plaintiff Unlted States of America
12
13 14 15
IN THE UNITED 16
FOR THE 17
CENTRAL
STATES
DISTRICT
COURT
DISTRICT
OF CALIFOKNIA
WESTERN
DIVISION
18
19
UNITED STATES OF AMERICA, No. SA CV 05-1211 DOC (ANx)
2O
Plaintiff,
21 22 23
24
25 26 27 Plaintiffr notification Federal Trade and the United States of ~nerica, Attorney acting General upon
by the
has
and
DIRECTV, Inc., et al. AND OBDER FOR PERMAN~.NT
INJUNCTION A.GA.INST
~ I~ECORDS, IN~.,
AND MARK HARMON
authorization (’~FTC"
to the
Co~nission action
or the "Colmmlssion"), the complaint herein,
28
co[0K~enced
this
by filing
1 2
defendants service named
Nomrah
Records, and
Inc.,
and
Mark
Harmon
have
waived
above
appear
of the
summons
complaint. by the
Plaintiff attorneys of this of the
and the whose
3
4
defendants, have
represented agreed on the
names
hereafter,
to settlement joint motion as
action.
it is hereby
T~EREFORE, 6 7 8 9 I0 ii 12 13 14 Venue the i. parties This ORDE~D, ADJUDSED
parties,
~ DECI~EED
follows:
F]~ND~NGS
Court has jurisdiction to 28 U.S.C. ~§ 45(m) over the subject 1337(a), 56(a),
to Jurisdiction and
matter and
and
pursuant
~ 1331, 53(b), consent
1345,
1355,
and 15 U.S.C. 2. Plaintiff
(I) (A),
and Defendants
in this 3.
District.
of Defendants 4 of the consent are in or affecting
FTC Act, 15 U.S.C. ~ 44.
Nomrah
of the
The activities as defined By entering Inc. and Mark
com~erce, 4. Records, complaint 5.
in Section into this
15
16 17 18
order,
defendants,
Harmon,
do not
adm~it
any allegation
in this This have Inc.
action
order settles any claims that were raised
consent
19" or could 2O 21 22 23 24 Records, Sales
been and
raised Mark
by the for
plaintiff violations calls
against of the
Nomrah
Telemarketing
numbers on the
Harmon
Rule
based
on making Call
outbound [16
to phone 310.4(b)(i]
National and
Do Not
Registry i.e., within
C.F.R.~
(iii)(B]]
to a
greeting
(I) (iv)
abandoning
calls,
failing
to connect of the
the call completed
sales
representative
2 seconds
25
26 27
of the person 310.4(b) this (4)]
answering for
the call from
[16 C.F.R. October
~ 310.4(b) 17, 2003
the period
to the date
order.
28 //
2
6. granted 13(b),
The complaint against and
states under
a clai~n Sections
upon
which
relief
may be
Defendants, Federal
5(a),
5(m) (i)
Ac~ ("FTC Act"),
19 of the
Trade
Commission
U.S.C. ,~§ 45(a), 45(~n) (i) (A), 53(b),
5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27 28 right without fixtures, deliveries, contracts, located.
2. Harmon.
"Defendants" means Nomrah Records, Inc., and Mark
shall For the purpose and 7. Order Defendants for Permanent have entered into this ("Order") Stipulated freely they and have Judgment
without
read the
Injunction
coercion. provisions 8. otherwise 9. Defendants party and may under
Defendants of this
further Order and
acknowledge are prepared
that
to abide
by them.
or
Defendants challenge Defendants to seek the
hereby
waive the
all rights validity that this
to appeal of this
or contest have
Order.
not entitle
agreed
Order fees
does
or to obtain Access walve
attorneys’
as a prevailing
§ 2412,
fees that
Equal further
to Justice any rights
Act,
28 U.S.C.
Defendants arise under
to attorneys’
said provision of this Order
of law.
is in the public interest.
i0. Entry
DEFINITIONS
of this Order, the following definitions
apply:
I. "Asset" to, means any any legal or equitable interest in, or
or claim
real
or personal goods,
property,
including
equipment,
or other
limitation, general
chattels, intangibles, checks, shares
instruments, mail
leaseholds, notes,
inventory, receivables,
accounts, and all
credits,
cash, wherever
of stock,
l 2 3
3.
"’Representatives" means Defendants’ successors,
assigns, officers, agents, servants, employees, and those persons
in active concert or participation with them who receive actual
notice of this Order by personal service or otherwise.
5 6 7 8 9 I0 4. ¯ The "Telemarketing Sales Rule" or "Rule" means the FTC
P.ule entitled "Telemarketing Sales Rule," 16 C.F.K. § 310,
attached hereto as Appendix A.
5. "Customer" means any person who is or may be required
to pay for goods or services offered through telemarketing.
6. "’Person" means any individual, group, unincorporated
limited or general partnership, corporation, or
Ii association, 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27
other business entity.
7. "Telemarketing" means a plan, program, or campaign
which is conducted to induce the purchase of goods or services or
a charitable contribution, by use of one or more telephones and
telephone call. The term
which involves
more than one interstate
does not include the sollcitation a catalog which: conta±ns
of sales through the mailing of
or illustrat±on
a written description
of the goods or services offered for sale; includes the business
address of the seller; includes multiple pages of written
material or illustrations; and has been issued not less
frequently than once a year, when the person making the
solicitation does not solicit customers by telephone but only
receives calls initiated by customers in response to the catalog
and during those calls takes orders only without further
solicitation. For purposes of the previous sentence, the term
"further solicitation" with information
does not include providing the customer
to sell, any other item
about, or attempting
1 2
included in the same catalog which prompted the customer’s call or in a substantially 8. similar catalog.
"Seller" means any person who, in connection with a transaction, provides, offers to provide, or
4 5 6 7 8 9 I0 ii 12 13
telemarketing
arranges for others to provide goods or services to the customer in exchange for consideration, whether or not such person is
under the jurisdiction of the Federal Trade Commission. 9. ~’Telemarketer" means any person who, in connection with initiates or receives telephone calls to or from a
telemarketing,
customer or donor. 10. "National Do Not Call Registry" means the National Do Not Call Registry ~aintained by the Federal Trade Commission
pursuant to 16 C.F.R. ~ 310.4(b) (1) (iii) ii. ~Established business relationship" means a
15 16 17 18 19 20 21 22 23 24 25 26 27 28
relationship
between the seller and a person based on; (a) the
person’s purchase, rental, or lease of the seller’s goods or services or a financial transaction between the person and seller, within the eighteen (18) months immediately date of the telemarketing preceding the
call; or (b) the person’s inquiry
application regarding a product or service offered by the seller, within the three (3) months telemarketing call: ORDER PROHIBITION AGAINST ABUSIVE TE~TING PRACTICES immediately preceding date of a
IT IS ORDERED that, in connection with telemarketlng, Defendants restrained and their Representatives are hereby permanently
and enjoined from engaging in, causing other persons
// 5
i 2 3 4 5 6 7 8 9 l0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27 28
to engage in, or assisting other persons to engage in, violations
of the Telemarketing A. Sales Rule, including but not limited to:
Initiating any outbound telephone call to a any person
at a telephone number on the National Do Not Call Registry unless
the seller provides documentation demonstrating that:
(i) the seller has obtained
the express agreement,
writing, of such person to place calls to that person.
Such written agreement shall clearly evidence such
person’s authorization that calls made by or on behalf
of a specific party may be placed to that person, and
shall include the telephone number to which the calls
may be placed and the signature of that person; or
(2) the seller has an established business
relationship with such person and that person has not
previously stated that he or she does not wish to
receive outbound telephone calls ii{ade by or on behalf
of the seller; or
B. Initiating any outbound telephone call to a person when
stated that he or she does not wish to
that person has previously
receive an outbound telephone call made by or on behalf of the
seller whose goods or services are being offered or made by or on
behalf of the charitable contribution C. organization for which a charitable
is being solicited; or
Initiating any outbound telephone call to a telephone
number within a given area code without first paying the required
annual fee for access to the telephone nu~~bers within that area
code that are on the National Do Not Call Registry; and
//
6
1 2 3 4 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
D.
Abandoning any outbound telephone call to a person by
failing to connect the call to a live operator within two seconds of the person’s completed greeting, unless the following four conditions are met: i. abandonment Defendants employ’technology that ensures
of no more than three percent of all calls answered
by a person, measured per day per calling campaign; 2. Defendants for each telemarketing call placed,
allow the telephone to ring for at least fifteen seconds or four rings before disconnecting 3. an unanswered call;
Whenever a live operator is not available to speak
with the person answering the call within two seconds after the person’s completed greeting, the seller or telemarketer promptly
plays a recorded message that states the name and telephone number of the seller on whose behalf the call was placed; and 4. Defendants retain records, in accordance with 16
C.F.R. § 310.5 (b)-(d), establishing co[npliance with preceding three conditions; Provided, however, that if the Commission promulgates rule that modifies or supersedes the Telemarketing any
Sales Rule, in
whole or part, Defendants shall comply fully and completely with all applicable requirements date of any such rule. II. CIVIL PENALTY IT IS FURTHER ORDERED that: A. Judgment in the amount of FOUR HUNDRED THOUSAND, FIVE DOLLARS ($400,575) is hereby entered against AND RIGHT TO REOPEN thereof, on and after the effective
HUNDRED SEVENTY-FIVE 28
Defendants, as a civil penalty, pursuant to Section 5(m) (i) (A) 7
l 2 3 4 5 6 7 8 9 i0 II 12 13 14 15 16 17 18 19 2O 21 22 23 24
the Federal Trade Commission upon Defendants’
Act, 15 U.S.C. ~ 45(m)(i)(A}. in financial statements,
sworn representations
full payment for the foregoing judgment is suspended except for SEVENTY-FIVE THOUSAND DOLLARS ($75,000), contingent upon the accuracy and completeness forth in subparagraphs B, of the financial statements as set
E and F of this Paragraph.
Within five (5) days of receipt of notice of the entry
of this Order, Defendant Mark Harmon shall transfer SEVENTY-FIVE THOUSAND DOLLARS ($75,000) in the form of a wire transfer
certified or cashier’s check made payable to the Treasurer of the
United States. The check or written confirmation transfer shall be delivered Litigation, U.S. Department to: Director, of the wire
Office of Consumer
of Justice Civil Division, P.O. Box
the
386, Washington,
DC 20044. The cover letter accompanying
check shall include the title of this litigation and a reference
to DJ# 102-3316.
C. Cor~ission Defendants shall cooperate fully with Plaintiff and the
and its agents in all attempts to collect the amount
due pursuant to this Paragraph if Defendants fail to pay fully
the amount due at the time specified herein. In such an event,
Defendants agree to provide Flaintiff and the Co~llission with its
federal and state tax returns for the preceding two years, and to
complete new standard-form accurately financial disclosure forms fully and
within ten (I0) business days of receiving a request
or the Commission to do so. Defendants further
25
26 27 28
from Plaintiff
authorize Plaintiff and the Commission to verify all information
provided on the financial disclosure form of Defendants with all
//
1 2 3 4 5 6 7
appropriate institutions. D. B of this shall
third
parties,
including
but
not
limited
to financial
Upon
payment the
by Defendants remainder
as provided civil
in subparagraph penalty judgment
Paragraph,
of the
be suspended
subject
to the conditions
set forth
i[i
subparagraph E. premised
E of this Plaintiff’s
Paragraph. agreement to this accuracy, and Order is expressly of
upon
the
truthfulness, financial Commission,
and completeness supporting 31, upon Order. 2005, which
9 i0 ii 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Defendants’ submitted 8, 2006, relied motion
sworn to the
statements dated
documents and March
December
which
include
material and
information to this that
Plaintiff
in negotiating by Plaintiff, any
agreeing Court asset
If, upon have the failed value
this
finds
Defendants misstated related
to disclose of any asset
material
or materially statements and
in the
financial made
documents or
described omission described
above, in the above,
or has financlal then shall
any
other
material related
misstatement documents
statements Order
and
this
shall for the full
be reopened purpose
and suspension
of the judgment payment of civil less States
be lifted in the of all
of requiring judgment
penalty the s~n
amount
of the
($400,575), the United
amounts
paid to the Treasurer B of this this Paragraph. shall by the
pursuant that and
to subparagraph other
Provided, remain Court. F. hereby
however,
in all effect,
respects
Order ordered
in full
force
unless
otherwise
lh accordance required, and the unless FTC
with they
31 U.S.C. have done
N 7701,
Defendants
are to
so already,
to furnish
Plaintiff
its taxpayer
identifying
nudger(s)
(social
1
security be used
numbers for
or employer
identification and
nu~ers)
which
shall
2 3
4
purposes amount
of collecting out
reporting
on any with
delinquent
arising
of Defendants’
relationship
the government. G. Defendants filed agree that the facts as alleged as true in the in any to
6
7 8 9 I0 II 12 13 14
complaint subsequent enforce limited
in this
action
shall
be taken
litigation rights
filed pursuant
by Plaintiff to this
or the
Commission
their
Order,
including
but not
to a nondischargeability proceeding. Proceedings to, and not instituted in lieu of,
complaint
in any
subsequent
bankruptcy H. addition remedies
under any
this
Paragraph civil any
are in
other
or criminal other this
as may be provided that the
by law, may
including initiate
proceedings Order.
Plaintiff
to enforce
15
16 17
IT IS FURTHER from the date and
ORDERED
that
for
a period
of five and
(5) years their to the of with
18
19 2O 21 22 23 24
of entry assigns,
of this shall within
Order, maintain seven
Defendants, and (7} make days
successors Plaintiff a written the terms
available
or Co~nission, request,
of the receipt compliance
business
records
demonstrating
and provisions IV.
of this OF
Order. ORDER BY DEFENDANT AND
DISTRIBUTION
ACKNOWLEDGMENTS IT IS FURTHER and assigns, Order, owners, provide shall ORDERED within that thirty
OF RECEIPT Defendants, (30) days and their successors of this
25
26 27
of the
entry
a copy
of this
Order
with
Appendix
A to all of its as well as
28
principals,
members,
officers,
and
directors,
i0
1 2 3
managers,
agentS,
servants, authority from
employees, with respect
and
attorneys
having matter of
decision-making this Order;
to the subject a signed Order;
secure
each
such
person
statement within
acknowledging 5 6 7 8 9 i0 ii 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 ten with (i0) the days Court
receipt
of a copy with the
of this this
and shall, file
of complying and serve
Paragraph,
an affidavit a copy
Co~ission, for
by mailing Marketing Trade
thereof, Bureau of
to the
Associate
Director
Practices, 600 forth and
Consumer Ave., manner person
Protection, N.Wo,
Federal
Co~ission, setting the has name been
Pennsylvania the fact and
Washington, compliance, a copy
D.C.
20580,
of its
including Order
title
of each
to whom
of the
provided. V. NOTIFICATION IT IS I~RTHER successors Market±ng Commission, at least business, and OBDERED that O~ BUSINESS CHANGES and its Director Federal D.C. for Trade
each Defendant, the
assigns,
shall
notify
Associate Protection, Washington,
Practicesr 600
Bureau
of Consumer Ave., N.W.,
Pennsylvania (30) days but
20580,
thirty
prior
to any
change
in such
Defendant’s
including,
not limited and sale, the
to, which
merger, results
incorporation, in the emergence of a such
dissolution, of a successor subsidiary Defendant’s
assignment,
corporation, or any
creation change, Order.
or dissolution which
or parent, obligations VI.
other this
may affect
under
NOTIFICATION ORDERED years
O~ INDIVIDUAL’S that from for Defendant the date
AFFILIATION Mark Harmon shall, for
IT IS FUI%TI~ a period notify of ten
(I0)
of entry Practices,
of this 5ureau
Order, of
Associate
Direetor
Marketing Trade
28
Consumer
Protection,
Federal
Commission,
600 Pennsylvania
Ave., his
N.W.,
Washington, with
D.C.
20580,
within
thirty
{30) whose with the
days
of
affiliation
a new
business
or emplo~nent
activities business
include
telemarketing in which
or his affiliation his duties involve
a new. or
or employment for sale
sale
5 6
7 8 9 I0 II 12 13 14
offering
of satellite
progranuming. DEFENDANTS purposes are of compliance to
VII. IT IS ~TH]~R reporting, communicate
COMMUNIC~TIONWITH that for the
OI~DF~ED and with
Plaintiff directly
the Cormaisslon Defendants.
authorized
VIII. FEES ]h~’D XT IS FURTHER agrees to bear with its ORDF/{ED own costs that and each
COSTS party to this fees Order hereby in
attorneys’
incurred
connection
this
action. IX. SEVERABIL~TY that one the provisions If any remaining of this Order is are
15
16 17 18 19
IT IS ~URTHER separate stayed shall and
ORDE/%~D from
severable
another. the
provision provisions
or determined remain in full X.
to be invalid, force and
effect. OF JURISDICTION Court’shall retain
RETENTION that for
20
21 22 23 24
IT IS FURTHER jurisdiction modification
ORDERED matter
this
of this and
purposes
of construction,
enforcement XI.
of this
Order.
COMPLETE consent
SETTLEMENT to entry of the and that order the foregoing in this entry Order matter.
The parties which The shall
hereby
25
26 27 28
constitute further
a final
judgment and agree a full,
parties
stipulate
of the
foregoing settlement
Order
shall
constitute
complete
and final
of this
action.
12
1
J~D(~T against
IS T~EREFOI~E
EE~TEI%ED
in favor terms
of Plaintiff and
and
Defendants, above.
pursuant
to all the
conditlons
3 4
5
6
7
8
9
I0
Ii 12 13 14 15
16
17
18 19
2O
21
22 23 24
25
recited
FOR
THE DEFENDANTS:
FOR THE PLAINTIFF:
PETER D. KEISLER, JR.
Assistant Attorney General
Civil Division
U.S. DEPARTMENT OF JUSTICE
DEBRA W. YANG
United States Attorney
MARCUS M. KERNER
Assistant U.S. Attorney
Cove & Associates, P.A. 225 S. 21st Ave. Hollywood, FL 33020
(954) 921-I121
Attorney for Mark Harmon Nomrah Records, Inc, EUGENE M, THIROLF
Director
¯
~-~ of~ation 4,
¯ and~ Of~ ALaN\J, PHEL~
Trial 1 Attorney
Offic~ of Consumer Litigation
CivilDivision
U.S. Depa~ment of Justice
Washingto~2~0..
~ Director Marketing Practlces for
~
RUSSELL DEITCH
GARY IVENS
Attorneys, Federal Trade
Commission
600 Pennsylvania Ave, N.W.,
Washington, DC 20580
IT IS SO ORDERED.
27 28
DATE
UNITED STATES DISTRICT JUDGE
13
-"-
PART-3]O--TELEMA~K~N~$ALES RULE
91"d
376
’ (iv) ,Amy m~ter~a~,a~r~e~
.. ~romo~o~ ~olu~, but not to, the od~ o~ b~ ~bla to recei~ ~e, ~e ~e or v~de of ~e, or ~ a p~e ~ p~ent ~ req~ed p~epromo~on~
~t opp~ ~slu~,. bu~
s~p by, ~p~son. or gove~ent
.¯ (~) ~t ~y c~to~er ~e~ o~
~ve .o~on fe~e ~c~ ’ ~ted to, ~he ~ ~t the Cvo~d the oh~e(s),
~t
mot
~e ~te(s)
merits. ~d ~e s~eo~o s~eps ~e
tom~ m~t t~ to avoid
oh~ge(s). " " " (S) Oau~ b~ ~e~a~on
s~ed for p~t,’or coHec~ or
g~o~ or s~o~ or’~ ~bl~ con-
out’ ~e ousto~’aoz donor’s
~able ~o~on, ~ceRt when
~e ~ethod o! p~en~ ~ed ~. ~
c~d sub~ec~ ~o protec~d~ o~
~o~n ~ of
s~ ~e
be ds~d fo~ m~
v~ble’ ~ era
6]: "d
8E:~l9OS~-~’I-9FIU
Comrnl~lon.
381
33IJJO 2.3H~011~H SR
9~"d
3.-29-O4 Vo]. 69
No..60
Mar. 29, 2004
Rt~ASONS FOR SETTLEMENT This statement accompaniesthe final order executed by defendants Nomrah Records, Inc., and MarkHarmon.The final order enjoins defendants from violating the Telemarketing Sales Rule ("Rule"), 16 C.F.R. Part 310, including the National DoNot Call Registry provisions. It also requires the payment civil penalties. of Pursuant to Section 5(m)(3) of the Federal Trade Commission Act, as amended, U.S.C.§ 45(m)(3), the Commission hereby sets forth its reasons for settlement by entry Stipulated Judgment Order for Permanent and Injunction ("final order’’): Onthe basis of the allegations contained in the complaint, the Commission believes that a civil penalty of 5400,575constitutes the appropriate amounton whichto base the settlement. Giventhe defendants’ inability to pay, however,payment the fall civil penalty should be of suspendedexcept for $75,000, unless the defendants misrepresentedtheir financial condition to the Conunission.In addition, the injunctive provisions of the final order should assure the defendants’future compliance with the law. Finally, with the entry oft.he final order, the time and expenseof litigation will be avoided. For the foregoingreasons, the Coramission believes that the settlement by the entry of the attachedfinal order is justified mad well withinthe public interest.