Case No. 3:04-cv-897-J-32MMH.
October 4, 2004
PRELIMINARY INJUNCTION ORDER
On September 15, 2004, Plaintiff Federal Trade Commission ("FTC" or "Commission"), filed its complaint for a permanent injunction and other relief in this matter pursuant to Section 7(a) of the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 ("CAN-SPAM Act"), 15 U.S.C. § 7706(a), Sections 13(b) and 19 of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b) and 57b, and Section 4(a) of the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. § 6103(a), and moved ex parte for a temporary restraining order pursuant to Rule 65 of the Federal Rules of Civil Procedure. On September 17, 2004, following an ex parte hearing held on September 16, 2004 at which Plaintiff appeared, this Court, having considered the Complaint, memorandum of law, declarations, and other exhibits filed in support of Plaintiff's motion, issued a temporary restraining order.
The FTC and Defendants Gregory Bryant and Nadira Bryant have agreed to entry of the following Stipulated Preliminary Injunction without further adjudication or findings other than as contained herein.
1. This Court has jurisdiction over the subject matter of this case, and it has jurisdiction over all the parties;
3. There is good cause to believe that Defendants, Gregory Bryant and Nadira Bryant, have engaged and are likely to engage in acts and practices that violate Section 5(a) of the CAN-SPAM Act, 15 U.S.C. § 7704(a), Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and the Telemarketing Sales Rule ("TSR"), 16 C.F.R. Part 310, and that Plaintiff is therefore likely to prevail on the merits of this action;
4. There is good cause to believe that immediate and irreparable damage to the Court's ability to grant effective final relief will occur from the
sale, transfer, or other disposition or concealment by Defendants of their assete or business records unless Defendants are immediately restrained and enjoined by Order of this Court. The evidence set forth in the Commission's Motion for Temporary Restraining Order With Asset Freeze and Expedited Discovery, and Order to Show Cause Why a Preliminary Injunction Should Not Be Entered, and in the accompanying declarations and exhibits, shows a substantial likelihood that the Commission will be able to prove that Defendants have engaged in a concerted course of illegal activity in their dealings with consumers nationwide in connection with the marketing and sale of business opportunities in violation of Section 5(a) of the CAN-SPAM Act, 15 U.S.C. § 7704(a), Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), Sections 310.3 and 310.4 of the TSR, 16 C.F.R. §§ 310.3 and 310.4. The evidence further shows that the defendants previously have engaged in efforts to conceal their identities. Thus, there is good cause to believe that Defendants will attempt to conceal the scope of their illegal actions to avoid returning their ill-gotten gains to consumers injured by their unlawful practices, if not restrained from doing so by Order of this Court;
5. Weighing the equities and considering Plaintiff's likelihood of ultimate success, a preliminary injunction requiring the defendants to halt their unlawful conduct and preserve their records and ordering other equitable relief is in the public interest;
6. Prior to the commencement of this case and on August 18, 2004, Defendant Gregory Bryant filed a voluntary petition for relief under the debt adjustment provisions of Chapter 13 of the Bankruptcy Code, 11 U.S.C. § 101, et seq., in the United States Bankruptcy Court for the Middle District of Florida, Case No. 04-08486-JAF. The FTC first received notice of Defendant's bankruptcy case on September 20, 2004. The FTC's action against Defendant Gregory Bryant, including the enforcement of a judgment other than a money judgment, is not stayed by 11 U.S.C. § 362(a) because it is an exercise of the FTC's police or regulatory power as a governmental unit pursuant to 11 U.S.C. § 362(b)(4) and thus falls within an exemption to the automatic stay. In light of Defendant Gregory Bryant's Chapter 13 filing, the Commission, on September 22, 2004, asked the Court to lift the freeze on Gregory Bryant's assets contained in the Temporary Restraining Order. The Court amended the Temporary Restraining Order by Order dated September 23, 2004.
7. Fed.R.Civ.P. 65(c) does not require security of the United States or an officer or agency thereof;
8. By this stipulation, Defendants Gregory and Nadira Bryant waive their right to a Preliminary Injunction hearing before this Court; and
9. The Court's entry of this Stipulated Preliminary Injunction does not represent a finding that the Defendants have violated the law as alleged in the Commission's complaint or have taken the actions complained of herein;
For the purpose of this Stipulated Preliminary Injunction, the following definitions shall apply:
A. "Asset" or "Assets" means any legal or equitable interest in, right to, or claim to any real or personal property of any Defendant, or held for the benefit of any Defendant, including, but not limited to, "goods," "instruments," "equipment," "fixtures," "general intangibles," "inventory," "checks," or "notes" (as these terms are defined in the Uniform Commercial Code), and all chattels, leaseholds, contracts, mails or other deliveries, shares of stock, lists of consumers, accounts, credits, receivables, and cash, wherever located;
B. "Business Opportunity" means any program, plan, product, or service that enables or purports to enable a participant or purchaser to earn money;
C. "Commercial electronic mail message" means any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including the content on an Internet website operated for commercial purposes);
D. "Defendants" means Gregory Bryant, Jr. and Nadira Bryant, individually and d/b/a Gregory Bryant Associates, Dove Marketing Corporation, GBA Publishing, Inc., GBA Financing, Network Marketing, and DM Marketing Services, as well as their officers, agents, directors, servants, employees, salespersons, independent contractors, attorneys, distributors, corporations, subsidiaries, affiliates, successors, assigns, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any trust, corporation, subsidiary, division, or other device, or any of them, unless specified otherwise;
E. "Document" is synonymous in meaning and equal in scope to the usage of the term in Fed.R.Civ.P. 34(a), and includes writings, drawings, graphs, charts, photographs, audio and video recordings, computer records, and other data compilations from which information can be obtained and translated, if necessary, into reasonably usable form through detection devices. A draft or non-identical copy is a separate document within the meaning of the term;
F. "Electronic mail message" (or "e-mail") means a message sent to a unique electronic mail address;
G. "Electronic mail address" means a destination, commonly expressed as a string of characters, consisting of a unique user name or mailbox (commonly referred to as the "local part") and a reference to an Internet domain (commonly referred to as the "domain part"), whether or not displayed, to which an electronic mail message can be sent or delivered;
H. "Express verifiable authorization" means any of the verification methods provided in Section 310.3(a)(3) of the TSR, 16 C.F.R. § 310.3(a)(3)(i)-(iii);
I. "Header information" means the source, destination, and routing information attached to an electronic mail message, including the originating domain name and originating electronic mail address, and any other information that appears in the line identifying, or purporting to identify, a person initiating the message;
J. "Initiate," when used with respect to a commercial e-mail message, means to originate or transmit such message or to procure the origination or transmission of such message;
K. "Materially," when used with respect to header information, includes the alteration or concealment of header information in a manner that would impair the ability of an Internet access service processing the message on behalf of a recipient, a person alleging a violation of this section, or a law enforcement agency to identify, locate, or respond to a person who initiated the electronic mail message or to investigate the alleged violation, or the ability of a recipient of the message to respond to a person who initiated the electronic message;
L. "Procure," when used with respect to the initiation of a commercial e-mail message, means intentionally to pay or provide other consideration to, or induce, another person to initiate such a message on one's behalf;
M. "Protected computer," when used with respect to the initiation of a commercial e-mail message, means a computer which is used in interstate or foreign commerce or communication, including a computer located outside the United States that is used in a manner that affects interstate or foreign commerce or communication of the United States.
N. "Referring to" or "relating to" means discussing, describing, reflecting, containing, involving, analyzing, studying, reporting, commenting, evidencing, constituting, setting forth, considering, recommending, concerning, or pertaining to, in whole or in part;
O. "Telemarketing" shall mean any business activity, whether or not covered by the Telemarketing Sales Rule, 16 C.F.R. Part 310, that involves attempts to induce consumers to purchase goods, services, or business opportunities, by means of inbound or outbound telephone calls, either exclusively or in conjunction with other forms of marketing; and
P. "Transactional or relationship message," shall be defined according to the definition provided in Section 3(17) of the CAN-SPAM Act, 15 U.S.C. § 7702(17).
CONDUCT PROHIBITIONS I. PROHIBITION AGAINST VIOLATING THE CAN-SPAM ACT
IT IS THEREFORE ORDERED that Defendants are hereby preliminarily restrained and enjoined from violating, or assisting others in violating, any provision of the CAN-SPAM Act, 15 U.S.C. §§ 7701 et seg., including, but not limited to, by initiating the transmission, to a protected computer, of:
A. A commercial electronic mail message, or transactional or relationship message, that contains or is accompanied by, header information that is materially false or materially misleading in violation of Section 5(a)(1) of the CAN-SPAM Act, 15 U.S.C. § 7704(a)(1), including, but not limited to, "from" or "reply-to" lines containing electronic mail addresses that:
1. Are falsified;
2. Are registered to an unrelated third party; or
3. Were obtained by means of false or fraudulent pretenses or representations; and
B. A commercial electronic mail message that contains or includes a subject heading this is likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message in violation of Section 5(a)(2) of the CAN-SPAM Act, 15 U.S.C. § 7704(a)(2).
II. PROHIBITION AGAINST FALSE OR MISLEADING STATEMENTS
IT IS FURTHER ORDERED that in connection with the advertising, promotion, offering for sale, or sale of goods or services in or affecting commerce, Defendants are hereby preliminarily restrained and enjoined from making, or assisting others in making, any express or implied representation or omission of material fact that is false or misleading, in any manner, directly or indirectly, to any consumer or entity, including, but not limited to, the following:
A. Representing that consumers are likely to earn a substantial amount of money from Defendants' business opportunity;
B. Representing that Defendants will provide consumers with envelopes, postage, and mailing lists or sales leads;
C. Representing that Defendants will pay consumers for each envelope they stuff and mail; and
D. Representing that Defendants will fully refund fees paid by consumers to Defendants in connection with Defendants' business opportunity.
III. PROHIBITION AGAINST VIOLATING THE TELEMARKETING SALES RULEIT IS FURTHER ORDERED that Defendants are hereby preliminarily restrained and enjoined from violating any provision of the Telemarketing Sales Rule, 16 C.F.R. Part 310 (attached hereto as Attachment A), including, but not limited to:
A. Causing consumers' billing information to be submitted for payment without consumers' express verifiable authorization in violation of 16 C.F.R. § 310.3(a)(3); and
B. Causing consumers' billing information to be submitted for payment without consumers' express informed consent in violation of 16 C.F.R. § 310.4(a)(6), including, but not limited to, making unauthorized withdrawals from consumers' bank accounts or placing unauthorized charges on consumers' credit cards.
IV. PROHIBITION AGAINST PROVIDING OTHERS WITH THE MEANS AND INSTRUMENTALITIES TO VIOLATE SECTION 5 OF THE FTC ACT
IT IS FURTHER ORDERED that in connection with the offering for sale or sale of any business opportunity, Defendants are hereby preliminarily restrained and enjoined from providing to others the means and instrumentalities with which to make, expressly or by implication, orally or in writing, any false or misleading statement or representation of material fact, including, but not limited to, the following misrepresentations or omissions:
A. That consumers are likely to earn a substantial amount of money from Defendants' business opportunity;
B. Representing that Defendants will provide consumers with envelopes, postage, and mailing lists or sales leads;
C. That Defendants will pay consumers for each envelope they stuff and mail; and
D. That Defendants will fully refund fees paid by consumers to Defendants in connection with Defendants' business opportunity.
V. CONSUMER CREDIT REPORTS
IT IS FURTHER ORDERED that pursuant to Section 604(1) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(1), any consumer reporting agency may furnish a consumer report concerning Defendants Gregory Bryant and Nadira Bryant to the Commission.
VI. PRESERVATION OF RECORDS
IT IS FURTHER ORDERED that Defendants are hereby preliminarily restrained and enjoined from destroying, erasing, mutilating, concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, any computers, computerized files, storage media (including but not limited to floppy disks, hard drives, CD-ROMs, zip disks, punch cards, magnetic tape, backup tapes, and computer chips) on which information has been saved, any and all equipment needed to read any such material, contracts, accounting data, correspondence (including, but not limited to, electronic correspondence), advertisements (including, but not limited to, advertisements placed on the World Wide Web), USENET Newsgroup postings, World Wide Web pages, customer lists, books, written or printed records, handwritten notes, telephone logs, telephone scripts, receipt books, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, copies of federal, state, or local business or personal income or property tax returns, 1099 forms, and other documents or records of any kind that relate to the business, business practices, or business or personal finances of Defendants.
VII. MAINTENANCE OF CURRENT BUSINESS RECORDS
IT IS FURTHER ORDERED that Defendants are hereby preliminarily restrained and enjoined from:
A. Failing to create and maintain documents that, in reasonable detail, accurately, fairly, and completely reflect Defendant Gregory Bryant's or Defendant Nadira Bryant's incomes, disbursements, transactions, and use of money; and
B. Creating, operating, or exercising any control over any business entity, including any partnership, limited partnership, joint venture, sole proprietorship, or corporation, without first providing the Commission with a written statement disclosing: (1) the name of the business entity; (2) the address and telephone number of the business entity; (3) the names of the business entity's officers, directors, principals, managers, and employees; and (4) a detailed description of the business entity's intended activities.
NOTIFICATION PROVISIONS VIII. DISTRIBUTION OF ORDER BY DEFENDANTS
IT IS FURTHER ORDERED that Defendants Gregory and Nadira Bryant shall immediately provide a copy of this Order to each of their affiliates, subsidiaries, divisions, sales entities, successors, assigns, officers, directors, employees, independent contractors, agents, attorneys, and representatives, as well as any person or entity to whom they have sold or provided the "Gregory Bryant Associates" business Opportunity or any product contained therein; and shall, within ten (10) days from the date of entry of this Order, provide the Commission with a sworn statement that they have complied with this provision of the Order, which statement shall include the names and addresses of each such person or entity to whom a copy of the Order was provided and the names and addresses of each person or entity to whom they have sold or provided the "Gregory Bryant Associates" business Opportunity or any product contained therein.
IX. SERVICE OF ORDERIT IS FURTHER ORDERED that copies of this Order may be served by any means, including facsimile transmission and e-mail transmission, upon any financial institution or other entity or person that may have possession, custody, or control of any documents or assets of the Defendant, or that may be subject to any provision of this Order. Pursuant to Fed.R.Civ.P. 4(c)(2), this Order and the initial papers filed in this matter may be served on Defendants by any law enforcement officer, by any agent of the Commission, or by any agent of any process service retained by the Commission.
X. SERVICE UPON PLAINTIFF
Service of all correspondence, pleadings, or notifications related to this case or under this Order upon the Commission shall be performed by hand delivery, facsimile, overnight courier, or other means, as mutually agreed on by the parties (but not by U.S. Mail), to the attention of James Davis and Shaundra Watson, Federal Trade Commission, Bureau of Consumer Protection, 600 Pennsylvania Avenue, NW, Room H-238, Washington, DC 20580.
DONE AND ORDERED