UNITED STATES DISTRICT COURT FEDERAL TRADE COMMISSION, Plaintiff, v. THE DEAN THOMAS CORPORATION, INC., a corporation, and THE GAME CLUB, INC., a corporation, and PROFESSIONAL PUBLISHERS, INC., a corporation, and THOMAS PUBLISHING COMPANY, INC., a corporation, and PREFERRED PUBLISHING COMPANY, INC., a corporation, and DEAN R. THOMAS, and RANDY B. LONIS, and RAYMOND CELIE, individually and as officers of said corporations, and MICHAEL BRANT, individually, Defendants. CIVIL NO. 1:97CV 0129 JUDGE WILLIAM C. LEE U.S. MAGISTRATE JUDGE Stipulated Final Judgment as to Defendants The Dean Thomas Corporation, Inc.; The Game Club, Inc.; Professional Publishers, Inc.; Thomas Publishing Company, Inc.; Preferred Publishing Company, Inc.; and Dean R. Thomas, Individually and as an Officer of the Defendant Corporations Plaintiff, the Federal Trade Commission (“FTC”), filed its complaint pursuant to section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b), charging defendants with violations of section 5(a) of the FTC Act, 15 U.S.C. § 45(a). On April 8, 1997, this Court granted plaintiff FTC's motion for a temporary restraining order with asset freeze, appointment of a temporary receiver and other equitable relief, and ordered defendants to show cause why a preliminary injunction should not issue against them. The parties subsequently agreed to entry of a stipulated preliminary injunction, which this Court granted on April 23, 1997. On October 31, 1997, plaintiff FTC moved the Court to issue an order to show cause why defendant Dean R. Thomas and one of his employees — Michael Brant — should not be held in contempt of the Preliminary Injunction for their activities in the operations of Preferred Publishing Company, Inc., which was incorporated after the entry of the Preliminary Injunction. On November 6, 1997, this Court issued an Order for Dean R. Thomas and Michael Brant to show cause why they are not in contempt of the Preliminary Injunction. On November 6, 1997, the Court issued an Order freezing the assets of defendant Dean R. Thomas. By stipulation of the parties, Preferred Publishing Company, Inc., is made a party defendant to this action; and by stipulation of the parties and Michael Brant, filed contemporaneously herewith, Michael Brant is made a party defendant. NOW, plaintiff Federal Trade Commission, by its counsel, and defendants The Dean Thomas Corporation, Inc., The Game Club, Inc., Professional Publishers, Inc., Thomas Publishing Company, Inc., Preferred Publishing Company, Inc., and Dean R. Thomas, individually and as an officer of said corporations, have agreed to the entry of this Stipulated Final Judgment and Order (“Order”) by this Court, to resolve all matters of dispute between plaintiff FTC and defendants. The said parties having requested the Court to enter this Order, it is therefore ORDERED, ADJUDGED AND DECREED as follows: FINDINGS <1>This Court has jurisdiction over the subject matter of this case and has jurisdiction over the defendants. Venue in the Northern District of Indiana is proper. <2>The Complaint states a claim upon which relief may be granted under sections 5(a) and 13(b) of the FTC Act, 15 U.S.C. §§ 45 and 53(b). <3>Plaintiff FTC has the authority under section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to seek the relief it has requested. <4>The activities of defendants The Dean Thomas Corporation, Inc., The Game Club, Inc., Professional Publishers, Inc., Thomas Publishing Company, Inc., Preferred Publishing Company, Inc., and Dean R. Thomas, individually and as an officer of said corporations, are in or affecting commerce, as “commerce” is defined in § 4 of the FTC Act, 15 U.S.C. § 44. <5>Defendant The Dean Thomas Corporation is an Indiana corporation that has done business under the names of:
and possibly under other names. <6>Defendant The Game Club, Inc., is an Indiana corporation that has done business under other names, including the same d/b/a’s The Dean Thomas Corporation uses, as set forth in paragraph 5, above. <7>Defendant Professional Publishers, Inc., is an Indiana corporation that has done business as Professional Publishing, Inc., and PPI, and under other names, including the same d/b/a’s The Dean Thomas Corporation uses, as set forth in paragraph 5, above. <8>Defendant Thomas Publishing Company, Inc., is an Indiana corporation that has done business as Quality Publications, and under other names, including the same d/b/a’s The Dean Thomas Corporation uses, as set forth in paragraph 5, above. <9>Defendant Preferred Publishing Company, Inc., is an Indiana corporation that was incorporated on April 28, 1997. <10>Defendant Dean R. Thomas is the sole stockholder, director, president and secretary of The Dean Thomas Corporation, The Game Club, Inc., Professional Publishers, Inc., Thomas Publishing Company, Inc., and Preferred Publishing Company, Inc. At all times material to this proceeding, individually or in concert with others, he has formulated, directed, controlled or participated in the acts and practices of the corporate defendants, including the acts and practices set forth in plaintiff’s Complaint. <11>In connection with the offering for sale and sale of advertisements to businesses, the corporate defendants have falsely represented, expressly or by implication, that a business or a named person acting on behalf of the business previously authorized placement of the advertising in defendants’ publications. <12>In connection with the offering for sale and sale of advertisements to businesses, the corporate defendants have falsely represented, expressly or by implication, that defendants incurred the cost of printing the publication in reliance on a business’s authorization of and promise to pay for the advertisement. <13>In connection with the offering for sale and sale of advertisements to businesses, the corporate defendants have sent to businesses C.O.D. packages containing bills for such advertisements and have threatened to take action to collect payment of such bills, thereby falsely representing, expressly or by implication, that businesses have ordered the advertisements billed to them by defendants. <14>The corporate defendants’ false representations have caused financial injury to the businesses that have paid for advertisements in defendants’ publications. <15>Plaintiff Federal Trade Commission and defendants The Dean Thomas Corporation, Inc., The Game Club, Inc., Professional Publishers, Inc., Thomas Publishing Company, Inc., Preferred Publishing Company, Inc., and Dean R. Thomas, individually and as an officer of said corporations, hereby waive all rights to seek judicial review or otherwise challenge or contest the validity of this Order, and defendants waive any right that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412. <16>This action and the relief awarded herein is in addition to, and not in lieu of, other remedies as may be provided by law, including both civil and criminal remedies; and, <17>Entry of this Order is in the public interest. DEFINITIONS For purposes of this Order, the following definitions shall apply: <1>“Defendants” means The Dean Thomas Corporation, Inc., The Game Club, Inc., Professional Publishers, Inc., Thomas Publishing Company, Inc., Preferred Publishing Company, Inc., and Dean R. Thomas, individually and as an officer of said corporations, and their officers, agents, directors, servants, employees, salespersons, independent contractors, corporations, subsidiaries, affiliates, successors, assigns, all other persons or entities directly or indirectly under their control or under common control with them, and all other persons or entities 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, and each of them. <2>“Person” means a natural person, organization or other legal entity, including a corporation, partnership, proprietorship, association, cooperative, government or governmental subdivision or agency, or any other group or combination acting as an entity. <3>“Consumer” includes any individual, group, unincorporated association, limited or general partnership, corporation or other business entity. ORDER I. IT IS THEREFORE ORDERED, in connection with the offering for sale, sale, distribution, marketing or sponsorship of any advertisement, publication, program, service or product, that defendants are each hereby permanently restrained and enjoined from: A. making any express or implied representation of material fact that is false or misleading, including, but not limited to, any misrepresentation:
B. using any alias, pen name or pseudonym, or otherwise misrepresenting their true identity(ies). II. IT IS FURTHER ORDERED that defendants are permanently restrained and enjoined from selling, renting, leasing, transferring or otherwise disclosing the name, address, telephone number, credit card number, bank account number or other identifying information of any person who paid money to any defendant in this matter, at any time, in connection with the offering for sale, sale, distribution, marketing, or sponsorship of any advertisement, publication, program or product. Provided, however, that defendants may disclose such identifying information to a law enforcement agency or as required by any law, regulation or court order. III. IT IS FURTHER ORDERED that:
IV. IT IS FURTHER ORDERED that payment of all funds for consumer redress shall be remitted to the Federal Trade Commission, Eaton Center—Suite 200, 1111 Superior Avenue, Cleveland, Ohio 44114, by certified or cashier’s check. These funds shall be deposited into an account and shall be used to provide redress to consumers who may have been injured by defendants’ acts pursuant to a distribution plan to be submitted by plaintiff FTC and approved by the Court. Such funds may include all funds remitted by the receiver to the redress fund pursuant to Part III herein after application for and payment of administrative costs and fees upon closing of the receivership estate. Defendants forever disclaim all right, title and interest in all sums in this account. None of the funds deposited in the account shall be returned to defendants, their successors, heirs or assigns. Provided, that if the monies collected by plaintiff FTC in satisfaction of this Judgment are insufficient to justify a distribution plan for the benefit of injured consumers, the Court, on motion of plaintiff FTC, may order that such monies be paid to the United States Treasury as a disgorgement remedy or be used by plaintiff FTC to educate consumers affected by the deceptive practices engaged in by the defendants in this case. V. Plaintiff Federal Trade Commission’s agreement to this Judgment — which does not provide for defendant Dean R. Thomas to contribute to consumer redress — is expressly premised upon the truthfulness, accuracy and completeness of the financial statements filed by the defendants with the Court in this matter and submitted to plaintiff FTC, and on the deposition testimony of defendant Dean R. Thomas on August 21, August 22, and October 1, 1997, and the sworn financial declaration filed contemporaneously herewith. If, upon motion by plaintiff FTC, the Court finds that defendant Dean R. Thomas failed to disclose any material asset, or materially misrepresented the value of any asset, or made any other material misrepresentation in or omission from the financial statements or deposition testimony, the Judgment herein shall be reopened for the purpose of determining an appropriate amount for defendants to pay as redress to consumers. Defendants agree that the amount of consumer redress for which they would be jointly and severally liable is an amount equal to the total gross sales of the defendant corporations during the years 1994 and 1995, as shown on line 1c of the Corporate Federal Income Tax Returns for those years which are on file with the Court. Provided, however, that in all other respects, this Order shall remain in full force and effect unless otherwise ordered by this Court while the Judgment is reopened to determine the appropriate amount of consumer redress; provided further that, for purposes of this section, and any subsequent proceedings to enforce payment, including but not limited to a nondischargeability complaint filed in a bankruptcy proceeding, defendants waive any right to contest any of the allegations of the Commission’s complaint; and provided further that a proceeding instituted under this section is in addition to, and not in lieu of, any other civil or criminal remedies as may be provided by law, including any other proceedings the FTC may initiate to enforce this Order. No portion of any forfeiture shall be deemed a payment of any fine, penalty or punitive assessment. VI. IT IS FURTHER ORDERED that defendant Dean R. Thomas is hereby permanently restrained and enjoined from:
VII. IT IS FURTHER ORDERED that the freeze of defendant Dean R. Thomas’s assets, as ordered by the Court in Judge Cosbey’s Order of November 6, 1997, shall be lifted upon entry of this Order. VIII. IT IS FURTHER ORDERED that, for a period of five (5) years, commencing with the date of entry of this Judgment, defendant Dean R. Thomas shall notify in writing the Cleveland Regional Office of the Federal Trade Commission, Regional Director, Eaton Center—Suite 200, 1111 Superior Avenue, Cleveland, Ohio 44114, of:
IX. IT IS FURTHER ORDERED that, for a period of five (5) years commencing with the date of entry of this Judgment, for purposes of determining or securing compliance with this Judgment, in connection with any other business owned or controlled in whole or in part by defendant Dean R. Thomas, defendant Thomas shall, upon written notice:
X. IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry of this Judgment, defendant corporations shall:
XI. Each party to this Judgment hereby agrees to bear its own costs and attorney fees incurred in connection with this action; provided, however, in the event plaintiff FTC initiates proceedings to enforce any provision of this Judgment and provided further this Court determines that the defendant in such proceeding has violated any term or provision of this Judgment, that defendant shall pay the costs and attorney fees incurred by plaintiff FTC in connection with such proceedings. XII. IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for the purpose of enabling plaintiff FTC and defendants to apply to the Court at any time for such further orders or directives as may be necessary or appropriate for the interpretation or modification of this Judgment, for the enforcement of compliance therewith, or the punishment of violations thereof. XIII. Defendants waive all claims under the Equal Access to Justice Act, 28 U.S.C. § 2412, as amended by Pub. L. No. 104-121, 110 Stat. 847, 863-64 (1996), and all rights to seek appellate review or otherwise challenge or contest the validity of this Judgment, or the temporary or preliminary orders entered in this proceeding, and further waive and release any claim they may have against plaintiff FTC, the receiver, or their employees, agents or representatives. SO ORDERED this ______ day of ______________, 1997. United States District Judge The parties consent to the terms and conditions set forth above and to entry of this Stipulated Final Judgment without further notice to them. FOR PLAINTIFF Federal Trade Commission: Date: FOR DEFENDANTS The Dean Thomas Corporation, Inc.; DEAN R. THOMAS, Date: M. ROBERT BENSON Date: |