United States District Court, W.D. New York
FEDERAL TRADE COMMISSION and PEOPLE OF THE STATE OF NEW YORK, by ERIC T. SCHNEIDERMAN, Attorney General of the State of New York, Plaintiffs,
VANTAGE POINT SERVICES, LLC, et al. Defendants.
DECISION AND ORDER
WILLIAM M. SKRETNY, Senior District Judge.
Plaintiffs, the Federal Trade Commission and the New York State Attorney General, commenced this action under Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 53(b) ("FTCA"); Section 814 of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692l; New York Executive Law § 63(12); and New York General Business Law § 349 and § 602 for Defendants' alleged abusive and deceptive debt collection practices. Plaintiffs seek, among other things, injunctive relief, restitution, and disgorgement of ill-gotten monies.
In the Complaint, Plaintiffs allege that Defendants, in their efforts to collect on debts, are jointly and severally liable for: (1) making false representations to consumers regarding Defendants' identities, location, and business purposes, including stating that they are calling from or on behalf of a law firm or government agency; (2) falsely threatening debtors with arrest on criminal charges, the filing of a civil suit, or similar consequences for non-payment; (3) making unlawful contact with third parties (such as family, friends, and employers) and disclosing information, including false information such as impending arrest, about the purported debt; (4) failing to provide consumers with statutorily required information; and (5) charging consumers illegal processing fees.
Defendant Vantage Point Services LLC was formed by Defendant Megan VanDeViver in March 2008. (Davis Decl PX01 Ex A.) In 2010, VanDeViver sold her ownership interest in Vantage to Defendant Greg MacKinnon for ten dollars ($10.00). (Vacco Decl Ex 1.) She subsequently remained a signatory on Vantage Point's bank accounts, however, and MacKinnon was not added as a signatory until June 2011. (Davis Decl PX01 Ex S.) Further, Defendant Angela Burdorf became a partner and officer in Vantage Point in June 2012. (Davis Decl PX01 Ex XX.) Although 636 North French Road, Suites 7 and 8, Amherst, New York appears to be Vantage Point's primary physical location (Peters Decl PX03 ¶¶ 7-10; Kennuth Decl ¶ 3; see Davis Decl Ex S), at different times this Defendant has also held itself out as doing business from 121 Willow Drive, Tonawanda, New York; 4248 Ridge Lea Road, Suite 45, Amherst, New York; and pays rent for 7948 Baymeadows Way, Jacksonville, Florida. (Davis Decl PX01 Exs A, H, J, Ex FF, XX.)
Defendant Payment Management Solutions, Inc., was incorporated in New York on December 12, 2012, and has operated under Defendant Burdorf as the principal member. (Davis Decl PX01 Exs B, O, T-V.) Defendants assert that Payment Management's principal place of business was 10325 Lockport Road, Niagara Falls, a building which also houses several debt collection companies. (McCollister Decl ¶¶ 3-7; Greenman Decl ¶¶ 11-12.) Payment Management has also held itself out as operating from 4248 Ridge Lea Road, Suite 45, Amherst, New York. (Davis Decl PX01 Exs P, R, T-V, TT.) This Defendant, however, operated out of the North French Road office for an unspecified amount of time prior to the commencement of this action. (McCollister Decl ¶ 2.) Defendant Burdorf also formed Solidified Payment Solutions, LLC on July 14, 2014, a company which has received several wire transfers from Payment Management Solutions and wired almost the same amount out to Vantage Point. (Davis Decl PX01 ¶¶ 24 Ex C.)
Defendant Bonified Payment Solutions, Inc., was formed by Defendant Joseph Ciffa and incorporated in New York State on June 13, 2014. (Davis Decl PX01 Ex F; Greenman Decl ¶¶ 16-17.) Bonified Payment's primary address is also 10325 Lockport Road, where Ciffa asserts he rented space along with phone services from Defendant MacKinnon. (Greenman Decl ¶ 11.)
On January 5, 2015, this Court granted Plaintiffs' ex parte motion for a temporary restraining order ("TRO") with an asset freeze and appointment of a Receiver to oversee the named Corporate Defendants and their assets, subsidiaries, and affiliates, including accounts held by Solidified Payment Solutions, LLC and Vision Asset Management Group, LLC. Pursuant to the authority granted by the TRO, Plaintiffs and the Receiver entered the Lockport, North French Road, and Jacksonville premises on January 7, 2015, and the Receiver took control of the Corporate Defendants and related entities.
Presently before this Court is Plaintiffs' motion for a preliminary injunction with a continued asset freeze. For the reasons that follow, Plaintiffs' motion is granted.
A. Preliminary Injunction Standard
The standard for obtaining a preliminary injunction under the FTCA differs from that applicable to private applicants seeking such relief. See F.T.C. v. Crescent Publ'g Grp., Inc., 129 F.Supp.2d 311, 319 (S.D.N.Y. 2001) (citing U.S. v. Sun and Sand Imports, Ltd., Inc., 725 F.2d 184, 188 (2d Cir. 1984)); see also F.T.C. v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1029 (7th Cir. 1988). Plaintiffs are entitled to a preliminary injunction "[u]pon a proper showing that, weighing the equities and considering the Commission's likelihood of ultimate success, such action would be in the public interest." 15 U.S.C. § 53(b). Under this public interest test, "private concerns may certainly be considered, [but] public equities must receive far greater weight." World Travel Vacation Brokers, Inc., 861 F.2d at 1029; see Sun and Sand Imports, Ltd., Inc., 725 F.2d at 188 (under the FTCA, the equities should weigh in favor of a preliminary injunction); F.T.C. v. Weyerhaeuser Co., 665 F.2d 1072, 1083 (D.C. Cir. 1981) ("When the Commission demonstrates a likelihood of ultimate success, a countershowing of private equities alone would not suffice to justify denial of a preliminary injunction."); see also Crescent Publ'g Grp., Inc., 129 F.Supp.2d at 319; F.T.C. v. Phoenix Avatar, LLC, No. 04 C 2897, 2004 WL 1746698, *8 (N.D. Ill. July 30, 2004). Thus, the FTC does not have to show irreparable harm, but instead a court should: (1) determine whether the FTC has a fair and tenable chance of ultimate success on the merits; and (2) consider the equities of imposing injunctive relief. Crescent Publ'g Grp., Inc., 129 F.Supp.2d at 319; see also People v. Apple Health & Sports Clubs, 174 A.D.2d 438, 571 N.Y.S.2d 23 (N.Y.A.D. 1st Dep't 1991) (applying similar standard in special proceeding pursuant to N.Y. Executive Law § 63), aff'd 80 N.Y.2d 803 (1992).
B. Exclusion of Consumer Declarations
In considering Plaintiffs' motion, Defendants argue that this Court should disregard the consumer declarations submitted in support of the TRO and incorporated by reference into Plaintiffs' present submissions. (Defs' Mem in Opp'n at 6-8; see PX05-PX15, PX18-PX30.) Specifically, Defendants assert that these declarations appear to have been prepared by FTC agents and not the consumers themselves. Although the declarations are similar in format, they do not contain rote repetitions of general allegations, but instead each declaration reflects a consumer's relevant experience with an ...