On April 14, 2020, Dan Blynn was quoted in FTCWatch regarding a contested lawsuit between the Federal Trade Commission (FTC) and alleged telemarketing scammers. According to the article, the FTC, joined by Ohio’s attorney general, charged Educare Centre Services, Tripletel, and other affiliates with defrauding millions of dollars from people struggling with credit card debt through a deceptive telemarking scheme.
A U.S. District Court judge issued preliminary injunctions against Educare and another firm accused of playing a key role in the scheme. However, the defendants contend that the FTC failed to satisfy a Third Circuit Court of Appeals ruling, Shire ViroPharma, which held that in order to obtain an injunction, the commission must have reason to believe that a wrongdoer “is violating” or is “about to violate the law.”
The defendants allege that the plaintiffs knew the misconduct had stopped but intentionally misled the court and should be sanctioned under Rule 11 of the Federal Rules of Civil Procedure. The FTC and Ohio attorney general pushed back, arguing that the defendants Educare and Tripletel “operate as a common enterprise” and the business was ongoing because Tripletel continued to process illegal payments.
Blynn said, “Normally I would say that a motion for sanctions isn’t all that remarkable, but I don’t recall if I have ever seen one filed against the Federal Trade Commission and an AG. You just don’t see them that often.”
Blynn also noted the FTC’s reliance on “joint enterprise” is “an interesting approach and says these guys were part of a common enterprise and therefore the conduct as to the other defendants is imputed upon them. If that is all it takes, what happens if someone has been involved with a couple of defendants 20 years ago? Does that mean that this new defendant is on the hook for conduct that happened in years 19 and 20? It is an unbridled attempt to run an end-run around Shire.”