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Aaron Michael Jones, Et Al., Judge: Hon Case 8:17-cv-00058-DOC-JCG Document 79 Filed 04/10/17 Page 1 of 37 Page ID #:1020 1 James E. Evans, Va. Bar No. 83866 [email protected] 2 (202) 326-2026 3 Ian L. Barlow, D.C. Bar No. 998500 [email protected] 4 (202) 326-3120 5 Federal Trade Commission 600 Pennsylvania Ave. NW, CC-8528 6 Washington, DC 20580 7 (202) 326-3395 (fax) 8 Thomas J. Syta, Cal. Bar No. 116286 9 [email protected] (310) 824-4343 10 Local Counsel 11 Federal Trade Commission 10877 Wilshire Boulevard, Suite 700 12 Los Angeles, CA 90024 13 (310) 824-4380 (fax) 14 Attorneys for Plaintiff 15 Federal Trade Commission 16 17 UNITED STATES DISTRICT COURT 18 CENTRAL DISTRICT OF CALIFORNIA 19 Federal Trade Commission, No. SACV17-00058 DOC (JCGx) 20 Plaintiff, Notice of Application and Application 21 for Default Judgment and Permanent 22 vs. Injunction Against Ten Defendants 23 Aaron Michael Jones, et al., Judge: Hon. David O. Carter 24 Date: May 8, 2016 Defendants. Time: 8:30 AM 25 Courtroom: Courtroom 9D 26 Request to Waive Oral Argument 27 28 1 Case 8:17-cv-00058-DOC-JCG Document 79 Filed 04/10/17 Page 4 of 37 Page ID #:1023 1 The FTC could not confer with the remaining nine defaulted defendants 2 pursuant to L.R. 7-3, because they are all corporations or limited liability 3 companies that are not represented by counsel. See, e.g., L.R. 83-2.2.2 (stating that 4 a corporation may not appear pro se). 5 Because Jones has not stated that he opposes the FTC’s motion for default 6 judgment, and because the FTC has not been able to confer with any of the 7 Defaulting Corporate Defendants, the FTC respectfully asks the Court to waive 8 oral argument. Additional grounds for waiving oral argument are set forth in the 9 accompanying motion. 10 11 Respectfully submitted, 12 David C. Shonka 13 Acting General Counsel 14 15 Dated: April 10, 2017 /s/ Ian L. Barlow James E. Evans, Va. Bar No. 83866 16 Ian L. Barlow, D.C. Bar No. 998500 17 Federal Trade Commission 600 Pennsylvania Ave. NW, CC-8528 18 Washington, DC 20580 19 (202) 326-2026 / [email protected] (202) 326-3120 / [email protected] 20 (202) 326-3395 (fax) 21 Thomas J. Syta, Cal. Bar No. 116286 22 Local Counsel 23 Federal Trade Commission 10877 Wilshire Boulevard, Suite 700 24 Los Angeles, CA 90024 25 (310) 824-4343 / [email protected] 26 (310) 824-4380 (fax) 27 Attorneys for Plaintiff 28 Federal Trade Commission 4 Case 8:17-cv-00058-DOC-JCG Document 79 Filed 04/10/17 Page 5 of 37 Page ID #:1024 1 James E. Evans, Va. Bar No. 83866 [email protected] 2 (202) 326-2026 3 Ian L. Barlow, D.C. Bar No. 998500 [email protected] 4 (202) 326-3120 5 Federal Trade Commission 600 Pennsylvania Ave. NW, CC-8528 6 Washington, DC 20580 7 (202) 326-3395 (fax) 8 Thomas J. Syta, Cal. Bar No. 116286 9 [email protected] (310) 824-4343 10 Local Counsel 11 Federal Trade Commission 10877 Wilshire Boulevard, Suite 700 12 Los Angeles, CA 90024 13 (310) 824-4380 (fax) 14 Attorneys for Plaintiff 15 Federal Trade Commission 16 17 UNITED STATES DISTRICT COURT 18 CENTRAL DISTRICT OF CALIFORNIA 19 Federal Trade Commission, No. SACV17-00058 DOC (JCGx) 20 Plaintiff, Memorandum of Points and 21 Authorities in Support of the FTC’s 22 vs. Application for Default Judgment and Permanent Injunction Against 23 Aaron Michael Jones, et al., Ten Defendants 24 Defendants. Judge: Hon. David O. Carter 25 Date: May 8, 2016 26 Time: 8:30 AM Courtroom: Courtroom 9D 27 28 i Case 8:17-cv-00058-DOC-JCG Document 79 Filed 04/10/17 Page 6 of 37 Page ID #:1025 1 Table of Contents 2 I. Summary of Requested Relief .........................................................................1 3 II. Procedural History ...........................................................................................2 4 III. Statement of Facts ............................................................................................2 5 A. Introduction ...........................................................................................2 6 B. The Red Hill Robocall Enterprise ......................................................... 4 7 1. The Structure of the Enterprise ................................................... 4 8 a. The Dialer Companies (Velocity, Allorey, and 9 DMS) and the Buffer Company (DST) ............................ 4 10 i. Dialer Companies from 2010-June 2013 ............... 5 11 ii. June 2013-June 2015: Dialer Companies 12 Pay the Buffer Company, which Pays 13 TelWeb ....................................................................5 14 b. ANI Contractors: DWT and Secure Alliance ................... 7 15 c. Data Provider: DWT ......................................................... 7 16 d. Lead Generators and Telemarketers: Savilo and 17 Secure Alliance ................................................................. 8 18 e. Funding Jones’ Extravagant Lifestyle: Allorey, 19 DMS, Secure Alliance ....................................................10 20 2. Violations of the Telemarketing Sales Rule by the Red 21 Hill Robocall Enterprise ...........................................................10 22 C. The Jones Home Robocall Enterprise ................................................. 11 23 I V. Argument .......................................................................................................13 24 A. The Clerk’s Entry of Default Was Proper ...........................................13 25 B. Default Judgments Should Be Entered Against All Defaulting 26 Defendants ...........................................................................................14 27 28 ii Case 8:17-cv-00058-DOC-JCG Document 79 Filed 04/10/17 Page 7 of 37 Page ID #:1026 1 1. The First Eitel Factor Weighs in Favor of Entering A 2 Default Judgment, Because the FTC Will Suffer 3 Prejudice if a Default Judgment is not Entered ........................15 4 2. The Second and Third Eitel Factors Weigh in Favor of 5 Granting a Default Judgment Because the FTC Has 6 Stated a Claim on Which It May Recover and Produced 7 Substantial Evidence Supporting that Claim ............................15 8 3. The Fourth Eitel Factor Weighs in Favor of Default 9 Judgment Against the Defendants Because the Requested 10 $2.7 Million Judgment Against Jones is Appropriate in 11 Relation to His Conduct. ...........................................................19 12 4. The Fifth Eitel Factor Weighs in Favor of Entering the 13 Default Judgment Because No Factual Disputes Exist.............19 14 5. The Sixth Eitel Factor Weighs in Favor of Entering 15 Default Judgments Because the Defaults Were Not Due 16 to Excusable Neglect .................................................................20 17 6. The Seventh Eitel Factor Does Not Preclude Entry of the 18 Default Judgments.....................................................................20 19 V. The Requested Injunctive Relief Is Reasonable and Appropriate .................21 20 VI. The Requested $2.7 Million Civil Penalty Is Reasonable and 21 Appropriate Under the Statutory Factors Listed in the FTC Act ..................23 22 VII. Conclusion .....................................................................................................25 23 24 25 26 27 28 iii Case 8:17-cv-00058-DOC-JCG Document 79 Filed 04/10/17 Page 8 of 37 Page ID #:1027 1 Table of Authorities 2 Cases Page(s) 3 Aldabe v. Aldabe, 616 F.2d 1089 (9th Cir. 1980) ..................................................... 14 4 Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) ...................................... 14-15, 19-21 5 Fair Housing of Marin v. Combs, 285 F.3d 899 (9th Cir. 2002) ....................... 15-16 6 FTC v. 1263523 Ontario, Inc., 205 F. Supp. 205 (S.D.N.Y. 2002) ......................... 15 7 FTC v. A to Z Marketing, Inc., No. SA-CV-130919-DOC-RNBx, 8 2014 WL 12595332 (C.D. Cal. Oct. 17, 2014)........................................ 14-15 9 FTC v. Colgate-Palmolive Co., 380 U.S. 374 (1965) .............................................. 22 10 FTC v. Grant Connect, LLC, 827 F. Supp. 2d 1199 (D. Nev. 2011) .................. 21-22 11 FTC v. Grant Connect, LLC, 763 F.3d 1094 (9th Cir. 2014) ............................. 21-22 12 FTC v. H.N. Singer, Inc., 668 F.2d 1107 (9th Cir. 1982) ......................................... 21 13 FTC v. Hope for Car Owners, LLC, No. 2:12-cv-778-GEB-EFB, 14 2013 WL 322895 (E.D. Cal. Jan. 24, 2013) .................................................. 22 15 FTC v. INC21.com Corp., 745 F. Supp. 2d 975 (N.D. Cal. 2010) ........................... 22 16 FTC v. John Beck Amazing Profits LLC, 888 F. Supp. 2d 1006 17 (C.D. Cal. 2012) ............................................................................................. 22 18 FTC v. National Lead Co., 352 U.S. 419 (1957) ..................................................... 22 19 FTC v. Network Services Depot, Inc., 617 F.3d 1127 (9th Cir. 2010) ..................... 16 20 FTC v. Pantron I Corp., 33 F.3d 1088 (9th Cir. 1994) ............................................ 21 21 FTC v. Ramsey, No. 9:17-cv-80032-KAM (S.D. Fla. filed Jan. 10, 2017) ............... 8 22 FTC v. Ruberoid Co., 343 U.S. 470 (1952) ............................................................. 21 23 Ho v. SSK Investment LLC, No. SA-CV-160629-DOC-JCG, 24 2016 WL 5921864 (C.D. Cal. Sept. 14, 2016) ........................................ 14-15 25 Pepsico, Inc. v. California Security Cans, 238 F. Supp. 2d 1172 26 (C.D. Cal. 2002) ........................................................................... 14-15, 19, 21 27 Sears, Roebuck and Co. v. FTC, 676 F.2d 385 (9th Cir. 1982) ................................ 21 28 TeleVideo
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