Federal Trade Commission v. American Telnet, Inc.

188 F.R.D. 688, 1999 U.S. Dist. LEXIS 15067, 1999 WL 756586
CourtDistrict Court, S.D. Florida
DecidedAugust 10, 1999
DocketNo. 99-1587-CIV-KING
StatusPublished
Cited by1 cases

This text of 188 F.R.D. 688 (Federal Trade Commission v. American Telnet, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Trade Commission v. American Telnet, Inc., 188 F.R.D. 688, 1999 U.S. Dist. LEXIS 15067, 1999 WL 756586 (S.D. Fla. 1999).

Opinion

ORDER DENYING LINDA PAIS’S MOTION TO INTERVENE

JAMES LAWRENCE KING, District Judge.

THIS CAUSE comes before the Court on the Emergency Motion filed on July 9, 1999 by Linda Pais (“Pais”), seeking to intervene in the above-styled matter pursuant to Rule 24 of the Federal Rules of Civil Procedure. Defendants American TelNet, Inc. (“ATN”), Michael Abraham Pardes (“Pardes”), Ted Liebowitz (“Liebowitz”), and Michael Self (“Self’) (collectively, “Defendants”) submitted a response on July 28, 1999; Plaintiff Federal Trade Commission (“FTC”) did the same on July 30, 1999. On August 4, 1999, Pais filed a reply memorandum in further support of her Motion.

I. Factual and Procedural Background

In 1994, the FTC charged Defendant ATN with violating Section 5(a) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 45(a), and the FTC’s 900-Number Rule, 16 C.F.R. Part 308, promulgated pursuant to the Telephone Disclosure and Dispute Resolution Act of 1992 (“TDDRA”). See Pl.’s Opp. Mem., at 3. That same year, the FTC and ATN entered into a consent decree, which enjoined ATN from violating Section 5 and the 900-Number Rule, required detailed record-keeping, imposed $500,000 in civil penalties, and provided $2 million in consumer credits. See id. Despite the consent decree, the FTC continued to receive complaints about ATN, prompting the agency to initiate a second investigation into the company’s practices. See id.

On June 8, 1999, the FTC instituted the above-styled action. See Compl. at If 1. The FTC sought to obtain preliminary and permanent injunctive relief, restitution, disgorgement, and other equitable relief for Defendants’ alleged deceptive acts and/or practices in continued violation of Section 5(a) of the FTC Act and the FTC’s 900-Number Rule. See id. The FTC’s Complaint set forth eight counts against Defendants, alleging wrongdoing with respect to ATN’s billing and collections procedures for its 900 pay-per-call services.

The FTC and Defendants subsequently filed a stipulated Final Judgment, which this Court entered on June 14, 1999. In addition to detailed conduct prohibitions and other injunctive relief, the Final Judgment requires that Defendant ATN (1) waive its right to collect the $36.4 million it had billed to consumers between December 6,1994 and December 31, 1997, (2) provide $1 million in credits to consumers who were illegally charged between December 1,1998 and June 14, 1999, (3) pay $2 million in redress to consumers who paid ATN and who, between December 6, 1994 and June 14, 1999, had submitted a billing error notice to ATN asserting that (a) neither the consumer nor anyone else had accessed ATN’s audiotext services from the consumer’s telephone, (b) [690]*690the consumer’s telephone had a 900-number block when the disputed calls were made, or (c) the line from which the service was accessed was not assigned to the consumer at the time the charges were incurred.

In her Motion, Pais argues that the Final Judgment entered into by the parties may impair or impede the class action claims brought by her against Defendant ATN in the Superior Court of Hudson County, New Jersey on December 1, 1997.1 See Mot. To Intervene, at 2. In the New Jersey action, Pais alleges that ATN engaged in a variety of wrongful, deceptive, and illegal practices in relation to its activities as a 900-number service bureau, such as charging her for calls made to (1) 900 numbers providing adult-oriented sexual materia], but made by her minor child, (2) 900 numbers, even though she had a block placed on her telephone to prevent such calls, and (3) 800 numbers charged as 900 numbers. See id. at 5. Pais, for herself and on behalf of a class of persons similarly situated, seeks injunctive and declaratory relief, as well as money damages to the extent of payments made to ATN. See id. at 5-6. Pais maintains that the New Jersey action involves claims that both overlap the claims asserted and settled in the FTC action as well as certain non-overlapping claims. See id. at 3. As such, Pais seeks to intervene in the above-styled matter as of right under Rule 24(a), or, alternatively, with the court’s permission under Rule 24(b).

II. Legal Standard

Rule 24(a) provides for intervention as a matter of right only where “the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.” Fed.R.Civ.P. 24(a) (West 1998). In the Eleventh Circuit, a movant must establish the following in order to intervene under Rule 24(a): (1) that his application to intervene is timely; (2) that he has an interest relating to the property or transaction which is the subject of the action; (3) that he is so situated that disposition of the action, as a practical matter, may impede or impair his ability to protect that interest; and (4) that his interest is represented inadequately by the existing parties to the suit. See Purcell v. BankAtlantic Fin. Corp., 85 F.3d 1508, 1512 (11th Cir.1996). If the movant establishes all the prerequisites to intervention, the district court has no discretion to deny the motion. See United States v. State of Ga., 19 F.3d 1388, 1393 (11th Cir.1994).

Rule 24(b) allows for intervention on a permissive basis “when an applicant’s claim or defense and the main action have a question of law or fact in common.” Fed. R.Civ.P. 24(b) (West 1998). The decision whether to allow intervention under Rule 24(b), even where there is a common question of law or fact, is entirely within the court’s discretion. See Purcell, 85 F.3d at 1513. In exercising its discretion, federal courts must consider whether intervention will unduly delay or prejudice the adjudication of the original parties’ rights. See Meek v. Metropolitan Dade County, Fla., 985 F.2d 1471, 1477 (11th Cir.1993).

III. Analysis

A. Intervention as of Right under Rule 2i(a)

Pais maintains that she is entitled to intervene in the above-styled case as a matter of right because she satisfies all the necessary requirements. First, she notes that her application is timely, having been filed one month after the FTC case commenced and less than one month after it settled. See Mot. To Intervene, at 8. Second, Pais represents that the FTC action involves claims that are common to Pais’s claims in the New Jersey action, such that their resolution may impair the relief sought by her and the class in New Jersey. See id.

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188 F.R.D. 688, 1999 U.S. Dist. LEXIS 15067, 1999 WL 756586, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-trade-commission-v-american-telnet-inc-flsd-1999.