Mercury Marketing Technologies of Delaware, Inc. v. State Ex Rel. Beebe

189 S.W.3d 414, 358 Ark. 319
CourtSupreme Court of Arkansas
DecidedJuly 1, 2004
Docket03-1382
StatusPublished
Cited by4 cases

This text of 189 S.W.3d 414 (Mercury Marketing Technologies of Delaware, Inc. v. State Ex Rel. Beebe) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mercury Marketing Technologies of Delaware, Inc. v. State Ex Rel. Beebe, 189 S.W.3d 414, 358 Ark. 319 (Ark. 2004).

Opinions

Robert L. Brown, Justice.

Appellants, Mercury Marketing Technologies e. Delaware, Inc., GoInternet.Net, Inc., Neal Saferstein, Arthur Cohen, and Robert Rosenkranz (jointly referred to as Mercury), appeal from the circuit court’s injunction restraining and enjoining it from conducting its telemarketing business in Arkansas.1 Mercury asserts four points on appeal. We affirm the order of the circuit court.

On November 12, 2002, the appellee, the State of Arkansas, which was represented by the State Attorney General, filed a complaint alleging a cause of action against Mercury under the Arkansas Deceptive Trade Practices Act (ADTPA), which is codified at Ark. Code Ann. §§ 4-88-101 — 4-88-503 (Repl. 2001, Supp. 2003). The complaint asserted that Mercury conducted business throughout the nation, including Arkansas, in operating telemarketing strategies that “ostensibly offer services such as web site creation and maintenance.” It then explained Mercury’s method of conducting business:

21. The Mercury defendants market their services primarily to small businesses such as churches, not-for-profit organizations, medical offices, and law firms. They obtain lists of telephone numbers of these businesses and arrange for the trained telemarketers to call these businesses.
22. In 1998, the Mercury defendants began making telemarketing calls to Arkansas.
23. The Mercury defendants’ telemarketer speaks with the individual that answers the telephone for the business, whether it is an employee or a small business owner (the call recipient).
24. During these calls, the Mercury defendants ostensibly offer to create web pages for businesses. Most call recipients that remember the call believed they were being offered a free sample web design and information but never agreed to be billed. Other call recipients do not recall ever being contacted.
25. Following the telemarketer’s initial discussion with the call recipient, he or she is asked to hold for verification. During the verification procedure, the call recipient is asked to verify information such as name, address and phone number.
26. At no time during this process do the Mercury defendants clearly and conspicuously disclose to the call recipient basic and material terms, such as price, method of billing, method of cancellation, intent to bill, or even ask for the call recipient’s assent to the contractual arrangement.
27. One method by which the Mercury defendants conceal these material terms is that after the information referred to above is confirmed, the telemarketer begins speaking in such a rapid cadence that he cannot be understood. Another method used is that the telemarketer simply omits some or all of the terms from the presentation.
28. During this monologue, the call recipient is not clearly and conspicuously informed by the telemarketer that the business target will be billed $29.95 if it does not affirmatively cancel the service within 15 days.
29. At no time is the call recipient asked to agree to have the business target billed.
34. The only written notice of the price of the service, the method of billing, or the .cancellation policy is printed in small print over half-way down the second page and on the back side of one page contained in the mail-out package. There, below a fine-print, grey-screened list of over 1,000 dial-up access numbers (not one of which is an Arkansas telephone number), at the very bottom of the page, in italicized gray-screened fine print is the following notice:
Please refer above for the dial up access numbers for setting up your internet service. If you have any questions about more dial up numbers, comments or if you decide to cancel your service please be advised to call our customer service number, 888-948-1930. After fifteen days rates are 29.95 a month conveniently on your local telephone bill. We are not associated with your local phone company.
36. Fifteen days later, the Mercury defendants arrange for a third-party billing company to bill the business target $29.95 per month on its telephone bill. The charge is placed on the current charges, often listed as a billing from ILD services so it appears to be part of the normal service charges. That billing continues until cancelled by the business target. The result of this notice and billing method is that often the business[ ] target does not realize it is being billed. [Emphasis in original and emphasis added.]

The State asserted that the acts and practices of Mercury “constitute violations” of the ADTPA and that absent injunctive relief, Mercury was likely to continue to injure consumers and harm Arkansas businesses. The State sought relief, including an injunction.

On the same day the State filed its complaint, it also filed a motion for a preliminary injunction. In that motion, the State claimed that it could meet its burden of proof for a preliminary injunction by showing that the appellants violated the ADTPA and that the act specifically authorized injunctive relief on a showing of violation of the act. The State further noted that, while not required, it could demonstrate that the “four elements traditionally considered and the factors identified in Rule 65 of the Arkansas Rules of Civil Procedure weigh in favor of granting the State’s request[.]” The State attached affidavits to its motion from representatives of four businesses stating that they had been fraudulently billed by Mercury (College Avenue Church of Christ in El Dorado, Hoggard Law Firm in Little Rock, Stuttgart Regional Medical Center, and a physician at Stuttgart Regional Medical Center). The State also attached an affidavit from its investigator who had investigated ADTPA violations by Mercury by conducting a survey.

On December 9, 2002, Mercury filed a motion to dismiss due to a statutory exception. In that motion, Mercury asserted that because it was currently subject to an order being administered by the Federal Trade Commission (FTC) concerning practices identical to those at issue in the current action, the ADTPA was not applicable under the terms of Ark. Code Ann. § 4-88-101 (Repl. 2001). Thus, according to Mercury, the matter should be dismissed. The State responded that this matter should not be addressed under our case of Villines v. Harris, 340 Ark. 319, 11 S.W.3d 516 (2000). It further contended that the ADTPA did apply because Mercury was not in compliance with any order administered by the FTC, as evidenced by a letter from the FTC stating that it was investigating Mercury for engaging in practices in violation of the FTC order. The State also asserted that many of the violations which occurred in Arkansas took place prior to the entry of the FTC order dated February 27, 2000. For these reasons, the State maintained, Mercury’s motion to dismiss should be denied.

A hearing was held on the motion on January 7, 2003, at which time the court heard testimony from Arkansas business owners who had been charged for Mercury’s services on their phone bills without their knowledge.

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Mercury Marketing Technologies of Delaware, Inc. v. State Ex Rel. Beebe
189 S.W.3d 414 (Supreme Court of Arkansas, 2004)

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Bluebook (online)
189 S.W.3d 414, 358 Ark. 319, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mercury-marketing-technologies-of-delaware-inc-v-state-ex-rel-beebe-ark-2004.