Fed. Trade Comm'n v. Amg Servs., Inc.
| Decision Date | 03 September 2021 |
| Docket Number | Case Nos. 2:12-cv-00536-GMN-VCF,2:18-cv-01813-GMN-DJA,2:18-cv-02281-GMN-VCF,2:17-cv-02966-GMN-NJK,2:17-cv-02967-GMN-BNW,2:17-cv-02968-GMN-NJK,2:17-cv-02969-GMN-DJA |
| Citation | 558 F.Supp.3d 946 |
| Parties | FEDERAL TRADE COMMISSION, Plaintiff, v. AMG SERVICES, INC., et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
Blaine T. Welsh, U.S. Attorney's Office, Las Vegas, NV, Kimberly L. Nelson, Federal Trade Commission, Washington, DC, Conly J. Schulte, Fredericks Peebles & Morgan LLP, Louisville, CO, for Plaintiff.
Conly J. Schulte, Pro Hac Vice, Fredericks Peebles & Morgan LLP, Louisville, CO, Francis J. Nyhan, Fredericks Peebles & Morgan LLP, Sacramento, CA, Joshua M. Dickey, Bailey Kennedy, Las Vegas, NV, Nicole Ducheneaux, Fredericks Peebles & Morgan LLP, Omaha, NE, for Defendant Red Cedar Services, Inc.
Joshua M. Dickey, Bailey Kennedy, Las Vegas, NV, Nicole Ducheneaux, Fredericks Peebles & Morgan LLP, Omaha, NE, Conly J. Schulte, Fredericks Peebles & Morgan LLP, Louisville, CO, Francis J. Nyhan, Fredericks Peebles & Morgan LLP, Sacramento, CA, for Defendant SFS, Inc.
Conly J. Schulte, Fredericks Peebles & Morgan LLP, Louisville, CO, Paul C. Ray, Paul C. Ray, Chtd., North Las Vegas, NV, for Defendants AMG Capital Management, LLC, Level 5 Motorsports, LLC, Black Creek Capital Corporation, Broadmoor Capital Partners, LLC, Scott A. Tucker, Park 269 LLC.
Von S. Heinz, Lewis Roca Rothgerber Christie LLP, Las Vegas, NV, Conly J. Schulte, Fredericks Peebles & Morgan LLP, Louisville, CO, Darren J. Lemieux, E. Leif Reid, Lewis Roca Rothgerber LLP, Reno, NV, Jeffrey D. Morris, Nick J. Kurt, Berkowitz Oliver Williams Shaw & Eisenbrandt LLP, Kansas City, MO, for Defendant LeadFlash Consulting, LLC.
Paul C. Ray, Paul C. Ray, Chtd., North Las Vegas, NV, for Defendant Kim C. Tucker.
Kim C. Tucker, Prairie Village, KS, Pro Se.
Robert D. Campbell, Pro Se.
Gloria M. Navarro, District Judge Pending before the Court is a Motion for Summary Judgment, (ECF No. 900), filed by Defendants Park 269, LLC ("Park 269") and Kim C. Tucker ("Kim Tucker") (collectively "Relief Defendants").3 Plaintiff Federal Trade Commission ("FTC") filed a Response, (ECF No. 938), and the Relief Defendants filed a Reply, (ECF No. 949).
Also pending before the Court is a Motion for Summary Judgment, (ECF No. 913), filed by Defendants AMG Capital Management, LLC ("AMG Capital"); Level 5 Motorsports, LLC ("Level 5"); Black Creek Capital Corporation ("Black Creek"); Broadmoor Capital Partners ("Broadmoor"); and Scott A. Tucker ("Scott Tucker") (collectively "Tucker Defendants").4 The FTC filed a Response, (ECF No. 940), and the Tucker Defendants filed a Reply, (ECF No. 950).
Also pending before the Court is a Motion for Summary Judgment, (ECF No. 907), filed by the FTC. The Relief Defendants filed a Response, (ECF No. 935), as did the Tucker Defendants, (ECF No. 941). The FTC filed a Reply, (ECF No. 952).
For the reasons discussed below, the Court GRANTS in part and DENIES in part5 FTC's Motion and GRANTS in part and DENIES in part the Tucker Defendants’ and Relief Defendants’ (collectively "Defendants") Motions.6
This action was brought by the FTC, asserting that the "high-fee, short-term payday loans" offered by former Defendants AMG Services, Inc. ("AMG"), SFS, Inc. ("SFS"), Red Cedar Services, Inc. ("Red Cedar"), and MNE Services, Inc. ("MNE") (collectively "Lending Defendants") violated section 5 of the Federal Trade Commission Act of 1914, 15 § U.S.C. 45(a)(1), the Truth in Lending Act of 1968, 15 U.S.C. § 1601(a), and Regulation Z, 12 C.F.R. § 1026(a). (Am. Compl. 15:1–20:6, ECF No. 386).
The FTC has filed its Motion for Summary Judgment against the only remaining parties that did not settle the claims against them. The remaining defendants are AMG Capital, Level 5, Black Creek, and Broadmoor (collectively "Corporate Lending Defendants") as well as Scott Tucker. The FTC seeks injunctive relief against Scott Tucker and equitable monetary relief from the Corporate Lending Defendants and Scott Tucker. The FTC also seeks disgorgement from the Relief Defendants.
Scott Tucker controlled, founded, or was president of a host of short-term payday loan marketing and servicing companies, including, inter alia, National Money Service, Inc. ("NMS"), CLK Management LLC ("CLK"), and Universal Management Services, Inc. ("UMS") (collectively "Scott Tucker Loan Servicing Companies"). (Exs. 1–2, 4–5, 14 to Singhvi Decl., ECF Nos. 908-1–2, 4–5, 14). Between 2003 and 2008, the Scott Tucker Loan Servicing Companies entered into agreements with the Santee Sioux Tribe of Nebraska, the Miami Tribe of Oklahoma, and the Modoc Tribe of Oklahoma to allow the tribes to become "authorized lenders" for CLK. (See Exs. 14–15, 18 to Singhvi Decl., ECF Nos. 908-14–15, 18). The tribes subsequently formed SFS, Red Cedar, and MNE. (Exs. 17, 19–20 to Singhvi Decl., ECF Nos. 908-17, 19–20). In 2006, CLK transferred its trademarks for 500 FastCash, OneClickCash, Ameriloan, USFastCash, and UnitedCashLoans ("Loan Portfolios") to the new tribal entities. (Ex. 6 to Singhvi Decl., ECF No. 908-6). Following these transfers, SFS, Red Cedar, and MNE became the lenders for the Loan Portfolios. (Dempsey Dep. at 15–19, ECF No. 908-7). In 2008, CLK was acquired by AMG Services, Inc., a tribal corporation created by the Miami Tribe. (Ex. 46 to Singvhi Decl., ECF No. 908-46).
On December 27, 2012, the Court signed an Order, (ECF No. 296), entering the parties’ joint stipulation for preliminary injunction and bifurcation. The Bifurcation Order divided the litigation into two phases: Phase I, a liability phase, and Phase II, a relief phase. (Id. 9:1–10:23). During Phase I of the proceedings, the Court would adjudicate the merits of the FTC's claims for violations of the FTC Act, TILA, and EFTA. (Id. 9:1–24). During Phase II of the proceedings, the Court would adjudicate the remaining issues, including the individual liability of the various Defendants. (Id. 10:119). On January 28, 2014, Magistrate Judge Cam Ferenbach entered a Report and Recommendation ("R&R"), (ECF No. 539), granting summary judgment in favor of the FTC on two of its four causes of action. In his R&R, Magistrate Judge Ferenbach reviewed the websites through which the Lending Defendants sold their loans as well as the Loan Note Disclosures contained therein. (See, e.g., R&R 2:12–16).
On May 28, 2014, this Court entered an Order, (ECF No. 584), adopting the R&R. Specifically, the Court agreed that "the net impression of the Loan Note Disclosure is likely to mislead borrowers acting reasonably under the circumstances because the large prominent print in the TILA Box implies that borrowers will incur one finance charge while the fine print creates a process under which multiple finance charges will be automatically incurred unless borrowers take affirmative action." (Order 15:8–12, ECF No. 584). Subsequently, the Lending Defendants stipulated to settle all of the FTC's claims against them resulting in monetary judgments in the aggregate amount of $25,496,677. (See generally Orders, ECF Nos. 727, 760–762, 888–889).
In the instant Motion, the FTC seeks summary judgment on the Defendants’ remaining affirmative defenses as well as the issues of individual liability, common enterprise liability, liability of the Relief Defendants, and remedies. (Pl.s’ MSJ 14:22–23, ECF No. 907). The Court addresses each of these issues in turn, after first addressing several of Defendants’ evidentiary objections.
The Federal Rules of Civil Procedure provide for summary adjudication when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See id. "Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor." Diaz v. Eagle Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04 (9th Cir. 1999) ). A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex Corp. v. Catrett, 477 U.S. 317, 323–24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
In determining summary judgment, a court applies a burden-shifting analysis. C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–24, 106 S.Ct. 2548. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159–60, 90 S.Ct. 1598, 26...
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