IN THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF NEW HAMPSHIRE

FEDERAL TRADE COMMISSION,
Plaintiff,

v.

GREENHORSE COMMUNICATIONS, INC.,
a corporation, and

LYNN HABERSTROH,
an individual, Defendants.

CIVIL ACTION NO.

 

STIPULATED FINAL JUDGMENT AND ORDER FOR PERMANENT INJUNCTION

Plaintiff, the Federal Trade Commission ("Commission"), has commenced this action by filing its Complaint. The Commission and defendants GreenHorse Communications, Inc. ("GreenHorse") and Lynn Haberstroh ("Haberstroh"), represented by the attorneys listed below, have agreed to the Court’s entry of this Stipulated Final Judgment and Order for Permanent Injunction ("Order") to resolve all matters in dispute between them in this action, without admission of liability, and without trial or adjudication of any issue of law or fact herein. Plaintiff Commission and the defendants having requested the Court to enter this Order,

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows:

I. FINDINGS

1. This is an action by the Commission instituted under Sections 13(b) and 19 of the Federal Trade Commission Act ("the FTC Act"), 15 U.S.C. 53(b) and 57b. The complaint seeks permanent injunctive relief against the defendants for alleged unfair or deceptive acts or practices in connection with the sale of a business venture.

2. The Court has jurisdiction over the subject matter of this case and over the defendants. Venue in the District of New Hampshire is proper under 28 U.S.C.  1391(b) and (c), and 15 U.S.C.  53(b).

3. The Complaint states a claim upon which relief may be granted against the defendants under Sections 5(a), 13(b), and 19 of the FTC Act, as amended, 15 U.S.C.  45(a), 53(b), and 57b.

4. The Commission has the authority under Sections 13(b) and 19 of the FTC Act, 15 U.S.C.   53(b) and 57b, to seek the relief it has requested.

5. The activities of the defendants as alleged in the Commission’s complaint were or are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. 44.

6. Entry of this Order is in the public interest.

II. DEFINITIONS

For purposes of this Order, the following definitions shall apply:

1. "Franchise" is defined as that term is defined by Section 436.2(a) of the Commission’s Trade Regulation Rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures" ("the Franchise Rule"), 16 C.F.R.  436, which is attached as Exhibit A, and includes "business opportunity ventures" as discussed in the Commission’s Final Interpretive Guide for the Franchise Rule, 44 Fed. Reg. 49966 (Aug. 24, 1979). The term "franchise" in this Order shall also encompass any successor definition in any later trade regulation rule promulgated by the Commission.

2. "Business venture" is defined as any written or oral business arrangement, however denominated, whether or not covered by the Franchise Rule, which consists of the payment of any consideration for:

a. The right or means to offer, sell, or distribute goods or services (whether or not identified by a trademark, service mark, trade name, advertising, or other commercial symbol); and

b. More than nominal assistance to any person or entity in connection with or incident to the establishment, maintenance, or operation of a new business or the entry by an existing business into a new line or type of business, including but not limited to recommendations of companies providing location services.

III. PROHIBITED BUSINESS PRACTICES

IT IS THEREFORE ORDERED that the defendants, and their officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, are permanently restrained and enjoined from violating any provision of the Franchise Rule, or as the Rule may hereinafter be amended. The Franchise Rule is incorporated herein as if fully set forth verbatim.

IV. CONSUMER REFUND AND RESCISSION PROGRAM

IT IS FURTHER ORDERED that:

A. Defendant GreenHorse shall, within 7 calendar days of the issuance of this order, send by registered mail, a written notice offering a refund and contract rescission, in the form attached as Exhibit B, to every person who has purchased the GreenHorse Opportunity business venture.

B. Defendant GreenHorse shall, within 30 calendar days of receiving a refund and rescission request, send, by registered mail, a check to the purchaser for the full amount due and a confirmation that the purchaser’s contract has been rescinded.

C. Defendant GreenHorse shall, within 7 calendar days of receiving such a request, send a notification containing the name, address and telephone number of the person who sent the refund and rescission request to:

Daniel P. Barry, Esq.
Federal Trade Commission
101 Merrimac Street, Suite 810
Boston, MA 02114

D. Defendant GreenHorse shall, within 7 calendar days of the issuance of this order, send to Attorney Daniel P. Barry of the Federal Trade Commission a list containing the names, addresses and telephone numbers of every person who purchased a GreenHorse Opportunity business venture.

E. This action and the relief awarded herein, is in addition to and not in lieu of any other civil or criminal remedies as may be provided by law, including any other proceedings the Commission may initiate to enforce this Order.

V. CUSTOMER LISTS

IT IS FURTHER ORDERED that the defendants, and their officers, agents, servants, employees, and attorneys, and all other persons or entities in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, are permanently restrained and enjoined from selling, renting, leasing, transferring, or otherwise disclosing the name, address, telephone number, credit card number, bank account number, e-mail address, or other identifying information of any person who paid any money to any defendant, at any time prior to entry of this Order, in connection with the sale of any business venture. Provided, however, that the defendants may disclose such identifying information to a law enforcement agency or as required by any law, regulation, or court order.

VI. COSTS AND ATTORNEY FEES

IT IS FURTHER ORDERED that:

A. Each party to this judgment shall bear its own costs and attorney fees incurred in connection with this action.

B. Notwithstanding any other provision of this Order, the defendants agree that the facts as alleged in the complaint in this action shall be taken as true in any subsequent litigation filed by the Commission to enforce its rights pursuant to this Order, including but not limited to a nondischargeability complaint in any bankruptcy proceeding.

VII. ADMINISTRATION ASSISTANCE AND COMPLIANCE

IT IS FURTHER ORDERED that:

A. The defendants shall aid and assist the Commission or its designated agent, without compensation and in any manner reasonably requested in writing by Commission staff, in the administration of this Order. Such aid and assistance may include but is not limited to:

1. Providing the Commission or its designated agent with the names and last known addresses of all present and past customers and employees of the defendants, and such other information regarding the defendants’ customers and employees that the Commission or its designated agent deems relevant to the administration of this Order.

2. Permitting the Commission or its designated agent reasonable access to all documents pertaining to the defendants’ customers and employees.

3. Cooperating fully in procuring the assistance of any third party that the Commission or its designated agent may deem necessary for the administration of this Order.

B. For a period of five (5) years from the date of this Order, the defendants shall maintain, preserve and make available for examination and copying by a duly authorized representative of the Commission, upon reasonable notice, during normal business hours, all books, accounts, written materials or other records reasonably necessary to assess the defendants’ compliance with this Order, including, but not limited to, the following records:

1. A copy of each advertisement, radio script, television script, and film published or disseminated by the defendants.

2. Records disclosing the date or dates each advertisement, script or film was published or disseminated.

3. The name and address of each publication or broadcast media disseminating each advertisement, script or film.

4. A copy of each brochure, flyer or other type of promotional literature published or disseminated by the defendants.

5. A copy of each telephone script used by the defendants.

6. The name, address, and telephone number of all purchasers of the defendants’ goods or services.

C. For a period of five (5) years from the date of this Order, the defendants shall deliver a copy of this Order, the Franchise Rule, and the Statement of Basis and Purpose for that Rule to all present and future sales persons, employees, agents, servants, independent contractors, those for whom the defendants act as consultants, and all persons in active concert or participation with the defendants in the sale of any business venture, and secure from each such person a signed statement acknowledging receipt of a copy of this Order and their written agreement to adhere thereto. This paragraph is not intended to apply to suppliers, advertising agents or media, or vendors.

D. For a period of five (5) years from the date of this Order, the defendants shall notify the Commission at least thirty (30) days prior to any proposed change in the defendants’ business including, but not limited to, merger, incorporation, dissolution, assignment or sale which results in the emergence of a successor corporation, the creation or dissolution of a subsidiary or parent, or any other change which may affect the defendants’ obligations under this judgment. In the event that a successor corporation emerges, an assignment occurs, or a subsidiary is created during this five (5) year period, such notice shall state that the defendants have delivered a copy of this Order to such successor, assignee or subsidiary and have informed them that this Order is binding upon them.

E. For a period of five (5) years from the date of this Order, defendant Haberstroh shall notify the Commission in writing within thirty (30) days of each affiliation with a new business or employment, including self-employment, whose activities include the sale or offering for sale of a business venture, or her affiliation with a new business or employment in which her duties and responsibilities involve the sale or offering for sale of a business venture.

F. Within ninety (90) days after the entry of this Order, the defendants shall file with the Commission a report stating the fact and manner of their compliance with this Order, including the names and positions of all persons provided a copy of this Order pursuant to Paragraph VII(C) above.

G. All written notices that the defendants are required to provide to the Commission shall be mailed to:

Regional Director, Boston Regional Office
Federal Trade Commission
101 Merrimac Street, Suite 810
Boston, Massachusetts 02114

H. The Commission may otherwise monitor the defendants’ compliance with this Order by all lawful means available, including, but not limited to, the use of investigators or others posing as consumers.

VIII. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for all purposes.

IX. WAIVER OF CLAIMS

Defendants GreenHorse and Haberstroh waive any claims that either of them may have held under the Equal Access to Justice Act, 28 U.S.C.  2412, amended by Pub.L. 104-121, 110 Stat. 847, 863-64 (1996), concerning prosecution of this action to the date of this Order.

SO ORDERED this       day of          , 1998.

UNITED STATES DISTRICT JUDGE

The parties hereby stipulate and agree, without further notice to any of them, to entry of the foregoing Order, which shall constitute a Final Judgment against defendants GreenHorse and

Haberstroh in this action.

STIPULATED AND AGREED TO BY:

FEDERAL TRADE COMMISSION
Andrew D. Caverly, Acting Director
Boston Regional Office

 


Date


Daniel P. Barry, Esq. (MA BBO # 564037)
Pamela J. Wood, Esq. (MA BBO # 533590)
Federal Trade Commission
101 Merrimac Street
Boston, MA 02114
(617) 424-5960

Date

DEFENDANTS
Lynn Haberstroh, President
GreenHorse Communications, Inc.
1 Bayside Road
Greenland, NH 03840
(603) 433-2499

Date


Lynn Haberstroh, Individually

Date

Jonathan S. Springer, Esq. NH Bar # 2418
Attorney for the Defendants
Shaines & McEachern
25 Maplewood Avenue
Portsmouth, NH 03802
(603) 436-3110

Date

 

EXHIBIT A

[FRANCHISE RULE]

EXHIBIT B

[GreenHorse Communications, Inc. Letterhead]

Dear GreenHorse Opportunity business venture purchaser:

GreenHorse Communications, Inc. is offering to you, as a purchaser of its GreenHorse Opportunity business venture, the option of canceling your involvement in this venture and receiving a full refund of the program’s purchase price. If you would like to take advantage of this offer, you may do so by sending a written request for cancellation of your contract and for a refund to:

GreenHorse Communications, Inc
1 Bayside Road
Greenland, NH 03840-2117

Any request for a refund must be made within 30 days of the date of receipt of this letter. If you request a refund, you must return the GreenHorse materials in your possession and stop using the GreenHorse name. You must also return all computer hardware and software provided to you by GreenHorse. Please include your name, address, and telephone number in your request, and send a separate copy of the request to:

Daniel P. Barry, Esq.
Federal Trade Commission
101 Merrimac Street, Suite 810
Boston, MA 02114-4719

Sincerely,

GreenHorse Communications, Inc.