UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
FEDERAL TRADE COMMISSION,
Plaintiff,
v.
THE CENTURY CORPORATION, a corporation, and RICHARD A.
HAFFENDEN, an individual, and CLIFFORD BELVIN, an individual,
Defendants.
CIVIL NO. 1:97CV 0130
JUDGE WILLIAM C.LEE
U.S. MAGISTRATE JUDGE
ROGER B. COSBEY
STIPULATED FINAL JUDGMENT AND ORDER
Plaintiff, the Federal Trade Commission ("FTC"), filed its complaint pursuant
to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§
53(b), charging Defendants with violations of Section 5(a) of the FTC Act, 15 U.S.C.
§ 45(a). On April 8, 1997, this Court granted the FTC's motion for a temporary
restraining order with asset freeze, appointment of a temporary receiver and other
equitable relief, and ordered Defendants to show cause why a preliminary injunction should
not issue against them. The parties subsequently agreed to entry of a stipulated
preliminary injunction, which this Court granted on April 22, 1997.
NOW, the FTC, by and through its counsel, and Defendants The Century Corporation and
Richard A. Haffenden, by and through their counsel, and Clifford Belvin, appearing on
behalf of himself, have agreed to the entry of this Stipulated Final Judgment and Order
("Order") by this Court, to resolve all matters of dispute between them in this
action without trial or adjudication of any issue of law or fact. The said parties having
requested the Court to enter this Order, it is therefore ORDERED, ADJUDGED AND DECREED as
follows:
FINDINGS
1. This Court has jurisdiction over the subject matter of this case and has
jurisdiction over the Defendants. Venue in the Northern District of Indiana is proper.
2. The Complaint states a claim upon which relief may be granted under Sections 5(a)
and 13(b) of the FTC Act, 15 U.S.C. §§ 45 and 53(b).
3. The Commission has the authority under Section 13(b) of the FTC Act, 15 U.S.C.
§ 53(b), to seek the relief it has requested.
4. The activities of Defendants are in or affecting commerce, as "commerce"
is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
5. By stipulating and consenting to the entry of this Order, Defendants do not admit
any of the allegations in the Complaint. Likewise, by executing this Order, Plaintiff does
not admit that any defense to the Complaint is valid.
6. This action and the relief awarded herein is in addition to, and not in lieu of,
other remedies as may be provided by law, including both civil and criminal remedies; and,
7. Entry of this Order is in the public interest.
DEFINITIONS
For purposes of this Order, the following definitions shall apply:
- 1. "Defendants" means The Century Corporation, Richard A. Haffenden, and
Clifford Belvin, and their officers, agents, directors,
servants, employees, salespersons, independent contractors, corporations, subsidiaries,
affiliates, successors, assigns, all other persons or entities directly or indirectly
under their control or under common control with them, 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, whether acting directly or through any trust, corporation,
subsidiary, division, or other device, and each of them.
-
- 2. "Person" means a natural person, organization or other legal entity,
including a corporation, partnership, proprietorship, association, cooperative, government
or governmental subdivision or agency, or any other group or combination acting as an
entity.
ORDER
I.
IT IS THEREFORE ORDERED, in connection with the offering for sale,
sale, distribution, marketing or sponsorship of any advertisement, publication, program or
product, that Defendants are hereby permanently restrained and enjoined from:
- A. making any express or implied representation of material fact that is false or
misleading, including, but not limited to, any misrepresentation:
-
- 1. concerning distribution of any such advertisement, publication, program, or product;
-
- 2. concerning printing or publishing of any such advertisement, publication, program, or
product;
-
- 3. concerning any person's approval or authorization or obligation to make any payment
for any such advertisement, publication, program, or product;
-
- 4. concerning prior approval or authorization or sponsorship of any such advertisement,
publication, program, or product by any person;
-
- 5. concerning the cost of any such advertisement, publication, program, or product;
-
- 6. concerning affiliation with any local, state, national, or other entity;
-
- 7. concerning the use, or distribution, or tax deductibility, of any payment or payments
received.
-
- B. using any alias, pen name, pseudonym or otherwise misrepresenting their true
identity.
II.
IT IS FURTHER ORDERED that Defendants are permanently restrained and
enjoined from selling, renting, leasing, transferring, or otherwise disclosing the name,
address, telephone number, credit card number, bank account number, or other identifying
information of any person who paid any money to any Defendant, at any time, in connection
with the offering for sale, sale, distribution, marketing, or sponsorship of any
advertisement, publication, program or product. Provided, however, that Defendants may
disclose such identifying information to a law enforcement agency or as required by any
law, regulation, or court order.
III.
IT IS FURTHER ORDERED that Defendant Richard A. Haffenden and
Defendant Clifford Belvin shall be jointly and severally liable to the Commission for
consumer redress in the sum of $55,000, subject to the conditions set forth in Paragraph
VI of this Order. Defendant Haffenden shall pay said amount within ten (10) working days
after the date of entry of this Order. Such payment shall be remitted to the Federal Trade
Commission, Eaton Center--Suite 200, 1111 E. Superior Avenue, Cleveland,
Ohio 44114, by certified or cashier's check.
IV.
IT IS FURTHER ORDERED that:
- A. Any corporate funds remaining after the court-appointed Corporate Receiver
("Receiver") has liquidated the personal property and disposed of the business
records of the Defendant Corporation pursuant to the Court's Order dated November 19,
1997, and after the Receiver has been compensated, shall be transferred to the Commission,
subject to the conditions set forth in Paragraph V of this Order. Such payment shall be
remitted to the Federal Trade Commission, Eaton Center--Suite 200, 1111 E. Superior
Avenue, Cleveland, Ohio 44114, by certified or cashier's check.
-
- B. Defendants' relinquish title to the Commission of the customer lists and publications
previously transferred to the Commission by Court Order, and shall transfer to the
Commission and relinquish title to the Commission of customer lists and publications not
previously transferred to the Commission by Court Order. Defendants' have no right to
contest the Commission's actions with respect to such customer lists and publications.
V.
IT IS FURTHER ORDERED that:
- A. Funds transferred to the Commission pursuant to Paragraph III and Paragraph IV of
this Order shall fully satisfy all monetary claims asserted by the Commission in the
Complaint filed herein and shall be used to provide redress to purchasers of Defendants'
advertisements and pay expenses of administering the redress fund.
-
- B. If the Commission determines, in its sole discretion, that redress to purchasers is
wholly or partially impracticable, any funds not so used shall be deposited into the
United States Treasury, or shall be used to educate consumers allegedly affected by the
practices in the Commission's Complaint in this matter. No portion of the payment as
herein provided shall be deemed a payment of any fine, penalty or punitive assessment.
Defendants shall have no right to contest the manner of distribution chosen by the
Commission.
VI.
The FTC's agreement to this Order is expressly premised upon the truthfulness,
accuracy, and completeness of financial statements filed by Defendants with the Court in
this matter, and submitted to the FTC, and on the deposition testimony of Defendant
Richard A. Haffenden regarding those statements given on June 12, 1997, and Defendant
Clifford Belvin regarding those statements given on June 26, 1997, which contain material
information upon which the FTC has relied in negotiating and agreeing to the terms of this
Order. If, upon motion by the Commission, the Court finds that
any Defendant failed to disclose any material asset, or materially misrepresented the
value of any asset, or made any other material misrepresentation in or omission from the
Financial Statements or deposition testimony, the Order herein shall be reopened against
that Defendant(s) for the purpose of determining an appropriate additional amount for the
Defendant to pay as redress to consumers in accordance with Paragraph V above, provided,
however, one Defendant shall not be responsible for and shall have no liability under
this Paragraph for any misrepresentation, described in this Paragraph, committed by
another Defendant. Provided, further, that in all other respects, this Order shall
remain in full force and effect unless otherwise ordered by this Court; provided
further that, for purposes of this Paragraph, and any subsequent proceedings to
enforce payment under this Order, including but not limited to a nondischargeability
complaint filed in a bankruptcy proceeding, each Defendant waives any right to contest any
of the allegations of the Commission's complaint; and provided further that
proceedings instituted under this Paragraph are 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 FTC may initiate to enforce this Order.
VII.
IT IS FURTHER ORDERED that the freeze of Defendant Richard A.
Haffenden and Defendant Clifford Belvin's assets, as ordered in Paragraph III of the
Temporary Restraining Order first entered in this matter on April 8, 1997, and continued
by stipulation of the parties, to the extent not previously released by any separate Order
of this Court, shall be lifted upon: (i) entry of this Order; and (ii) Defendants' payment
to the FTC of the amount and in the manner set forth in Paragraph III of this Order.
VIII.
IT IS FURTHER ORDERED that Defendants Richard A. Haffenden and
Clifford Belvin, and each of them, are hereby restrained and enjoined from engaging or
participating in any capacity whatsoever, whether directly or in concert with others, or
through any business entity or device, in the offering for sale, sale, distribution,
marketing, or sponsorship of any advertisement in any publication or program, without
first obtaining a performance bond. The principal sum of said bond shall be in the amount
of $500,000.00 (five hundred thousand dollars).
- A. The bond shall be deemed continuous and remain in full force and effect as long as
Defendants Richard A. Haffenden and Clifford Belvin, and each of them, continue to engage
or participate in any capacity in the offering for sale, sale, distribution, marketing, or
sponsorship of any advertisement in any publication or program, and for three years after
Defendants Richard A. Haffenden and Clifford Belvin, and each of them, cease to engage or
participate in the offering for sale, sale, distribution, marketing, or sponsorship of any
advertisement in any publication or program. The bond shall cite this Order as the subject
matter of the bond, and shall provide surety thereunder against financial loss resulting
from whole or partial failure of performance due, in whole or in part, to any violation of
Section 5 of the FTC Act, or any provision of this Order.
-
- B. Said bond shall be an insurance agreement providing surety for financial loss issued
by a surety company that is admitted to conduct a surety business in each of the states in
which Defendants Richard A. Haffenden and Clifford Belvin are doing business and that
holds a Federal Certificate of Authority as Acceptable Surety on Federal Bond and
Reinsuring. Each such bond shall be in favor of both (i) the Commission for the benefit of
any consumer injured as a result of the failure of Defendant Richard A. Haffenden and
Clifford Belvin, and each of them, to comply with Section 5 of the FTC Act or the
provisions of this Order, and (ii) any consumer so injured.
-
- C. The bond required by this Paragraph is in addition to, and not in lieu of, any other
bond required by law. Defendants Richard A. Haffenden and Clifford Belvin, and each of
them, may satisfy the bond required by this Paragraph and any other bond required by law
in a single performance bond so long as all bond requirements of this Order and any other
bond requirement are fully complied with.
-
- D. If Defendant Richard A. Haffenden or Defendant Clifford Belvin obtains such bond, he
shall provide the executed original of the bond or bonds required by this Paragraph to the
Commission's Cleveland Regional Office, Eaton Center-- Suite 200, 1111 E. Superior Avenue,
Cleveland, OH 44114, at least ten (10) days before engaging or participating in the
offering for sale, sale, distribution, marketing, or sponsorship of any advertisement in
any publication or program.
-
- E. The Commission may execute against such performance bond if it demonstrates to this
Court, by a preponderance of the evidence, that after the effective date of this Order,
Defendant Richard A. Haffenden or Defendant Clifford Belvin, while engaging or
participating in the offering for sale, sale, distribution, marketing, or sponsorship of
any advertisement in any publication or program, made any false or misleading
representation of material fact, directly or by implication, prohibited by Section 5 of
the FTC Act or the provisions of this Order.
-
- F. Proceedings instituted under this Paragraph with respect to any performance bond are
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.
-
- G. The performance bond required by this Paragraph shall provide that the surety
company, within thirty (30) days following receipt of notice that a final order against
Defendant Richard A. Haffenden or Defendant Clifford Belvin for consumer redress or
disgorgement in an action brought under this Order or under the provisions of the Federal
Trade Commission Act has been entered finding that Defendant Richard A. Haffenden or
Defendant Clifford Belvin has violated the terms of this Order or the Federal Trade
Commission Act and determining the amount of consumer redress or disgorgement to be paid,
shall pay to the Commission so much of the performance bond as does not exceed the amount
of consumer redress or disgorgement ordered, and which remains unsatisfied at the time
notice is provided to the surety company; provided, however, that, if Defendant
Richard A. Haffenden or Defendant Clifford Belvin has agreed to the entry of an order, a
specific finding that Defendant Richard A. Haffenden or Defendant Clifford Belvin violated
the terms of this Order or the provisions of the Federal Trade Commission Act shall not be
necessary. A copy of the notice provided for herein shall be mailed to Defendant Richard
A. Haffenden or Defendant Clifford Belvin at his last known address.
-
- H. Defendant Richard A. Haffenden or Defendant Clifford Belvin shall not disclose the
existence of the performance bond to any consumer, or other purchaser or prospective
purchaser of any advertisement in or sponsorship of any publication, program or product,
that is advertised, promoted, offered for sale, sold, or distributed via telemarketing or
direct mailing, without also disclosing in a like manner, at the same time, the following:
"As required by order of the United States District Court for the Northern District
of Indiana in settlement of allegations that Richard A. Haffenden, Clifford Belvin, and
The Century Corporation engaged in false and misleading representations in connection with
offering for sale, sale, distribution, marketing or sponsorship of advertisements,
publications, or programs."
IX.
IT IS FURTHER ORDERED that, for a period of three years commencing
with the date of entry of this Order, Defendants shall notify in writing the Cleveland
Regional Office of the Federal Trade Commission, Regional Director, Eaton Center-- Suite
200, 1111 E. Superior Avenue, Cleveland Ohio 44114, of:
- A. any change in Defendant Richard A. Haffenden or Defendant Clifford Belvin's
employment status, within ten working days of such change. Such notice shall include the
name and address of each business that he is affiliated with or employed by, a statement
of the nature of the business, and a statement of Defendant Richard A. Haffenden or
Defendant Clifford Belvin's duties and responsibilities in connection with the business;
and
-
- B. any proposed change in the structure of any business entity owned or controlled by
Defendant Richard A. Haffenden or Defendant Clifford Belvin, that engages in the offering
for sale, sale, distribution, marketing, or sponsorship of any advertisement in any
publication or program, such as creation, incorporation, dissolution, assignment, sale,
creation or dissolution of subsidiaries, or any other changes that may affect compliance
obligations arising out of this Order, within thirty days prior to the effective date of
any proposed change.
X.
IT IS FURTHER ORDERED that, for a period of three years commencing
with the date of entry of this Order, for purposes of determining or securing compliance
with this Order, in connection with The Century Corporation, or any other business owned
or controlled in whole or in part by Defendant Richard A. Haffenden or Defendant Clifford
Belvin, that engages in the offering for sale, sale, distribution, marketing, or
sponsorship of any advertisement in any publication or program, Defendant Richard A.
Haffenden or Defendant Clifford Belvin shall, upon written notice:
- A. permit representatives of the FTC, within five business days of receipt of such
request, to interview the officers, directors or employees of any such business, subject
to the reasonable convenience of Defendant Richard A. Haffenden or Defendant Clifford
Belvin and the person to be interviewed and without restraint or interference from
Defendant Richard A. Haffenden or Defendant Clifford Belvin, at a location reasonably
convenient to the person to be interviewed, Defendant Richard A. Haffenden or Defendant
Clifford Belvin, and the FTC. Such officers, directors, or employees may have counsel
present;
-
- B. produce documents requested by the FTC within five business days of receipt of such
request;
-
- C. permit representatives of the FTC to depose any officers, directors, or employees of
any such business within ten business days of receipt of such request; and
-
- D. permit representatives of the FTC, within five business days of receipt of such
request, access during normal business hours to any office or facility in which documents
and records are stored or held and to inspect and copy any such documents in Defendant
Richard A. Haffenden or Defendant Clifford Belvin's control.
XI.
IT IS FURTHER ORDERED that, for a period of three years from the date
of entry of this Order, Defendants shall:
- A. immediately provide a copy of this Order to, and obtain a signed and dated
acknowledgment of receipt of the same, from each officer, director, managing agent,
employee, or independent contractor in any company or other business entity directly or
indirectly owned, operated, or controlled by Defendant Richard A. Haffenden or Defendant
Clifford Belvin that engages in the offering for sale, sale, distribution, marketing, or
sponsorship of any advertisement in any publication or program, and to each officer,
director, and managing agent of any company or other business entity that engages in the
offering for sale, sale, distribution, marketing, or sponsorship of any advertisement in
any publication or program at which Defendant Richard A. Haffenden or Defendant Clifford
Belvin is employed; and
-
- B. maintain, and upon reasonable notice make available to the FTC's representatives, the
original and dated acknowledgments of the receipts required by this Paragraph.
XII.
Each party to this Order hereby agrees to bear its own costs and attorney fees incurred
in connection with this action; provided, however, in the event the FTC initiates
proceedings to enforce any provision of this Order and provided further this Court
determines that Defendants have violated any term or provision of this Order, Defendants
shall pay the costs and attorney fees incurred by the FTC in connection with such
proceedings.
XIII.
IT IS FURTHER ORDERED that this Court shall retain jurisdiction of
this matter for the purpose of enabling the FTC and Defendants to apply to the Court at
any time for such further orders or directives as may be necessary or appropriate for the
interpretation or modification of this Order, for the enforcement of compliance therewith,
or the punishment of violations thereof.
XIV.
Defendants waive all claims under the Equal Access to Justice Act, 28 U.S.C. § 2412,
as amended by Pub. L. No. 104-121, 110 Stat. 847, 863-64 (1996), and all rights to seek
appellate review or otherwise challenge or contest the validity of this Order, or the
temporary or preliminary orders entered in this proceeding, and further waive and release
any claim they may have against the FTC, the receiver, or their employees, agents, or
representatives.
SO ORDERED, this day of , 199 .
William C. Lee
United States District Judge
The parties consent to the terms and conditions set forth above and to entry of this
Stipulated Final Judgment and Order without further notice to them.
FOR THE FEDERAL TRADE
COMMISSION:
DANA C. BARRAGATE
Federal Trade Commission
Cleveland Regional Office
Eaton Center -- Suite 200
1111 E. Superior Avenue
Cleveland, Ohio 44114
(216) 263-3402
Date
FOR THE DEFENDANTS:
The Century Corporation
Richard A. Haffenden
By: ROBERT W. EHERENMAN, ESQ.
Haller & Colvin, P.C.
444 East Main Street
Fort Wayne, Indiana 46815
Date
Richard A. Haffenden:
By: RICHARD A . HAFFENDEN
Individually, and as President of
The Century Corporation
840 Park Avenue
New Haven, Indiana, 46774
Date
Clifford Belvin:
By: CLIFFORD BELVIN, pro se
Individually, and as Secretary of
The Century Corporation
1547 Tartan Lane
New Haven, IN 46774
Date |