IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

FEDERAL TRADE COMMISSION, )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 15-0084-WS-B

 )

PSC ADMINISTRATIVE, LLC, etc., )

et al., ) 

 )

Defendants. )

 ORDER

This matter is before the Court on the plaintiff’s motion for summary 

judgment. (Doc. 51). The parties have filed briefs and evidentiary materials in 

support of their respective positions, (Docs. 51, 62, 64), and the motion is ripe for 

resolution. After careful consideration, the Court concludes the motion is due to 

be denied. 

BACKGROUND

According to the amended complaint, (Doc. 55), the entity defendants 

(“Payday” and “Coastal”) operated as a common enterprise, pursuant to which 

they engaged in unfair or deceptive acts or practices affecting commerce, in 

violation of the Fair Trade Commission Act (“the Act”). The entity defendants 

were also sellers or telemarketers of debt relief services within the contemplation 

of the plaintiff’s Telemarketing Sales Rule (“the Rule”), in the course of which 

they violated various provisions of the Rule. The individual defendants (“Irby” 

and “Hughes”) formulated, directed, controlled and/or participated in the acts and 

practices of the common enterprise. Count One alleges violations of the Act, and 

Counts Two and Three allege violations of the Rule. The plaintiff seeks wideranging injunctive relief against all defendants and monetary relief against all 

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defendants, jointly and severally, totaling almost $24 million. The plaintiff hopes 

to accomplish all this on the instant motion.

DISCUSSION

Summary judgment should be granted only if “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). The party seeking summary judgment bears “the initial 

burden to show the district court, by reference to materials on file, that there are no 

genuine issues of material fact that should be decided at trial.” Clark v. Coats & 

Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its 

burden in either of two ways: (1) by “negating an element of the non-moving 

party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the 

party bearing the burden of proof at trial will not be able to meet that burden.” Id. 

“Even after Celotex it is never enough simply to state that the non-moving party 

cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305, 

1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992). 

“When the moving party has the burden of proof at trial, that party must 

show affirmatively the absence of a genuine issue of material fact: it must support 

its motion with credible evidence ... that would entitle it to a directed verdict if not 

controverted at trial. [citation omitted] In other words, the moving party must 

show that, on all the essential elements of its case on which it bears the burden of 

proof, no reasonable jury could find for the nonmoving party.” United States v. 

Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc) 

(emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 

(11th Cir. 1993). 

“If the party moving for summary judgment fails to discharge the initial 

burden, then the motion must be denied and the court need not consider what, if 

any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord 

Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608. 

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“If, however, the movant carries the initial summary judgment burden ..., 

the responsibility then devolves upon the non-movant to show the existence of a 

genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving 

party fails to make ‘a sufficient showing on an essential element of her case with 

respect to which she has the burden of proof,’ the moving party is entitled to 

summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett, 

477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a 

party fails to properly support an assertion of fact or fails to properly address 

another party’s assertion of fact as required by Rule 56(c), the court may ... 

consider the fact undisputed for purposes of the motion ....”).

In deciding a motion for summary judgment, “[t]he evidence, and all 

reasonable inferences, must be viewed in the light most favorable to the 

nonmovant ....” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243 

(11th Cir. 2003).

There is no burden on the Court to identify unreferenced evidence 

supporting a party’s position.1 Accordingly, the Court limits its review to the 

exhibits, and to the specific portions of the exhibits, to which the parties have 

expressly cited. Likewise, “[t]here is no burden upon the district court to distill 

every potential argument that could be made based upon the materials before it on 

summary judgment,” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 

(11th Cir. 1995), and the Court accordingly limits its review to those arguments the 

parties have expressly advanced.

 1 Fed. R. Civ. P. 56(c)(3) (“The court need consider only the cited materials, but it 

may consider other materials in the record.”); accord Adler v. Wal-Mart Stores, Inc., 144 

F.3d 664, 672 (10th Cir. 1998) (“The district court has discretion to go beyond the 

referenced portions of these [summary judgment] materials, but is not required to do 

so.”). “[A]ppellate judges are not like pigs, hunting for truffles buried in briefs,” and 

“[l]ikewise, district court judges are not required to ferret out delectable facts buried in a 

massive record ....” Chavez v. Secretary, Florida Department of Corrections, 647 F.3d 

1057, 1061 (11th Cir. 2011) (internal quotes omitted). 

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I. Counts One and Three.

According to the defendants, Payday “offer[ed] a payday loan validation 

program for customers with two or more high interest payday loans.” (Doc. 62 at 

8). According to the plaintiff, Payday misrepresented to potential customers that it 

would do much more than validate their payday loans.2 Count One alleges that the 

defendants, on “numerous instances,” made “false and misleading” 

representations, “directly or indirectly, expressly or by implication,” that 

“constitute a deceptive act or practice in violation of Section 5(a)” of the Act, 15 

U.S.C. § 45(a). Count Three alleges that the same conduct violates the Rule, 16

C.F.R. § 310.3(a)(2)(x). (Doc. 55 at 11-12, 15-16).

As the plaintiff acknowledges, (Doc. 55-1 at 30), “[t]o establish liability 

under section 5 of the [Act], the FTC must establish that (1) there was a 

representation; (2) the representation was likely to mislead customers acting 

reasonably under the circumstances[;] and (3) the representation was material.” 

Federal Trade Commission v. Tashman, 318 F.3d 1273, 1277 (11th Cir. 2003). To 

obtain summary judgment, then, the plaintiff first must show what objectionable 

representations the defendants made, and it must do so with evidence sufficiently 

strong and uncontroverted that no reasonable factfinder could fail to find that the 

representations were made. 

The representations alleged by the plaintiff, “for consumers who retain their 

services,” are as follows:

1. “Defendants generally will pay off or otherwise eliminate consumers’ 

payday loans.”

 2 The plaintiff’s theory is that the defendants “made at least six false or 

unsubstantiated representations to persuade consumers to enroll in their program.” (Doc. 

51-1 at 30). Although it appears that only Payday had contact with consumers before 

they enrolled, the Court will follow the plaintiff’s practice of referring to all four 

defendants collectively, since the plaintiff seeks to impose liability on all of them for the 

same conduct.

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2. “Defendants generally will pay off or otherwise eliminate all of the 

consumers’ payday loans in a short time period, such as four to six months.”

3. “Defendants generally will successfully negotiate interest-free payments 

on consumers’ payday loans during the time-period of consumers’ enrollment in 

Defendants’ program.” 

4. “[C]onsumers’ creditors generally will cancel their payday loans as a 

result of receiving a form letter requesting ‘validation’ of the payday loans from 

Defendants.”

5. “[C]onsumers’ payments to Defendants will be applied to pay off their 

payday loans.”

6. “Defendants’ fee is only a small portion of consumers’ program 

payments to Defendants.”

(Doc. 55 at 11-12, 15; accord Doc. 51-1 at 30-31). According to the plaintiff, its 

proof that these representations were made consists of “[c]onsumer complaints, 

declarations, scripts, a call recording, and the testimony of the Individual 

Defendants and two former employees,” which “all show that Defendants’ 

business model was permeated with unlawful practices.” (Id. at 5). 

A. Consumer Complaints.

The “consumer complaints” addressed by the plaintiff in its principal brief 

are 256 complaints to the Better Business Bureau (“BBB”). (Doc. 55-1 at 10). 

The plaintiff has cited evidence that these complaints were registered and that “[a] 

lot of them” said the consumer had been told “they’d get X over the phone and 

then they got Y.” (Doc. 51-20 at 22-23). Several circumstances, however, soften 

the value of this evidence. First, the defendants have presented evidence that 

“[m]any” of these complaints “concerned long holds [sic] times for customer 

service,” something irrelevant to the plaintiff’s allegations. (Doc. 62-2 at 6). 

Second, the defendants – and the plaintiff itself – have presented evidence that 

many of the customers’ complaints were prompted, not by any genuine belief the 

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defendants had made the representations, but as a result of pressure from their 

payday lenders, who encouraged the defendants’ customers to file such complaints 

in order to goad the defendants into giving the customers a refund – which monies 

could then be paid to the payday lenders. (Doc. 51-20 at 23; Doc. 62-2 at 6; Doc. 

62-3 at 7).3 Third, the plaintiff has presented evidence that poor practices of the 

BBB artificially inflated the number of complaints. (Doc. 51-19 at 16-18). 

Fourth, the plaintiff has not attempted to show that the “X” versus “Y” disparity in 

the BBB complaints always, often, or even occasionally corresponds to one of the 

six precise representations on which its case depends, and without evidence of 

such a correlation its evidence is next to useless.4 Simply asserting, as the plaintiff 

does, that the defendants “do not contest” the “credibility” of “hundreds of other 

complaining consumers,” (Doc. 64 at 7), is not only incorrect but also beside the 

point, given the plaintiff’s failure to make a case that the consumers’ complaints 

fall within any of the six categories to which the plaintiff has limited its case. 

In its reply brief, the plaintiff – out of the blue and without attribution –

refers to “over five hundred complaints to the FTC and the Better Business 

Bureau.” (Doc. 64 at 2). After much searching, the Court has stumbled upon a 

filed but uncited declaration from an FTC investigator, who says she reviewed 

“approximately 500 consumer complaints against [Payday] submitted to the FTC’s 

Consumer Sentinel database,” including those forwarded from the BBB

(presumably, the same 256 discussed above). (Doc. 51-3 at 6). Pursuant to Rule 

56(c)(3), and because the Court does not condone the injection of new material in 

 3 In its reply brief, the plaintiff objects that the witnesses have failed to establish 

they have personal knowledge of whether consumers were prompted by their payday 

lenders to complain. (Doc. 64 at 7 n.8). Having introduced this evidence and invited the 

Court to consider it, (Doc. 55-1 at 10), the plaintiff cannot now object to its own 

evidence. 

4 A representation, for example, that the monthly payment would be “X” when it 

turned out to be “Y” would fall within the plaintiff’s evidence regarding the BBB 

complaints but would fall outside the parameters of its amended complaint.

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a reply brief,5 the Court declines to consider this declaration. Even were the Court 

to consider the declaration, however, it would not appreciably advance the 

plaintiff’s case. First, the Court is skeptical that the experience of 500 different 

individuals can be accurately, much less thoroughly, presented as an evidentiary 

matter in the eleven scant lines the declarant devotes to the issue. Second, the 

declarant focuses on what consumers “believed,” not on what they were told, and 

beliefs can be drawn from all manner of sources (including wishful thinking) 

inconsistent with the information actually being communicated.6

B. Declarations.

Payday did not make cold calls; instead, its program “was sold via inbound 

calls from customers responding to radio, internet and other advertising.” (Doc. 

55 at 13). The plaintiff’s case focuses on representations made during what it 

terms the defendants’ “misleading telephone pitch.” (Doc. 51-1 at 15). The 

defendants have presented evidence that they received over 2.5 million inbound 

calls from almost 300,000 different persons, with 58,175 of them ultimately 

 5 “[N]othing in the extant authorities, or in the Federal Rules of Civil Procedure, 

forbids a movant from making supplemental record submissions in a reply brief to rebut 

specific arguments raised by the non-movant’s opposition brief.” Hammons v. Computer 

Programs and Systems, Inc., 2006 WL 3627117 at *14 (S.D. Ala. 2006). Absent such a 

situation, however, “[i]t is well accepted that ... submission of new facts in [a] reply brief

is improper.” Sideraulic System SpA v. Briese Schiffahrts GmbH & Co., 2011 WL 

3204521 at *2 n.4 (S.D. Ala. 2011) (internal quotes omitted). The plaintiff’s belated 

reliance on the FTC investigator’s declaration does not fall within the Hammons

exception but within the Sideraulic general rule. 

6 The plaintiff mentions, but does not focus on, a complaint from the Attorney 

General’s office and a letter from a consumer’s attorney. (Doc. 51-1 at 10). With regard 

to the former, the plaintiff has not submitted the deposition excerpt on which it relies. 

With regard to both, the record is silent as to what the communications stated, such that 

they add nothing to the plaintiff’s body of complaints. 

 

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contracting with Payday. (Doc. 62-1 at 12-13). The plaintiff relies on declarations 

from ten of them. Ten.7

The plaintiff shrugs that “[c]ourts have expressly rejected challenges to the 

number of declarations relative to the potential pool of victims ...,” (Doc. 64 at 8), 

but the cases on which it relies were addressing the adequacy of proof that the 

defendant’s misrepresentations were likely to mislead a reasonable consumer.8 

The very different question posed here, however, is the adequacy of the plaintiff’s 

proof that the defendants made the alleged representations to begin with and that 

they did so with the frequency the plaintiff itself assumes is required to justify the 

relief it seeks.9 In that context, the paucity of declarations is absolutely relevant, 

because the plaintiff is asking the Court not merely to extrapolate that the

experience of ten was the experience of thousands but to hold that no reasonable 

factfinder could fail to make that extrapolation.

 7 The plaintiff says there are nine, (Doc. 64 at 7), but the defendants, and the 

Court, count ten. (Docs. 51-4 to -7, 51-9 to -13, 51-30). 

8 In addition, one of the opinions was a post-trial ruling on the merits, where only 

a preponderance of the evidence was required, and a second was considering a motion for 

preliminary injunction, where only a reasonable likelihood of success on the merits was 

required. Here, in contrast, the plaintiff must show that the evidence is so strong that no 

reasonable factfinder could disagree with the plaintiff. 

9 The plaintiff insists that the defendants’ “business model was permeated with 

unlawful practices,” that their “entire business was premised on making 

misrepresentations,” and that their “systematic deception” is what warrants the injunctive 

and monetary relief it seeks to receive on the instant motion. (Doc. 51-1 at 15, 30, 45). 

The plaintiff acknowledges that the Court, in evaluating its request for injunctive relief, 

must consider the “isolated or recurrent nature of the infraction,” and it argues that 

injunctive relief is warranted precisely because “the misrepresentations were such an 

essential feature of Defendants’ sales tactics that they permeated every aspect of the 

business.” (Id. at 46-47). Similarly, the plaintiff justifies the monetary relief it demands 

– return of the business’s gross revenues (less refunds) – on the grounds that every dollar 

of revenues (and thus every payment by consumers) represents “unjust enrichment” 

(obtained only by misrepresentation). (Id. at 49). Finally, the plaintiff relies on a 

presumption of actual reliance by consumers, which it admits requires proof that that the 

defendants’ representations were “widely disseminated.” (Id.). 

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At any rate, the evidence the plaintiff extracts from these declarations is 

underwhelming. The plaintiff first invites the Court to peruse the declarations 

(totaling almost 40 pages) in globo and find for itself information that might 

support the plaintiff’s case. (Doc. 51-1 at 16, ¶ 45). That invitation, extended in 

disregard of Rule 56(c)(3) and Civil Local Rule 56(a), is declined. The Court 

instead addresses only the specific portions of specific declarations that the 

plaintiff specifically cites as reflecting a misrepresentation by the defendants 

during the telephone solicitation calls.

1. That the defendants generally would pay off or otherwise eliminate 

consumers’ payday loans. The plaintiff identifies only two declarations asserting 

that such a representation was made. (Doc. 51-1 at 16, ¶ 45; id. at 17, ¶ 47).10 

2. That the defendants generally would pay off or otherwise eliminate 

consumers’ payday loans in a short period, such as four to six months. The 

plaintiff identifies several declarations that assert the declarant was given a 

program length of between four and six months, (Doc. 51-1 at 19, ¶ 50), but these 

declarants do not say they were told their loans would be paid off or otherwise 

eliminated within that time.

3. That the defendants generally would successfully negotiate interest-free

payments on consumers’ payday loans during the consumers’ enrollment in the 

defendants’ program. The plaintiff cites a single declaration to support this 

proposition, and it does not do so. (Doc. 51-1 at 17-18, ¶ 48).11

4. That consumers’ creditors generally would cancel their payday

 10 (Doc. 51-7 at 2 (sales rep “said that at the end of the process, Payday ... would 

pay off my loans in their entirety”); Doc. 51-12 at 1 (“PSC stated that they would validate 

my loans, cancel any loans that were illegal, and then pay back my legitimate loans.”)). 

11 (Doc. 51-6 at 1-2 (sales rep explained that Payday would “then proceed by 

working with my lenders to reduce my monthly payments and lower my interest rates.”)).

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loans as a result of receiving a form letter requesting ‘validation’ of the payday 

loans from the defendants. The plaintiff cites four declarations as supporting this 

allegation, (Doc. 51-1 at 17, ¶ 47), but none actually does so.

5. That consumers’ payments to the defendants would be applied to pay off 

their payday loans. The plaintiff cites seven declarations to show that the 

defendants made this representation, (Doc. 51-1 at 18, ¶ 49), but only one of them 

contains such an assertion.12 The other six declarants state only that they 

“believed,” “thought” or “understood” this would happen.

6. That the defendants’ fee was only a small portion of the consumers’ 

program payments to the defendants. The plaintiff cites only one declaration in 

support of this allegation. (Doc. 51-1 at 19, ¶ 52).13 

The plaintiff, in sum, has evidence from its declarants that the first 

representation was made twice and that the fifth and sixth representations were 

made once each. Of this grand total of four representations, three were made by 

the same sales rep to the same declarant on the same telephone call. 

The plaintiff has attempted to artificially heighten the probative value of the 

declarations in at least three ways. First, and most common, it has relied on 

declarants’ statements as to what they thought, understood or believed about the 

program rather than on their (non-existent) statements as to what the defendants’ 

representatives actually said. While it may sometimes be permissible for a 

factfinder to infer that the understanding of a customer about a defendant’s 

program arose from the defendant’s representation regarding the program, there is 

no rule of law or evidence that compels a factfinder to draw such an inference. 

 12 (Doc. 51-7 at 1 (sales rep “explained ... that this money would be used to pay 

down my debts” and “told me that my payments to Payday ... would go to my lenders”)).

13 (Doc. 51-7 at 1 (sales rep explained that the declarant’s $115 biweekly payment 

“would be used to pay down my debts” and that Payday “would take at most $38 from 

my account for administrative costs, and only after my loans were completely paid off”)). 

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Here, where the plaintiff must show that no reasonable factfinder could fail to find 

for the plaintiff, that distinction is crucial.

Second, the plaintiff has at times emphasized alleged misrepresentations 

made after the declarant entered a contract with Payday. The basis of the 

plaintiff’s lawsuit and motion, however, is that the defendants made 

misrepresentations “to persuade consumers to enroll in their program,” (Doc. 51-1 

at 30), and the plaintiff has failed to show that liability can be based on later 

misrepresentations.14 While the making of later misrepresentations might support 

an inference that similar misrepresentations were made pre-enrollment, it remains 

the case that the plaintiff cannot prevail on its motion for summary judgment on 

the strength of merely permissible inferences.

Third, the plaintiff has occasionally suggested that the defendants made 

pre-enrollment misrepresentations other than the six made the basis of its lawsuit. 

Again, even if a permissible inference might be drawn that a defendant making 

certain, uncharged misrepresentations also made other, charged 

misrepresentations, permissible inferences cannot sustain the plaintiff’s burden on 

motion for summary judgment. 

C. Scripts.

The plaintiff relies on several pages of “scripts” to show that the defendants 

routinely made certain representations. The first document is styled, “Keep It 

Simple.” (Doc. 51-15 at 48). It reads in its entirety as follows:

This is a FINANCIAL HARDSHIP PROGRAM, made up of THREE

steps.

1) We ASSIST you in securing your account away from the lenders

2) We make sure the lenders are licensed to do business in your state 

and are not over charging you in fees and interest

3) If necessary, we get the loans settled and paid off

 14 On the contrary, the amended complaint pegs all six representations on which 

suit is brought to the defendants’ “telemarketing pitch.” (Doc. 55 at 7-8).

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If you are giving the client any other explanation of the program, you are

not explaining it correctly. Don’t over complicate your sale.

This is how you should explain the program every time!

(Id. (emphasis in original)).

The second document is styled, “Payday Sales Script.” (Doc. 51-15 at 49). 

After some preliminary questions, the script continues as follows:

Okay, just a little information about our program, we offer a financial 

hardship program that has three steps

The first step is we will help you secure your account away from the

lenders

The second step is We will make sure the lenders are licensed to do

business in your state.

Then we will get your debt settled and paid off.

(Id.).

The third document is styled, “Common questions and how to answer 

them.” (Doc. 51-18 at 54). In response to the question, “What are your fees?” is 

the following:

Each lender is assigned a fee based off what it will take to Validate 

that lender, so that fee’s could vary. But all of the fees are included 

in your program payments so no additional fees will be charged. 

You will only have the 1 payment coming out each pay-period for 

the total of X(term) months. The payments made into the program 

goes toward making sure these lenders are licensed and or [sic]

charging the legal amounts of interest in your state. And then getting 

the lenders settled and paid off. So basically as long as you complete 

the program your debt will be completely validated, settled and paid 

off if necessary.

NOT ACCEPTABLE! (WE ONLY CHARGE 38.47 MONTHLY 

FEES)

(Id. (emphasis in original)).

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The fourth document, bearing the heading of “Breaking the Pay Day Loan 

Cycle,” describes itself as “our easy, step-by-step ‘Breaking The Cycle’ guide.” 

(Doc. 51-15 at 47). It contains four numbered paragraphs styled, in order, “Enroll 

With Payday Support Center,” “Secure Your Account,” “Validate Your Loan,” 

and “Settle The Loans.” The latter paragraph states in pertinent part as follows:

In the event, that some of your loans are determined to be valid, 

we have partnered with a settlement provider that can potentially 

settle your remaining balance for significantly less than you may 

owe now! Working with our premier settlement partner, Infinity 

PDS, upon your request, we will forward your entire account and 

associated documents directly into their computer system. They will 

immediately begin to process your account and determine the cheapest 

and quickest way to finalize your situation!

(Id.).

The fifth document, which appears to be a continuation of the third, is 

likewise styled, “Payday Sales Script.” (Doc. 51-15 at 50). In the portion cited by 

the plaintiff, it reads as follows:

So it looks like you have about $1,560 in total debt between all 4 loans, 

that sound correct?

Okay, Ms/Mr _____, what we can do is set you up for an ___ month

program. Your payments will be ____ every two weeks for ___ months.

Over the ___ month program, you will no longer be making payments to

your lenders, just the payments of ____ every pay period. How does that

sound?

(Id.).15

The plaintiff construes this fifth document as an “offe[r] to substantially 

reduce consumers’ monthly payments from what consumers owed their payday 

 15 The plaintiff purports to rely on a sixth document, but it either has not been 

submitted or the plaintiff has not cited it correctly. (Doc. 51-1 at 16 (citing to “PX12 ... 

Ex. 10 p. 110 (script)”)). It thus cannot be considered by the Court. However, from the 

plaintiff’s description it appears to add nothing to what is contained in the first three 

documents.

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lenders at the time of enrollment.” (Doc. 51-1 at 15). The plaintiff explains that 

the document “quotes lower payments.” (Id. at 16). Given the failure of the 

document to identify either what the consumer’s existing payments are or what the 

proposed new payments are, that is something of a stretch but, in any event, lower 

periodic payments is not one of the representations on which the plaintiff’s 

amended complaint is based.

The other four documents (which the Court terms for ease of reference

“Simple,” “Script,” “Questions” and “Cycle,” respectively), require more extended 

discussion. Simple and Script both describe a single program with three steps, the 

third being that “we get the loans settled and paid off” or that “we will get your 

debt settled and paid off.” If such statements were regularly made to potential 

customers as part of the defendants’ sales pitch, it would presumably establish the 

first representation on which the plaintiff’s lawsuit is based: that the defendants 

generally would pay off or otherwise eliminate consumers’ payday loans.

The plaintiff finds it obvious that this description was routinely presented in 

the telemarketing pitch. After all, Simple expressly states that “[t]his is how you 

should explain the program every time,” and Script on its face purports to be a 

“script.” The defendants, however, have presented evidence that these documents 

were not truly scripts to be read to potential customers over the telephone but a 

shorthand overview for the benefit of the sales reps. (Doc. 62-4 at 6). The 

defendants have also presented testimony from Payday’s sales training manager 

(who personally trained over 100 sales reps) that sales reps were carefully trained 

never to state or suggest that consumers’ payday loans would be paid off or 

eliminated through the defendants’ program. (Id. at 5).16 Rather, sales reps were 

trained to maintain, in all customer communications, a clear separation between 

the validation service offered by Payday and the debt settlement service of the 

third party and to explain the debt-settlement concept as an option for customers to 

 16 The defendants have presented similar evidence as to each of the six 

representations alleged in the amended complaint. (Id. at 5-6).

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use the third-party provider if the validation service offered by the defendants did 

not resolve the loan. (Id. at 5-6). Sales reps were warned they would be subject to 

discipline, up to and including termination, for representing that the defendants’ 

program included debt settlement or debt relief services. (Id. at 3, 5, 11). The 

plaintiff in its reply brief ignores this evidence, but the Court cannot, and the 

defendants’ evidence renders controverted the plaintiff’s evidence that sales reps 

routinely told consumers that the defendants would pay off or otherwise eliminate 

the consumers’ payday loans.

The plaintiff pays scant attention to Questions and, as a practical matter, the 

defendants’ evidence discussed above makes it less than controlling. While it 

asserts that defendant Hughes admitted that sales reps were required to use this 

document, (Doc. 51-1 at 18), the plaintiff has not submitted the deposition pages 

on which it relies for this proposition. Moreover, Questions is inherently 

ambiguous, since it is far from clear whether the approved answer is the verbose 

one that includes the language on which the plaintiff seizes or the concise one 

found in the final, underlined, all-caps statement. 

That leaves Cycle. As the plaintiff notes, this document was sent to 

customers only after they enrolled in the program, (Doc. 51-1 at 20; Doc. 64 at 3), 

so it comes too late to support the plaintiff’s amended complaint (which alleges 

representations only in the pre-contract, sales-pitch period). While the plaintiff 

suggests that defendant Irby has admitted the defendants required sales reps to use 

this document, (Doc. 51-1 at 17), the deposition pages on which it relies do not 

support that proposition. But it is unclear how Cycle would help the plaintiff in 

any event, since it contains no obvious representation that the defendants generally 

will pay off or otherwise eliminate consumers’ payday loans. On the contrary, it 

states only that a third party (not the defendants), upon a consumer’s request (not 

automatically), potentially might (not generally would) find a way to settle the 

consumer’s payday loans for less than their face amount (not that the third party 

would itself pay off or eliminate the debt).

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D. Defendants’ Testimony.

As for the “testimony of the Individual Defendants and two former 

employees,” (Doc. 51-1 at 5), the Court’s discussion of the (missing and 

inapposite) testimony of Hughes and Irby regarding Questions and Cycle 

essentially exhausts the plaintiff’s testimonial evidence regarding the making and 

content of any representations. It clearly does not advance the plaintiff’s case.17

E. Recorded Call.

Finally, the plaintiff relies on a recording of a March 2014 call one of its 

investigators made to Payday, which call was handled by a sales rep named 

Shaquasia. (Doc. 51-3 at 18-32). The transcript includes the following statements 

by Shaquasia, all highlighted by the plaintiff:

• “If all of the loans qualify, we will combine all of those loans 

together and we will provide you with an interest-free payment 

to repay your payday loan debt. So, essentially, you’ll be 

repaying any of the debt that you owe back on these loans free of 

interest and fees. ... We get all of the interest and fees 

eliminated for you ....” (Id. at 23-24).

• “Upon (inaudible) enrolling into the program, ... we get the 

loans settled and paid off for you.” (Id. at 24).

• “The funds that you provide by going through the program will 

go towards settling and paying off your loan.” (Id.).

 17 In the introduction to its principal brief, the plaintiff states that the “Defendants 

have conceded that their telemarketers routinely told consumers that their debts would be 

paid off as a result of Defendants’ program ....” (Doc. 51-1 at 5). The plaintiff does not 

identify where in the record any such concession lies, and the Court is unaware of any. 

Since the testimony of Hughes and Irby regarding Questions and Cycle is all the plaintiff 

offers from the defendants regarding the making of such a representation, it is safe to say 

there has been no such concession. 

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• “[T]here is a program fee that is included in your payment. 

Normally, with clients with three payday loans, they’re paying 

about $98 biweekly on – on all three of the loans, and my 

company’s fee is included in that $98 payment.” (Id.). 

• After securing bank accounts and validation, “the final thing that 

we do is we get the loan settled and paid off so that by the end of 

your program – at the end of your program, you would be 

completely done with all – with three of these payday loans.” 

(Id. at 28). 

The quoted excerpts appear to contain at least the first, third and fifth 

representations on which suit is based. But one call out of 2.5 million cannot of 

itself eliminate any fact issue as to whether it reflects the defendants’ “business 

model,” (Doc. 51-1 at 15), especially in the face of the defendants’ evidence that 

sales reps were trained to avoid such statements and were threatened with 

termination for non-compliance.

In its reply brief, the plaintiff argues that post-contract communications 

from the defendants continued the misrepresentation that they would settle their 

clients’ debts. (Doc. 64 at 2-5). This argument, based on documents on which the 

plaintiff did not previously rely, appears to be raised too late to be considered but, 

in any event, the most it could do for the plaintiff is support a permissible 

inference that, if the defendants made such representations after the contract was 

entered, they also did so beforehand. Again, the plaintiff cannot prevail on 

summary judgment by relying on permissible inferences.

F. Summary.

At best, then, all that is uncontroverted is that the defendants made the first

alleged representation to two customers and also made the fifth and sixth

representation one time each, to one of the same two customers. While it is also 

uncontroverted that Shaquasia once made the first, third and fifth representations, 

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she was speaking with an FTC investigator, not a customer, so there appears to be 

no consumer injury. The plaintiff does not seek a partial summary judgment as to 

these isolated acts, and it does not argue that it is entitled on the basis of them to 

the sweeping injunctive and monetary relief it seeks. The plaintiff’s motion for 

summary judgment as to Counts One and Three is thus due to be denied. 

II. Count Two.

“It is an abusive telemarketing act or practice and a violation of this Rule 

for any seller or telemarketer to ... [r]eques[t] or receiv[e] payment of any fee or 

consideration for any debt relief service until and unless ... [t]he seller or 

telemarketer has renegotiated, settled, reduced, or otherwise altered the terms of at 

least one debt pursuant to a ... valid contractual agreement executed by the 

customer [and] [t]he customer has made at least one payment pursuant to that ... 

agreement ....” 16 C.F.R. § 310.4(a)(5)(i). Count Two alleges a violation of this 

provision of the Rule. (Doc. 55 at 14-15). The threshold question is whether the 

defendants requested or received payment for a “debt relief service” within the 

Rule.18 

Debt relief service means any program or service represented,

directly or by implication, to renegotiate, settle, or in any way alter 

the terms of payment or other terms of the debt between a person and 

one or more unsecured creditors or debt collectors, including, but not 

limited to, a reduction in the balance, interest rate, or fees owed by a 

person to an unsecured creditor or debt collector. 

16 C.F.R. § 310.2(o). 

The plaintiff, devoting a single paragraph to the issue, simply announces 

that the defendants’ business meets the regulatory definition “because Defendants’ 

telemarketers represented that Defendants would renegotiate terms of the debt –

specifically, the repayment obligations, interest rates, and time-period of 

 18 The “debt relief service” question is also presented as to Count Three. (Doc. 55 

at 12-13, 15).

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repayment – between customers and lenders.” (Doc. 55-1 at 38-39). As reflected 

in Part I, however, it is not uncontroverted that the sales reps did so.

 In its reply brief, the plaintiff tries a new tack. Even the debt validation 

portion of the Defendants’ business, it says, constitutes “debt relief services” 

because Cycle says that, “[a]fter your account is secured and your loans validated, 

you may notice that you may very well owe significantly less than you believe you 

owe now!” (Doc. 51-15 at 47). According to the plaintiff, “[t]his demonstrates 

that Defendants marketed the validation portion of [the] program as a means to 

renegotiate, settle, or reduce the balance of consumers’ debts, placing it squarely 

within the definition of ‘debt relief’ under the [Rule].” (Doc. 64 at 12). 

The plaintiff mentioned Cycle in its principal brief, but it neither cited the 

portion of the document on which it now relies nor invoked it in support of its 

analysis of the “debt relief service” requirement. (Doc. 55-1 at 15-16, 38-39). 

Nor did the plaintiff assert or suggest that validating debts constitutes debt relief 

services under the Rule. “District courts, including this one, ordinarily do not 

consider arguments raised for the first time on reply.” Gross-Jones v. Mercy 

Medical, 874 F. Supp. 2d 1319, 1330 n.8 (S.D. Ala. 2012) (citing cases and 

explaining rationale). The plaintiff does not explain why it should be exempt from 

this rule.

The argument suffers from other problems as well. The plaintiff says the 

focus of the “debt relief service” inquiry is on how the “telemarketers” “marketed” 

the program to potential customers. (Doc. 55-1 at 38; Doc. 64 at 12). As noted in 

Part I.C, however, the only evidence is that Cycle was not used by the sales reps 

but was only sent to customers after they had enrolled. 

There is also the matter of the disclaimers contained in the contracts:

Please note that, pursuant to this Contract, Company will not 

renegotiate, settle, or in any way change the terms of any of 

your debts.

(Doc. 51-4 at 10 (boldface in original)).

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CLIENT UNDERSTANDS THAT COMPANY WILL NOT

RENEGOTIATE, SETTLE, OR IN ANY WAY CHANGE THE 

TERMS OF ANY DEBT. 

(Id. at 11 (all caps in original)).

 The plaintiff argues at length that these disclaimers are as a matter of law 

incapable of showing that the defendants’ alleged representations were unlikely to 

mislead customers acting reasonably under the circumstances, for purposes of the 

second element of its claims under Counts One and Three.19 But the plaintiff has 

not similarly argued that the disclaimers are irrelevant to the different question of 

whether the defendants’ program was “represented” as one “to renegotiate, settle, 

or in any way alter the terms of payment or other terms” of consumers’ payday 

loans, as is necessary to trigger coverage under the Rule. The Court has no fixed 

opinion on the question but notes it simply to underscore the inadequacy of the 

plaintiff’s treatment of the threshold, “debt relief service” issue.

CONCLUSION

For the reasons set forth above, the plaintiff’s motion for summary 

judgment is denied.

20

DONE and ORDERED this 17th day of June, 2016.

s/ WILLIAM H. STEELE

CHIEF UNITED STATES DISTRICT JUDGE 

 19 Because the plaintiff’s motion for summary judgment as to these counts is due 

to be denied on other grounds, the Court does not reach that issue.

20 In its reply brief, the plaintiff invites the Court to at least grant it summary 

judgment “on the matter of common enterprise.” (Doc. 64 at 14). While the Court has 

discretion to grant such partial relief when the summary judgment standard is met, Fed. 

R. Civ. P. 56(g), it may properly decline to exercise that discretion if it decides the effort 

is not worth the candle or that “it is better to leave open for trial facts and issues that may 

be better illuminated by the trial of related facts that must be tried in any event.” Fed. R. 

Civ. P. 56 advisory committee notes 2010 amendment. The Court draws that conclusion 

and thus declines to consider the plaintiff’s proposal. 

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