Court Opinion

ID: 3212979
Source: CourtListenerOpinion
Date Created: 2016-06-14 21:01:41.882756+00
Date Added: 2024-06-11T07:39:29.189877
License: Public Domain

Case: 15-11500   Date Filed: 06/14/2016   Page: 1 of 5

                                                        [DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT
                     ________________________

                           No. 15-11500
                     ________________________

               D.C. Docket No. 6:12-cv-01618-ACC-KRS

FEDERAL TRADE COMMISSION,
                                                            Plaintiff-Appellee,

                                 versus

HES MERCHANT SERVICES COMPANY, INC.
a Florida corporation,
HAL E. Smith,
individually and as an officer of HES
Merchant Services Company, Inc.,
a.k.a. H.E. Smith,
a.k.a Harold E. Smith,
a.k.a. Howell E. Smith,

                                                      Defendants-Appellants.
                     ________________________

                           No. 15-13380
                     ________________________

               D.C. Docket No. 6:12-cv-01618-ACC-KRS

FEDERAL TRADE COMMISSION,
                                                            Plaintiff-Appellee,

                                 versus
                 Case: 15-11500        Date Filed: 06/14/2016    Page: 2 of 5

UNIVERSAL PROCESSING SERVICES OF WISCONSIN, LLC,
a New York limited liability company,
d.b.a. Newtek Merchant Solutions,

                                                                      Defendant-Appellant.

                                   ________________________

                      Appeals from the United States District Court
                           for the Middle District of Florida
                             ________________________

                                        (June 14, 2016)

Before HULL and ANDERSON, Circuit Judges, and MORENO,* District Judge.

PER CURIAM:

       We have had the benefit of extended oral argument in this case, and have

carefully reviewed the briefs, the district court orders, and relevant parts of the

record. With respect to the appeal of Smith and his wholly-owned corporation,

HES Merchant Services Co, Inc., we conclude that there is no reversible error with

respect to the district court’s grant of summary judgment in favor of the FTC or

with respect to the district court’s injunction. We agree with the district court that

Smith failed to create genuine issues of material fact to avoid summary judgment.

We cannot conclude that the district court erred in disregarding Smith’s affidavit;

__________
*Honorable Federico A. Moreno, United States District Judge for the Southern District of
Florida, sitting by designation.

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               Case: 15-11500       Date Filed: 06/14/2016   Page: 3 of 5

its assertions were either properly disregarded as conclusory or as inconsistent with

Smith’s deposition and therefore properly considered a sham. With respect to the

injunction, we cannot agree with Smith that the district court ignored his age and

health. There was ample evidence to support the district court’s finding that

Smith’s “participation in this and other telemarketing schemes was obvious and

substantial, and with a high degree of scienter; he does not appear to recognize the

wrongful nature of his conduct, as he apparently intends to resume similar business

activities; and there is no reason to believe that he will abstain from future

violations merely because of his age or health.” We cannot conclude that the

district court abused its discretion in this regard.

      And with respect to Smith and HES, the district court’s imposition of joint

and several liability for equitable money relief in the amount of $1,734,972 was

entirely appropriate. The district court found that the TYS defendants (including

Smith and his HES corporation) committed the various violations operating

together as a common enterprise. D.C. Docket 208 at 9-10. The district court also

found that Smith, acting for himself and HES, 1 “had an ample degree of control

over the entire operation and knowledge of its deceptive practices.” Id. at 11.

1
      Smith concedes that HES is his alter ego.

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Smith has failed to point to evidence creating a genuine issue of fact in this regard.

Smith’s other challenges to the district court’s order awarding equitable monetary

relief are wholly without merit.

      However, we conclude that the district court’s order awarding equitable

monetary relief against UPS must be vacated. Although the district court did not

specifically name UPS as part of the common enterprise, the district court did refer

to the “corporate defendants.” On the other hand, the district court appeared to not

include UPS in the common enterprise. If UPS was not included in the common

enterprise, then the district court provided no explanation as to why joint and

several liability in the amount of $1,734,972 was appropriate, and made no

findings which made such an award obviously appropriate. Accordingly, we

vacate the judgment of the district court with respect to UPS only and only insofar

as it imposed upon UPS joint and several liability for equitable monetary relief in

the amount of $1,734,972, and we remand this case for findings of fact and

conclusions of law as to whether and why UPS is jointly and severally liable for

restitution and in what amount.

      For the foregoing reasons, and for the reasons set out in the district court’s

several orders, the judgment of the district court is affirmed in all respects, except

that it is vacated insofar as it awarded joint and several liability for equitable

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              Case: 15-11500    Date Filed: 06/14/2016   Page: 5 of 5

monetary relief in the amount of $1,734,972 against UPS and remanded for further

proceedings consistent with this opinion.

      AFFIRMED IN PART, VACATED IN PART, and REMANDED.

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