The FTC has been denied NetForce contempt sanctions in opposition to Jay Noland.

The request for sanctions stems from Noland allegedly violating his NetForce injunction judgment.

Again in mid 2020 the FTC was denied contempt sanctions, pending decision of the FTC’s Success by Well being pyramid scheme case.

The FTC renewed its movement for contempt sanctions in June 2021.

Defendant James D. Noland, Jr., together with co-contemnors Scott Harris, Thomas Sacca, Success By Media LLC, and Success By Media Holdings Inc. violated a number of phrases of this Court docket’s 2002 Stipulated Remaining Judgment and Everlasting Injunction.

Till the Court docket imposed preliminary aid in January 2020, they ran two pyramid schemes—Success By Well being (“SBH”) and VOZ Journey—utilizing false earnings claims to bilk 1000’s of shoppers out of $7 million.

The FTC, due to this fact, requests the Court docket discover them in contempt and award civil compensatory sanctions.

Regardless of acknowledging “the FTC has established that the Contempt Defendants violated some provisions of the (NetForce) everlasting injunction”, on March twenty second the FTC’s renewed sanction movement was denied.

The Court docket concludes that the FTC has not clearly and convincingly established, at this stage of the proceedings, that the Contempt Defendants violated Sections I, II, and III of the everlasting injunction by means of their operation of SBH.

The FTC might want to search to determine these violations at an evidentiary listening to.

As a result of the FTC has not established the entire violations alleged in its movement, it follows that the FTC has not established an entitlement to the $7,012,913.25 compensatory contempt award sought in its movement.

Following the March twenty second denial, the FTC filed a movement for consideration on March twenty fourth.

In its reconsideration movement, the FTC argues that the Court docket ought to have deemed its proof ample to determine the SBH-related violations of Part I of the everlasting injunction as a result of, no matter whether or not SBH qualifies as a “pyramid scheme” beneath Ninth Circuit legislation (which was the difficulty addressed within the abstract judgment order within the Second Motion), SBH essentially qualifies as a “prohibited advertising and marketing scheme” as that time period is outlined by the everlasting injunction.”

The courtroom conceded the FTC’s level however in a March thirtieth order denying the movement, wrote;

The Court docket will not be persuaded that the perfect and most effective answer is to revisit the difficulty now through one other written order issued upfront of an evidentiary listening to.

This case has been pending for over two years, discovery is closed, and a consolidated evidentiary listening to within the First and Second Actions might want to happen no matter how the reconsideration movement is resolved.

I final checked the Success by Well being case docket on March twenty third. As of but we don’t have any future courtroom dates.

One different attention-grabbing tidbit from the unique denial movement was the courtroom noting it would alter the FTC’s requested $7 million determine.

If NetForce contempt sanctions are ultimately granted, the courtroom has signalled it’s going to think about product distributed to associates as a part of the Success by Well being pyramid scheme.

The FTC acknowledges that its calculations don’t account for the inherent worth of the merchandise that buyers really acquired and consumed.

Factoring within the worth of merchandise distributed as a part of the Success by Well being pyramid scheme, would successfully scale back the requested $7 million award.

The Supreme Court docket’s AMG determination probably impacting enforcement of the NetForce injunction additionally comes up.

Listed below are unresolved questions concerning the FTC’s authority to pursue a compensatory civil sanction primarily based on new § 13(b) violations that additionally violate an injunction issued in a earlier § 13(b) enforcement motion (such because the everlasting (NetForce) injunction issued within the First Motion).

I’ll proceed to observe the NetForce case docket. I’m not anticipating any vital filings although pending decision of the Success by Well being case.