Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—9th Cir.: Contempt, sanctions order against telemarketer reversed and remanded for further findings, (Jun 15, 2015)

By Linda O’Brien, J.D., LL.M.

A district court’s order, finding telemarketer Glen Burke in contempt for violating a prior stipulated permanent injunction regarding his involvement in a direct-mail sweepstakes operation, was reversed and remanded for additional and more detailed findings of fact and conclusions of law, the U.S. Court of Appeals in San Francisco has decided in an unpublished opinion (FTC v. Burke, June 11, 2015, Per Curiam).

Based on his role in a film investment scheme, in 1998, a federal district court entered a stipulated order, permanently banning Glen Burke and his company, American Health Associates, from engaging in telemarketing and prohibiting him from making material misrepresentations about any product or service. In January and March 2013, respectively, the FTC moved to hold Burke in contempt for violating the injunction’s prohibition on telemarketing activities and for engaging in a direct mail sweepstakes scheme. In September 2013, the district court granted both motions to hold Burke in contempt—one based on the telemarketing operation and one based on the sweepstakes operation—and imposed monetary sanctions.

In the first order, the district court stated that its findings were based on the evidence presented in the various motions and arguments of counsel. In a second clarifying order, the district court provided findings of fact only regarding the telemarketing scheme and stated the FTC’s evidence was uncontroverted and warranted the monetary sanctions. Burke appealed the portion of the order holding him in contempt for his involvement in the sweepstakes scheme.

Federal Rule of Civil Procedure 52(a) requires district courts to find the facts specially and state its conclusions of law separately as to aid a reviewing court by affording it a clear understanding of the basis of the district court decision, the appellate court explained. In this case, the district court’s conclusory statements about the evidence in support of the contempt order and sanctions against Burke for his involvement in the sweepstakes scheme did not afford the appellate court “a clear understanding of the basis of decision.” Due to the bare record as to Burke’s responsibility for the sweepstakes operation, the case must be remanded so the district court could providing findings that would facilitate a reasoned review of tis order, the court concluded.

The case is No. 13-17448.

Attorneys: Reenah Kim for Federal Trade Commission. John V. Spilotro (Spilotro & Kulla, Chartered) for Glen Burke.

Companies: American Health Associates, LLC

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