FTC denied Netforce Seminars contempt sanctions

The FTC has been denied NetForce contempt sanctions against Jay Noland.

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

Back in mid 2020 the FTC was
denied contempt sanctions
, pending resolution of the
FTC’s Success by Health pyramid scheme case
.

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

Defendant James D. Noland, Jr., along with co-contemnors Scott Harris, Thomas Sacca, Success By Media LLC, and Success By Media Holdings Inc. violated multiple terms of this Court’s 2002 Stipulated Final Judgment and Permanent Injunction.

Until the Court imposed preliminary relief in January 2020, they ran two pyramid schemes—Success By Health (“SBH”) and VOZ Travel—using false earnings claims to bilk thousands of consumers out of $7 million.

The FTC, therefore, requests the Court find them in contempt and award civil compensatory sanctions.

Despite acknowledging “the FTC has established that the Contempt Defendants violated some provisions of the (NetForce) permanent injunction”, on March 22nd the FTC’s renewed sanction motion was denied.

The Court 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 permanent injunction through their operation of SBH.

The FTC will need to seek to establish those violations at an evidentiary hearing.

Because the FTC has not established all of the violations alleged in its motion, it follows that the FTC has not established an entitlement to the $7,012,913.25 compensatory contempt award sought in its motion.

Following the March 22nd denial, the FTC filed a motion for consideration on March 24th.

In its reconsideration motion, the FTC argues that the Court should have deemed its evidence sufficient to establish the SBH-related violations of Section I of the permanent injunction because, regardless of whether SBH qualifies as a “pyramid scheme” under Ninth Circuit law (which was the issue addressed in the summary judgment order in the Second Action), SBH necessarily qualifies as a “prohibited marketing scheme” as that term is defined by the permanent injunction.”

The court conceded the FTC’s point but in a March 30th order denying the motion, wrote;

The Court is not persuaded that the best and most efficient solution is to revisit the issue now via another written order issued in advance of an evidentiary hearing.

This case has been pending for over two years, discovery is closed, and a consolidated evidentiary hearing in the First and Second Actions will need to take place regardless of how the reconsideration motion is resolved.

I last checked the Success by Health case docket on March 23rd. As of yet we don’t have any future court dates.

One other interesting tidbit from the original denial motion was the court noting it might adjust the FTC’s requested $7 million figure.

If NetForce contempt sanctions are eventually

🤖 Quick Answer

What contempt sanctions did the FTC seek against Jay Noland?

Who were the defendants involved in the pyramid schemes?
The defendants included James D. Noland Jr., Scott Harris, Thomas Sacca, Success By Media LLC, and Success By Media Holdings Inc. They operated two pyramid schemes: Success By Health and VOZ Travel, using false earnings claims to defraud thousands of consumers until preliminary relief was imposed in January 2020.

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