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Anti-scam activist wins

A lawsuit filed by a White City subscription service against an anti-scam activist was dismissed this week in federal court in Medford.

Orbital Publishing Group and Liberty Publishers Service had filed suit against Bridget Wells in U.S. District Court, seeking $1 million in damages from Wells and her organization, Periodical Watchguard, based from her home in Mint Hill, N.C.

The two businesses, along with 17 other companies based in White City, were the subject of a racketeering lawsuit filed last year by the Oregon Department of Justice in Marion County Civil Court. The companies admitted no wrongdoing but settled with the state in June 2015 for $3 million, plus $500,000 in restitution made available to Oregon victims.

The companies are prohibited from engaging in the magazine or newspaper or subscription business and prohibited from conspiring with others in the subscription business, according to the settlement.

In the federal complaint filed by Orbital and Liberty in March 2015, the companies claimed that Wells and Periodical Watchguard targeted the businesses by spreading "false and disparaging" information about business practices to members of the publishing industry, contacting attorneys general in numerous states, including Oregon, the businesses' banks and other government agencies, such as the U.S. Postal Service.

The companies claimed that their direct-mail solicitations clearly stated they are independent agents, and that their business practices were legitimate. They claimed they had to create new limited liability companies because of difficulty securing banking relationships caused by Wells' efforts, and that Wells defamed the businesses by naming them on Periodical Watchguard's website. Wells also testified against the company in Jackson County Circuit Court and before the Oregon Department of Justice, they said.

On Dec. 21, Magistrate Judge Mark D. Clarke ruled that Wells' communication with the Oregon Department of Justice about concerns over business practices was reasonable and protected. Clarke said testimony against the business is protected in the state of Oregon, and that Wells denied ever contacting Oregon banks or financial institutions about the businesses.

Orbital and Liberty had 14 days to file objections with the court. No documents were filed between the Dec. 21 report and the Jan. 11 judgment.

Wells, a former Hearst employee with experience in the publication circulation industry, founded Periodical Watchguard in 2006, an organization that maintains an advisory board and develops sales programs approved by the Audit Bureau of Circulations. The organization's website has a section about publication industry "scams" and consumer rights. The website still names Orbital Publishing Group and warns visitors and representatives from magazines to be wary of subscription renewal requests from White City.

Orbital and Liberty were among businesses based in White City that renewed newspaper and magazine subscriptions across the country at a markup of 40 to 100 percent over standard prices using misleading mail solicitations, the Oregon Attorney General's Office alleged. Prosecutors claimed the businesses received more than $20 million between 2010 and 2015. Attorney General Ellen Rosenblum called the practice a "sophisticated operation" that "made its millions by scamming" individuals who thought they were dealing directly with the magazine or newspaper publisher.  Other state attorneys general in New York, Minnesota, Missouri and Texas filed similar lawsuits.

The Attorney General's Office alleged in March that Medford businessman Jeffrey Hoyal used his consulting companies Hoyal and Associates, Henry Cricket and Maximillian to control the White City subscription sales businesses. Hoyal denied having control of any of the subscription businesses and told the Mail Tribune Wednesday he merely worked as a consultant for Orbital and Liberty.

 Reach reporter Nick Morgan at 541-776-4471 or nmorgan@mailtribune.com. Follow him on Twitter at @MTCrimeBeat.