Hoyal seeks to delay subscription suit ruling
A Southern Oregon man who stood trial against the Federal Trade Commission for his alleged involvement in a group of businesses that deceptively sold marked-up newspaper subscriptions is now looking to another case in a higher court as reason to postpone a ruling potentially worth tens of million of dollars.
Jeffrey Hoyal, one of two accused ringleaders who spent weeks at trial in U.S. District Court in Medford for his role in a “common enterprise” selling overpriced subscriptions nationwide, is asking the court to delay a ruling in the fraud lawsuit indefinitely — until the Ninth Circuit Court of Appeals reviews an unrelated case surrounding payday loans.
The FTC wants the federal court to deny any further postponements in the subscription fraud case, court filings made Wednesday show. The federal agency took Hoyal, his since-estranged business partner Dennis Simpson and about 10 other co-defendants to trial for 19 days seeking to stop their involvement in the subscription business largely based in White City.
“The evidence at trial established that there is no guarantee, beyond defendants’ promises, that the conduct the court found to be deceptive will cease,” the FTC’s filing states, later adding, “Defendants’ deceptive subscription operation has continued in various forms since 1996, despite consumer complaints and law enforcement involvement.”
Last fall, U.S. District Judge Michael McShane ruled the mailers involved in the scheme — which resembled renewal notices direct from publishers of national papers such as the Wall Street Journal, The New York Times and the Cincinnati Enquirer — were deceptive.
The bench trial focused on the individuals’ roles between 2010 and 2015 in the “common enterprise,” a web of 90-plus companies tied to Hoyal and other defendants, such as Reality Kats, Adept Management and Hoyal & Associates.
Hoyal has previously insisted he only worked as a consultant, but the FTC has argued he managed day-to-day operations for the myriad companies.
The FTC estimates that more than 40,000 people were deceived between 2010 and 2015, with the marked-up subscriptions sold through the companies. The federal agency estimates actual damages in excess of $20 million.
Each business performed small parts of the scheme, such as printing mailers or submitting orders — sometimes sending them from out of the area to avoid a White City postmark — and creating a new business when publishers sent cease-and-desist letters, according to earlier news reports.
The FTC argued Wednesday that numerous settlements with state attorneys general have thus far only resulted in Hoyal and others creating new businesses performing similar roles.
“Any individual defendant could restart a similar subscription operation with a mere phone call,” the FTC wrote.
Hoyal is asking the court to postpone its ruling until the completion of a contested ruling in an unrelated FTC suit against AMG Capital Management over deceptive payday loans. In December, a panel of Ninth Circuit judges ruled in favor of restitution amounting to $1.27 billion.
Hoyal’s request to postpone states that wrapping up the AMG case will be a “short time,” but the FTC argues it’ll take years.
“Their proposal to check in with the court every six months, however, implies they must also believe it will take months or years,” the FTC argued.
As of Friday afternoon, the court had yet to render a decision in the case, or on Hoyal’s motion to delay.
A message to the FTC seeking information about the case’s status was not returned last week, but the FTC filing mentions that assuming the motion to postpone is denied, Hoyal’s post-trial filings, due March 14, are the last step before the ruling.