Case 3:20-cv-06919-VC Document 85 Filed 06/24/21 Page 1 of 22
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`JAMES REILLY DOLAN
`Acting General Counsel
`
`N. DIANA CHANG, Cal. Bar No. 287624
`EMILY COPE BURTON, Cal. Bar No. 221127
`SARAH SCHROEDER, Cal. Bar No. 221528
`Federal Trade Commission
`901 Market Street, Suite 570
`San Francisco, CA 94103
`Email: nchang@ftc.gov, eburton@ftc.gov, sschroeder@ftc.gov
`Tel: (415) 848-5100; Fax: (415) 848-5184
`
`Attorneys for Plaintiff
`FEDERAL TRADE COMMISSION
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`
`Plaintiff,
`
`v.
`
`
`FEDERAL TRADE COMMISSION,
`
`
`
`
`
`DISRUPTION THEORY LLC, a limited liability
`company, also d/b/a inmatecall.com and
`inmatecallsolutions.com,
`
`EMERGENT TECHNOLOGIES LLC, a limited
`liability company, also d/b/a inmatecall.com and
`inmatecallsolutions.com,
`
`MARC GRISHAM, a/k/a Mark Grisham,
`individually and also d/b/a inmatecall.com and
`inmatecallsolutions.com, and as Manager of
`Disruption Theory LLC, and
`
`COURTNEY GRISHAM, a/k/a Courtney Brooks,
`individually and also d/b/a inmatecall.com and
`inmatecallsolutions.com, and as President,
`Director, and Ultimate Beneficial Owner of
`Disruption Theory LLC,
`
`
`
`
`
`
`
`
`Case No. 20-CV-06919-VC
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`PLAINTIFF FTC’S NOTICE OF
`MOTION, MOTION FOR
`SUMMARY JUDGMENT
`AGAINST DEFENDANT MARC
`GRISHAM, AND
`MEMORANDUM OF POINTS
`AND AUTHORITIES IN
`SUPPORT THEREOF
`
`Hearing Date: August 26, 2021
`Hearing Time: 10:00 a.m.
`Via Zoom Videoconference
`
`
`
`Defendants.
`
`
`
`MOTION FOR SUMMARY JUDGMENT
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`
`
`
`CASE NO. 20-CV-06919-VC
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`

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`Case 3:20-cv-06919-VC Document 85 Filed 06/24/21 Page 2 of 22
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`TABLE OF CONTENTS
`
`I.
`
`II.
`
`INTRODUCTION ................................................................................................................. 1
`
`PROCEDURAL BACKGROUND ........................................................................................ 2
`
`III. STATEMENT OF MATERIAL FACTS AS TO WHICH THERE EXISTS NO GENUINE
`ISSUE TO BE TRIED .......................................................................................................... 2
`
`A. Defendant Marc Grisham .............................................................................................. 2
`
`B. Defendants in Default ................................................................................................... 3
`
`C. Defendants’ Unlawful Business Practices .................................................................... 3
`
`1. Defendants Misled Consumers by Offering “Unlimited Minutes” Inmate Calling
`Plans ..................................................................................................................... 3
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`2. Defendants Misled Consumers by Posing as Specialized Service Providers ...... 6
`
`D. Marc Grisham Controlled and Personally Participated in the Business Practices of
`Corporate Defendants ................................................................................................... 7
`
`E. Marc Grisham Knowingly Perpetrated the Scam ......................................................... 8
`
`F. Defendants’ Conduct Harmed Consumers.................................................................... 9
`
`IV. LEGAL ARGUMENT ......................................................................................................... 10
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`A. Summary Judgment Standard ..................................................................................... 10
`
`B.
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`Summary Judgment is Appropriate on All Counts ..................................................... 10
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`1. Count I: False Unlimited Minutes Claim ............................................................ 11
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`2. Count II: False Claims of Affiliation with Specialized Service Providers .......... 11
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`C. Marc Grisham is Personally Liable for Injunctive Relief ........................................... 12
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`D. Marc Grisham Has Not Articulated a Valid Defense ................................................. 12
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`E. The Relief Sought is Appropriate in Light of Marc Grisham’s Violations of the FTC
`Act……………………………………………………………………………………13
`
`1. Ban on Offering Inmate Calling Services .......................................................... 14
`
`2.
`
`Prohibition on Misrepresentations Relating to Affiliation and Any Material
`Fact ..................................................................................................................... 16
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`3. Monitoring Provisions ....................................................................................... 17
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`V. CONCLUSION .................................................................................................................... 17
`
`MOTION FOR SUMMARY JUDGMENT
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`TABLE OF AUTHORITIES
`
`Cases
`
`Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ................................................................. 10
`
`FTC v. 120194 Canada, Ltd., 2007 U.S. Dist. LEXIS 12657 (N.D. Ill. Feb. 12, 2007) .............. 14
`
`FTC v. Assail, Inc., 2008 U.S. Dist. LEXIS 130128 (W.D. Tex. Dec. 4, 2008) .......................... 14
`
`FTC v. Bay Area Bus. Council, Inc., 2004 U.S. Dist. LEXIS 6192 (N.D. Ill. Apr. 8, 2004) ....... 14
`
`FTC v. Capital Choice Consumer Credit, Inc., 2004 U.S. Dist. LEXIS 31476 (S.D. Fla. May 4,
`2004) ......................................................................................................................................... 17
`
`FTC v. Check Enf’t, 2005 U.S. Dist. LEXIS 34349 (D.N.J. July 15, 2005) ................................. 14
`
`FTC v. Colgate-Palmolive Co., 380 U.S. 374 (1965) ................................................................... 16
`
`FTC v. Consumer Alliance, Inc., 2003 U.S. Dist. LEXIS 17423 (N.D. Ill. Sept. 29, 2003) ........ 14
`
`FTC v. Cyberspace.com, LLC, 453 F.3d 1196 (9th Cir. 2006) ............................................... 10, 11
`
`FTC v. Digital Altitude, LLC, 2018 U.S. Dist. LEXIS 224949 (C.D. Cal. July 26, 2018) ........... 13
`
`FTC v. Dinamica Financiera LLC, 2010 U.S. Dist. LEXIS 88000 (C.D. Cal. Aug. 19, 2010) ... 14
`
`FTC v. Elegant Sols., Inc., 2020 U.S. Dist. LEXIS 137774 (C.D. Cal. July 6, 2020) ............ 14, 15
`
`FTC v. Elegant Sols., Inc., No. SACV 19-1333 JVS (KESx), (C.D. Cal. July 17, 2020) ............ 17
`
`FTC v. Gill, 265 F.3d 944 (9th Cir. 2001) .............................................................................. 14, 15
`
`FTC v. Gill, 71 F. Supp. 2d 1030 (C.D. Cal. Nov. 2, 1999) ......................................................... 14
`
`FTC v. Grant Connect, LLC, 763 F.3d 1094 (9th Cir. 2014) ................................................. 12, 14
`
`FTC v. Hoyal & Assocs., 2021 U.S. App. LEXIS 17481 (9th Cir. June 9, 2021) ........................ 14
`
`FTC v. Inc21.com Corp., 475 Fed. Appx. 106 (9th Cir. Mar. 30, 2012) ...................................... 10
`
`FTC v. Inc21.com Corp., 745 F. Supp. 2d 975 (N.D. Cal. 2010) ..................................... 10, 14, 16
`
`FTC v. Inmate Magazine Serv. Inc., LLC, No. 3:21cv294-TKW-HTC (N.D. Fla. Feb. 22, 2021)
`................................................................................................................................................... 16
`
`FTC v. John Beck Amazing Profits, LLC, 2010 U.S. Dist. LEXIS 147113 (C.D. Cal. Sept. 15,
`2010) ......................................................................................................................................... 11
`
`
`MOTION FOR SUMMARY JUDGMENT
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`FTC v. John Beck Amazing Profits, LLC, 888 F. Supp. 2d 1006 ........................................... 14, 15
`
`FTC v. Marshall, 781 F. App’x 599 (9th Cir. 2019) .................................................................... 12
`
`FTC v. Medicor, LLC, 2002 U.S. Dist. LEXIS 16220 (C.D. Cal. July 18, 2002) ........................ 14
`
`FTC v. Medlab, 615 F. Supp. 2d 1068 (N.D. Cal. 2009) .............................................................. 10
`
`FTC v. Pantron I Corp., 33 F.3d 1088 (9th Cir. 1994) ................................................................. 11
`
`FTC v. Publ’g Clearing House, Inc., 104 F.3d 1168 (9th Cir. 1997) ........................................... 12
`
`FTC v. Sage Seminars, Inc., 1995 U.S. Dist. LEXIS 21043 (N.D. Cal. Nov. 2, 1995) ................ 11
`
`FTC v. Stefanchik, 559 F.3d 924 (9th Cir. 2009) .......................................................................... 10
`
`FTC v. USA Fin., LLC, 415 F. App’x 970 (11th Cir. 2011) ......................................................... 12
`
`FTC v. Wellness Support Network, Inc., 2014 U.S. Dist. LEXIS 21449 (N.D. Cal. Feb. 19, 2014)
`................................................................................................................................................... 10
`
`In re Cliffdale Assocs. Inc., 103 F.T.C. 100 (1984) ...................................................................... 11
`
`Litton Indus., Inc. v. FTC, 676 F.2d 364 (9th Cir. 1982) .............................................................. 16
`
`Sears, Roebuck & Co. v. FTC, 676 F.2d 385 (9th Cir. 1982) ....................................................... 14
`
`U.S. v. W.T. Grant Co., 345 U.S. 629 (1953) ............................................................................... 13
`
`Statutes
`
`15 U.S.C. § 45(a) ................................................................................................................... passim
`
`15 U.S.C. § 53(b) .......................................................................................................................... 13
`
`Rules
`
`Fed. R. Civ. P. 56 ............................................................................................................................ 1
`
`Fed. R. Civ. P. 56(a) ..................................................................................................................... 10
`
`
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`MOTION FOR SUMMARY JUDGMENT
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`Declaration
`Raymond Manzo
`
`Exhibit
`1
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`Raymond Manzo
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`2
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`
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`
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`TABLE OF EXHIBITS
`
`Description of Exhibit
`Defendant Marc Grisham’s Responses to FTC’s First Set of
`Requests for Admission
`Defendant Marc Grisham’s Responses to FTC’s First Set of
`Interrogatories
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`MOTION FOR SUMMARY JUDGMENT
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`PLEASE TAKE NOTICE that on August 26, 2021 at 10:00 a.m., Plaintiff Federal
`Trade Commission (“FTC” or “Commission”) will move for summary judgment and permanent
`injunction (“Proposed Order”) against Marc Grisham (“Defendant”) for violations of Section
`5(a) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 45(a), as alleged in Counts
`I and II of its Complaint for Permanent Injunction and Other Equitable Relief.
`This motion is made pursuant to Rule 56 of the Federal Rules of Civil Procedure and
`Local Civil Rule 56. This motion is supported by the following Memorandum of Points and
`Authorities, concurrently filed exhibits, all pleadings and other documents on file in this action,
`and all argument and evidence as may be presented to the Court at the time of the hearing.
`
`The uncontroverted evidence establishes the material facts, about which there is no
`genuine issue, to support a finding that Defendant is liable as a matter of law. As alleged in
`Counts I and II of the Complaint, Defendant violated Section 5(a) of the FTC Act in connection
`with the offer and sale of inmate calling plans by misrepresenting that he: (1) provided
`consumers with access to an unlimited number of minutes for a set period at a set price; and (2)
`was affiliated with telecommunications companies. The FTC is entitled to summary judgment
`against Defendant.
`To remedy the harm Defendant caused to consumers and to prevent future law violations,
`the FTC requests that the Court enter the Proposed Order banning Defendant from offering
`inmate calling services to consumers.
`INTRODUCTION
`I.
`This matter is a straightforward deceptive advertising case. Marc Grisham, Courtney
`Grisham, and two companies under their control, Disruption Theory LLC and Emergent
`Technologies LLC, (collectively, “Defendants”) offered and sold inmate calling plans to friends
`and families of incarcerated individuals by falsely promising “unlimited minutes” and by posing
`as telecommunications companies that provided inmate calling services to correctional facilities
`under contract (“Specialized Service Providers”). The undisputed evidence establishes that Mr.
`Grisham’s conduct violated Section 5 of the Federal Trade Commission Act, 15 U.S.C § 45(a).
`His admissions also establish that he ran the unlawful operation and knowingly made these false
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`MOTION FOR SUMMARY JUDGMENT
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`representations that collected $1.2 million from consumers from 2015 to 2020. There is no
`genuine issue as to any material fact establishing his violations of Section 5 of the FTC Act and
`his personal liability for these violations. The FTC is entitled to summary judgment on all counts
`and seeks entry of the Proposed Order banning Mr. Grisham from offering inmate calling
`services to consumers to prevent future law violations and further consumer harm.
`PROCEDURAL BACKGROUND
`II.
`On October 5, 2020, the FTC filed a complaint and ex parte motion for a temporary
`restraining order. Dkt. 1 (“Complaint”); Dkt. 4 (“TRO Motion”). On October 6, 2020, the Court
`issued a temporary restraining order against all Defendants, which prohibited them from making
`misrepresentations to consumers. Dkt. 9. Following a hearing on October 20, 2020, the Court
`extended the TRO. Dkt. 17. Discovery closed on May 17, 2021,1 the deadline for dispositive
`motions is July 22, 2021, and the last day for hearings on dispositive motions is set for August
`26, 2021. Dkt. 67. Trial is set for September 13, 2021. Id. In light of the trial schedule set in this
`matter, Plaintiff respectfully requests a prompt ruling and also remains available to appear for a
`hearing before August 26, 2021.
`STATEMENT OF MATERIAL FACTS AS TO WHICH THERE EXISTS NO
`III.
`GENUINE ISSUE TO BE TRIED
`Defendant Marc Grisham
`A.
`Mr. Grisham sold inmate calling services to consumers through his websites
`inmatecall.com and inmatecallsolutions.com (“Inmate Call Websites”). Declaration of FTC
`Investigator Raymond Manzo in Support of Motion for Summary Judgment (“Manzo Decl.”),
`Ex. 1, at 7; Dkt. 60 ¶ 9. Mr. Grisham controls both websites and registered and renewed both
`domain registrations. Dkt. 60 ¶ 36. He also formed and controls the two corporate defendants,
`Disruption Theory LLC (“Disruption Theory”) and Emergent Technologies LLC (“Emergent
`Technologies”), which were used to process payments for the Inmate Call Websites. Manzo
`Decl., Ex. 2, at 5-6.
`
`1 One deposition was completed after the close of fact discovery as permitted by order of this
`Court.
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`MOTION FOR SUMMARY JUDGMENT
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`Defendants in Default
`B.
`Defendants Disruption Theory, Emergent Technologies, and Courtney Grisham
`(collectively, “Defaulting Defendants”) failed to answer the Complaint, and the clerk entered
`their defaults on February 22, 2021.2 Dkt. 65.
`Defendants’ Unlawful Business Practices
`C.
`Since 2015, Defendants have offered and sold inmate calling plans to friends and family
`members of incarcerated individuals. The FTC’s Complaint alleges that Defendants published
`two core misrepresentations on their websites while offering and selling their inmate calling
`service to consumers. Defendants (1) promised “unlimited minutes” for a set period for a set
`price and (2) claimed affiliations with Specialized Service Providers. The uncontroverted facts
`establish that each claim published on Defendants’ websites was false and likely to mislead
`consumers, and in fact, did mislead consumers.
`Defendants Misled Consumers by Offering “Unlimited Minutes” Inmate
`1.
`Calling Plans
`From 2015 to 2020, Defendants advertised inmate calling plans with “unlimited minutes”
`on the Inmate Call Websites. Manzo Decl., Ex. 2, at 5-6; see also Dkt. 4-4 at 4 (advertising in
`March 2015); Dkt 4-4 at 39-40 (advertising in 2018); Dkt. 4-6 at 8-9, 20-21, 23, 25, 27
`(advertising in 2019 and 2020). Defendants featured the “unlimited minutes” claim on the Inmate
`Call Websites in differentiated font and color. Dkt. 4-6 at 20 (“UNLIMITED Minutes,” “1
`Month of UNLIMITED Talk Time.”). During the relevant period, the Inmate Call Websites
`appeared as follows:
`
`
`
`
`
`
`
`
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`2 In its concurrently filed Motion for Default Judgment, the FTC seeks default judgment and an
`order for permanent injunction against Defaulting Defendants.
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`MOTION FOR SUMMARY JUDGMENT
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`Dkt. 4-6 at 15, 20.
`Defendants repeated the claim to consumers throughout the purchase process. Dkt. 4-4 at
`39-40, 42 (“UNLIMITED Mins”); Dkt. 4-6 at 22-23, 25-26 (“UNLIMITED Mins” and “365
`DAYS OF UNLIMITED TALK”); see also Dkt. 4-6 at 15-16 (citing Att. M at 0:01-0:06 and Att.
`N at 0:01-0:04).3 Defendants’ plans cost between $29.97 to $89.95 for one, three, six, or 12
`month terms and promised that each plan would provide “unlimited minutes.” Manzo Decl., Ex.
`2, at 5-6; Dkt. 4-6 at 23-25. Defendants even told consumers that they were “Voted #1 Inmate
`Call Provider by U.S. families.” Dkt. 4-4 at 42; Dkt. 4-6 at 23; see also Dkt. 4-6 at 15-16 (citing
`Att. M at 0:09, Att. N at 0:06).
`Mr. Grisham admits that his calling plans did not provide “a single minute of talk time,”
`and that the claim was a “marketing technique used specifically to distinguish [Defendants] from
`
`3 Attachments M and N, video file attachments to Dkt. 4-6 (Declaration of Yasser Dandashly),
`were manually filed on October 5, 2020. See Dkt. 4-7.
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`[their] competition.” Dkt. 20 at 5-6; see Manzo Decl., Ex. 1 at 5-6 (admitting that his statements
`to the Court during the October 10, 2020 hearing were truthful). Indeed, consumers who bought
`Defendants’ inmate calling plans did not receive the promised unlimited minutes. Dkt. 4-4 at 15,
`36, 74, 86; Dkt. 4-5 at 222; Dkt. 4-6 at 29-30.
`Mr. Grisham also admits that consumers who purchased Defendants’ calling plans were
`still required to open and fund prepaid calling accounts with their correctional facility’s approved
`telecommunications provider. Manzo Decl., Ex. 1, at 4-5; see also Dkt. 4-4 at 15-16, 22-27, 35,
`133, 145-48, 150-52; Dkt. 4-5 at 222 (consumers describing post-transaction instructions from
`Defendants to separately open and fund a prepaid account with their correctional facility’s
`approved Specialized Service Provider). Mr. Grisham even admits that consumers were likely to
`be misled by the unlimited minutes claim: “I’m not saying that [the claim] unlimited minutes
`doesn’t mislead some people.” Dkt. 20 at 17.
`Numerous consumer accounts establish the fact that consumers were actually misled by
`Defendants’ false claim. Dkt. 4-4 at 59-60, 74, 85-86, 98-99, 124, 132-33, 160-62; Dkt. 4-5 at
`222. For example:
`
`• A consumer in Stockton, California stated: “Based on the website’s
`advertisements, I believed InmateCall’s ‘unlimited minutes’ meant my friend
`would be able to call me for an unlimited amount of time for an entire month
`if I paid a flat fee for the month . . . Based on the advertisements, I didn’t
`think that I had to pay per minute with the calling plan. I also didn’t think that
`I had to pay or open an account with a different company to use InmateCall’s
`unlimited calling plan.” Dkt. 4-4 at 35.
`
`• A mother in Texas stated: “Inmate Call advertised ‘unlimited’ phone calls
`with inmates for a set monthly rate. This sounded like a good way to talk with
`my son so I used my credit card to purchase a 30-day unlimited minutes
`calling plan . . . Inmate Call sent me an email with ‘Sign Up Instructions’ . . .
`[that] instructed me to register a phone number with [the jail] and pre-pay
`connection fees, at a rate of $4.50-$17 per 15-minute call. . . . I was angry that
`Inmate Call lied about offering an unlimited monthly calling plan. The
`company’s website did not mention anything about additional costs paid to the
`corrections facility. . . . Inmate Call is a fraud and should be shut down.” Dkt.
`4-4 at 15-16.
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`• A mother in New Hampshire stated: “I saw that Inmate Call offered
`‘unlimited’ calling plans for a set monthly rate. This seemed like a better deal
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`MOTION FOR SUMMARY JUDGMENT
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`than paying per-minute so I purchased Inmate Call’s unlimited, monthly plan.
`. . . but, in fact, the phone plan had never covered any of the calls that [the
`inmate] made to us. . . . I soon learned that this company was not even
`authorized to operate at my inmate’s facility so, obviously, I never received
`service from them. Instead I had to initiate a separate calling plan in order to
`receive service. However that didn’t stop Inmate Call Solutions from billing
`me anyway -- for services that they didn’t provide and couldn’t have
`provided.” Dkt. 4-4 at 4-5.
`
`There is no dispute that Defendants represented to consumers that they provided
`“unlimited minutes” inmate calling plans for a set period for payment of a set price, and that the
`claim was false.
`Defendants Misled Consumers by Posing as Specialized Service Providers
`2.
`The Inmate Call Websites also featured the names, logos, and website addresses of three
`Specialized Service Providers contracted with prisons and jails to offer telephone services to
`incarcerated individuals – Global Tel*Link Corporation (“GTL”), Inmate Calling Solutions, LLC
`(“ICS”), and Securus Technologies, Inc. (“Securus”). Dkt. 4-6 at 18-21; Dkt. 4-5 at 4, 97, 108.
`As shown below, underneath these companies’ logos, Defendants repeated the false unlimited
`minutes claim:
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`Dkt. 4-6 at 18-19.
`Mr. Grisham admits he and his companies are not affiliated with GTL, ICS, or Securus.
`Dkt. 4-5 at 5, 97, 108; Dkt. 60 ¶ 47. He admits that the Inmate Call Websites referenced
`Specialized Service Providers. Dkt. 20 at 7. He also admits that his companies Disruption Theory
`and Emergent Technologies did not have contracts with any correctional facility to provide
`inmate calling services. Manzo Decl., Ex. 1, at 5.
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`Defendants’ use of Specialized Service Providers’ names, logos, and website addresses
`deceived consumers, who believed Defendants were associated with GTL, ICS, or Securus. Dkt.
`4-5 at 222-23; Dkt. 4-4 at 74; Dkt. 4-4 at 4-5. For example:
`
`• A consumer in Byron, Illinois stated: “InmateCall put the word secure and
`[S]ecurus in their website name to trick people into paying them for phone
`time accounts for their loved ones that are in prison. The only company that
`we can actually get service through is Securus [T]echnologies. So this
`company ‘Inmate Call’ took $116.51 from my bank account and gave me no
`service.” Dkt. 4-5 at 223.
`
`• A mother in Fayetteville, Georgia stated: “In November 2018, I went on the
`internet with the intention of creating an account with Securus. I put the word
`‘securus’ in the Google search engine, and I clicked on the first link that came
`up. The first link went to inmatecall.com, which I thought was the Securus
`website because it had a list of names of different service providers, including
`Securus. . . . after I signed up for an account at inmatecall.com, I received an
`email from InmateCall at support@inmatecall.com saying that I needed to
`sign up with Securus. This is when I realized InmateCall and Securus were
`two different companies. I realized that I had not in fact visited the legitimate
`Securus website, and that I had not purchased anything from Securus.” Dkt. 4-
`4 at 74.
`
`• A mother in Modesto, California stated: “Based on statements on the website,
`I thought Inmate Call was IC Solutions. . . . After I purchased the unlimited
`calling plan . . . I called IC Solutions and spoke with a representative, who
`told me that IC Solutions was not affiliated with Inmate Call and that I had to
`pay per-minute to talk with my son.” Dkt. 4-4 at 59.
`
`There is no dispute that Defendants falsely claimed to be affiliated with Specialized
`Service Providers.
`D. Marc Grisham Controlled and Personally Participated in the Business
`Practices of Corporate Defendants
`Mr. Grisham admits he formed Disruption Theory and Emergent Technologies to obtain
`merchant accounts to process consumer payments on the Inmate Call Websites. Manzo Decl.,
`Ex. 2, at 5. He “owned, operated, and managed” both companies. Id. And as the self-described
`Owner/President of each, Mr. Grisham oversaw the day-to-day operations of his companies,
`including managing their administrative duties and finances. Dkt. 60 ¶¶ 9, 34-35; Manzo Decl.,
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`Ex. 2, at 5-6, 8-9. He submitted an application to a financial institution to obtain services on
`behalf of corporate defendants. Manzo Decl., Ex. 2, at 10-11; Dkt. 60 ¶ 35. He was also a
`signatory on Disruption Theory’s bank accounts and his personal bank account received funds
`from a bank account tied to Emergent Technologies. Dkt. 60 ¶ 35; Dkt. 15-1 ¶ 5. In addition, Mr.
`Grisham owns and controls the Inmate Call Websites, and he hired and managed employees and
`contractors who designed and developed the websites and their advertisements. Dkt. 60 ¶¶ 9, 36;
`Manzo Decl., Ex. 2, at 8-10.
`Defendant does not dispute that he controlled the business activities and finances of
`corporate defendants.
`E. Marc Grisham Knowingly Perpetrated the Scam
`Mr. Grisham was notified of consumer complaints regarding Defendants’ failure to
`provide the promised “unlimited minutes,” and he received legal warnings and lawsuits
`regarding improper use of telecommunications companies’ registered trademarks. Many
`consumers filed complaints about the Inmate Call Websites with the Better Business Bureau to
`report that they had not received the unlimited minutes Defendants had promised. Dkt. 4-5 at
`221, 222. The Better Business Bureau notified Mr. Grisham of these consumer complaints using
`his website inmatecall.com’s customer service portal. Dkt. 4-5 at 226-27. A few months later, in
`November 2019, Disruption Theory’s merchant account was terminated due to “excessive
`chargebacks,” 4 where “Service Not Provided” was the most common reason cited. Dkt. 4-6 at
`28, 294. Mr. Grisham admits that all of his merchant accounts were terminated for exceeding the
`chargeback limit imposed by payment processors and that he had difficulty obtaining new
`merchant accounts. Manzo Decl., Ex. 2, at 11; Manzo Decl., Ex. 1, at 6; Dkt. 20 at 10.
`Mr. Grisham and his companies were also warned and sued by Specialized Service
`Providers to cease improper use of their registered trademarks. ICS, GTL, and Securus each
`contacted Mr. Grisham demanding that his companies cease using their registered trademarks.
`Dkt 4-5 at 6-7, 97-98, 109, 213-16. In September 2010, ICS notified one of Mr. Grisham’s
`
`4 Chargebacks occur when cardholders dispute the legitimacy of a charge with their issuing bank.
`Dkt. 4-6 at 38.
`
`MOTION FOR SUMMARY JUDGMENT
`
`8
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`CASE NO. 20-CV-06919-VC
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`Case 3:20-cv-06919-VC Document 85 Filed 06/24/21 Page 14 of 22
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`companies that the use of ICS’s trademark on inmatecallsolutions.com “creates a strong
`likelihood of consumer confusion” and that ICS “has evidence of actual confusion having
`already occurred among the public.” Dkt. 4-5 at 213 (emphasis in original). In 2012, GTL sued
`another one of Mr. Grisham’s companies for trademark infringement. Dkt. 4-5 at 6-7. Following
`a settlement to cease its misleading activities, Mr. Grisham’s company resumed improper use of
`GTL’s trademarks and was sued again in 2014. Id.
`There is no dispute that Defendant has knowingly continued his deceptive practices since
`
`2010.
`
`Defendants’ Conduct Harmed Consumers
`F.
`Hundreds of consumers reported Defendants’ deceitful conduct to the FTC, Better
`Business Bureau, and state attorneys general. Dkt. 4-5 at 221; Dkt. 4-6 at 44, 375-424.
`Defendants’ false claims induced at least 12,000 consumer purchases that funneled $1.2 million
`of ill-gotten gains into Defendants’ pockets. Dkt. 4-6 at 9; Manzo Decl., Ex. 1, at 7. Consumers
`describe their experiences with Defendants as follows:
`
`• “How can this be legal? . . . I’m disabled & don’t have money to throw away
`that I can use for food & medication . . . I want to stop Inmate Call from
`hurting other families.” Dkt. 4-4 at 99, 102.
`
`• “I believe Inmate Call Solutions is committing a fraud by charging people for
`unlimited calling plans that they can’t provide.” Dkt. 4-4 at 163.
`
`• “I am submitting this declaration to the Court because I want to stop Inmate
`Call from cheating people during these desperate times.” Dkt. 4-4 at 125.
`
`Defendants also refused to provide consumers with refunds, despite promising a money-
`
`back guarantee on the Inmate Call Websites. Dkt 4-6 at 26 (inmatecall.com: “Refunds may be
`requested within 7 days of purchase.”); Dkt. at 4-4 at 59 (“The website also stated that . . .
`Inmate Call would refund my money if there was any issue.”); Dkt. at 4-4 at 16 (“I ultimately
`submitted at least seven refund requests to Inmate Call. To date, Inmate call has not returned any
`of my money.”); Dkt. 4-4 at 36 (“I did not receive a refund”); Dkt. 4-4 at 62 (“I still have not
`received a refund from Inmate Call.”); Dkt. 4-4 at 61 (“I would like my refund im [sic] not a rich
`
`MOTION FOR SUMMARY JUDGMENT
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`9
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`CASE NO. 20-CV-06919-VC
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`Case 3:20-cv-06919-VC Document 85 Filed 06/24/21 Page 15 of 22
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`person.”); see also Dkt. 4-4 at 87. Numerous consumers had to seek relief from their banks or
`credit card companies. Dkt. 4-4 at 75 (“Since InmateCall would not respond to my multiple
`requests for a refund, I disputed the charge with my credit card company.”); see also Dkt. 4-4 at
`89.
`
`As one of many aggrieved consumers stated: “Inmate Call added a bad experience onto a
`bad experience. The company preys on people who are already at their most vulnerable.” Dkt. 4-
`4 at 89.
`LEGAL ARGUMENT
`IV.
`Summary Judgment Standard
`A.
`Summary judgment should be rendered if the pleadings, discovery and materials on file,
`and any affidavits, show that “there is no genuine dispute as to any material fact and that the
`movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those
`which “might affect the outcome of the suit,” and the Court views the evidence in the light most
`favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);
`FTC v. Stefanchik, 559 F.3d 924, 927 (9th Cir. 2009). The FTC routinely seeks and is granted
`summary judgment in its cases. See, e.g., FTC v. Stefanchik, 559 F.3d at 929; FTC v. Wellness
`Support Network, Inc., 2014 U.S. Dist. LEXIS 21449 (N.D. Cal. Feb. 19, 2014); FTC v.
`Inc21.com Corp., 745 F. Supp. 2d 975 (N.D. Cal. 2010), aff’d, FTC v. Inc21.com Corp., 475
`Fed. Appx. 106 (9th Cir. filed Mar. 30, 2012); FTC v. Medlab, 615 F. Supp. 2d 1068 (N.D. Cal.
`2009).
`Summary Judgment is Appropriate on All Counts
`B.
`The FTC alleged two counts of Defendant’s violations of Section 5 of the FTC Act, 15
`U.S.C. § 45(a). Section 5 of the FTC Act prohibits “unfair or deceptive acts or practices in or
`affecting commerce.” 15 U.S.C. 45(a). An act or practice is deceptive if Defendant: (1) made a
`representation; (2) that was likely to mislead consumers acting reasonably under the
`circum