Greenspoon Marder Law Attorneys Obtain Dissolution of an Injunction Brought by Florida’s Attorney General

Mar 10, 2016

Court sides with travel club operators, dissolving an injunction with asset freeze and appointing a receiver and monitor, because the Office of the Attorney General failed to establish a legal right to such drastic relief

Fort Lauderdale, Fla. – March 10, 2016 – Attorneys Richard Epstein and Brian Cummings, of Greenspoon Marder, recently secured the dissolution of a temporary injunction with asset freeze and appointment of a receiver and monitor that had been imposed on the firm’s clients without notice at the request of Florida’s Office of the Attorney General (“OAG”).

Epstein and Cummings represented three companies operating a membership travel club known as Resort Services International (“RSI”), as well as an affiliated sales company, Florida Beach Destination Club, LLC (“FB”), and their four principals. Based in Central Florida, RSI has been in business for 15 years and is a provider of private-branded, leisure, lifestyle, and travel-benefits programs. It employs more than 100 people. FB was an independent retailer of its own travel club product fulfilled by RSI.

On January 5, Judge Alice L. Blackwell of the Ninth Judicial Circuit in Orange County entered the injunction, appointing a receiver over FB that has effectively destroyed that company, and appointing a monitor over RSI that drastically disrupted its business operations. The OAG sought the entry of the injunction without notice after having the court file sealed and presenting the Court with more than 5,000 pages of documents, most of which were copies of consumer complaints about companies not involved in the lawsuit. RSI and FB were unaware of the investigation and lawsuit by the OAG until January 11, 2016, when representatives of the receiver/monitor appeared at FB’s offices to shut down their operations and contacted RSI’s employees, financial institutions and vendors, causing significant disruption.

The OAG alleged that RSI, FB, and a third company, Map Destinations, LLC (not represented by Greenspoon Marder) engaged in an alleged “scheme” to sell travel club memberships that the OAG contended, without evidence, lacked value. During a three-day evidentiary hearing, Epstein and Cummings were able to demonstrate to the Court that the OAG had asserted claims based solely upon unverified consumer complaints, mostly against companies not named in the lawsuit, and there was absolutely no evidence that RSI or FB engaged in any wrongdoing. In closing arguments, Epstein characterized the lawsuit as an invalid attempt by the OAG to usurp the authority of the Florida Legislature by creating and imposing standards for the travel club industry through a lawsuit rather than through legislation. The Court agreed with the defense, expressly declining to “legislate from the bench” before ordering the injunction dissolved and the receiver/monitor terminated as to RSI and FB on January 29, 2016.

“It seems clear that the OAG does not like the fact that the Florida Legislature has not yet developed a statutory scheme for the regulation of the travel club industry,” Epstein said. “In fact, many of our clients, including RSI and Florida Beaches feel the same way and have been actively working with trade associations and others in the industry to develop uniform standards and guidelines for this industry. However, the OAG cannot, by executive fiat, create a broad new form of regulation through a lawsuit and impose its own previously unannounced rules on RSI and Florida Beaches. Had the OAG simply contacted our clients in its investigation, its ignorance about RSI and FB would have dispelled in private rather than in the context of a public court proceeding.”

Although the lawsuit remains pending, Greenspoon Marder has been actively working with the OAG to address and resolve any remaining issues raised in its lawsuit and to ensure that RSI will continue to provide travel and other services to its 105,000 members. The future of FB is less clear, given the appointment of the receiver completely shut down the business. This lawsuit is part of a broader attack by the OAG on the travel industry in Florida, filed simultaneously with three other lawsuits across the state in December. Epstein and Cummings are representing the defendants in two of the other three lawsuits.

Epstein is the Chair of Greenspoon Marder Law’s Litigation Practice Group and manages the firm’s complex litigation and class action defense practice. Mr. Epstein routinely appears in state and federal trial and appellate courts throughout the country. He is based at the firm’s
Ft. Lauderdale’s office.

Cummings is Senior Counsel in Greenspoon Marder’s Tampa office and is a member of the firm’s Creditors’ Rights and Commercial Litigation Practice Groups. He has experience litigating a wide variety of commercial matters and civil disputes, including class action defenses, in state and federal courts, and has also handled multiple appellate cases.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 225 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has maintained a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

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This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

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Greenspoon Marder Law Attorneys Obtain Dissolution of an Injunction Brought by Florida’s Attorney General

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