Yesterday we reported that the U.S. Poultry and Egg Association had prevailed in a suit against Tarzango, LLC for misrepresenting itself in order to steal attendee housing bookings from the International Production & Processing Expo. Before you get too excited, after examining the docket, John Foster, Esq., CHME, of Foster, Jensen & Gulley, determined that the case result was from a default judgment, not a judgment on its merits, and the likelihood of the defendants ever paying the $750,000 in damages awarded to USPoultry was slim. John Starkey, president of USPoultry, agrees. He says, “It’s a long way between winning the judgment and getting the money!”
The problem, says Foster, is, “Until [associations] are able to pierce the corporate veil so that defendants have to pay money out of their own pocket, [the poachers] are going to keep doing this. They can declare bankruptcy and go out of business tomorrow and then open up a new business doing the same thing next week. Tarzango can potentially just declare bankruptcy and then the owner(s) can incorporate under a new name, it happens every day.”
The case was brought by USPoultry because Tarzango used its name and logo to poach business from its conference room block. “That’s the violation,” says, Foster. “It is not illegal to advertise to provide housing to an association’s attendees as long as the housing company doesn’t misrepresent itself as the association’s official representative.” Starkey says the logo was in the solicitation, but USPoultry acted because of the phrasing Tarzango used. He says, “They were posing as us. We are just sick of dealing with people like this, they are putting our exhibitors and attendees in a bad way, so we said, ‘We’ve had enough and we’re going to take ‘em to court.’”
USPoultry is pursuing Tarzango for the money, but it remains to be seen whether the lawsuit will deter other poachers. As well as legal actions, there are things that meeting planners can do to help prevent this kind of fraud. Foster’s advice? “Congress is considering bills that would make this activity by poachers illegal. That’s where the industry should be focusing its efforts, pushing for legislation.
Starkey agrees with that, saying, “Our industry needs to get behind the legislation to stop this kind of deceptive practice, it gives both the hotels and the event a bad name.” Foster also suggests associations should educate members on why booking outside the official room block is hurting everyone. For some people, that education was earned the hard way: The initial tip off for USPoultry came from an exhibitor who had booked lodging for the International Production & Processing Expo through a third-party the year before, and then arrived at the event to find they did not have a reservation. When they received a similar solicitation in 2017, they forwarded it to USPoultry to warn them. “Like any good show manager, we try to protect our exhibitors and attendees,” says Starkey, “And I would hope that others will see that we are serious about protecting what belongs to us.”
Whether or not Tarzango pays the damages, Starkey is already finding the judgment useful. “I had a solicitation from a list provider trying to sell me a list of our own attendees. We don’t release our list so I knew it was fraudulent. I just sent them the press release about Tarzango and said, ‘This is what we do to people who try to defraud us.’”
