Iowans accused of conspiring to violate California’s ban on puppy-mill dogs

A group of Iowans are facing a potential class-action lawsuit alleging they constructed an elaborate scheme to violate California’s ban on puppy-mill dogs by laundering puppies through companies intended to look like rescue organizations.

The lawsuit was filed Thursday in U.S. District Court by the Animal Legal Defense Fund on behalf of two California consumers.

In 2019, California enacted a law prohibiting the retail sale of puppies except for those rescued by bona fide shelters and nonprofit rescue organizations.

The newly filed lawsuit alleges that a group of Iowans, led by JAK’s Puppies Inc., an Iowa corporation named after founders Jolyn Noethe and Kimberly Dolphin, have routinely and systematically violated the California law.

JAK’s is a for-profit puppy broker based in Britt, Iowa, and according to the plaintiffs it “churns through thousands of designer and pure-bred puppies annually and acquires its dogs from puppy mills.”

JAK’s is located at 2685 Grant Ave., in Britt, and is inspected by the U.S. Department of Agriculture as an animal broker. An August 2020 inspection report indicates there were 254 puppies on the site at that time.

The lawsuit alleges that after the Iowa attorney general sued JAK’s and others in 2019 over a “puppy laundering” designed to thwart a Chicago puppy-mill ban, JAK’s embarked on a separate scheme to sell puppy mill dogs to California consumers.

According to the Animal Legal Defense Fund, JAK’s and others “created an elaborate vertical scheme whereby each of the necessary steps in the puppy laundering — purchase from puppy mills, rebranding of puppies as rescues, transport of such rebranded puppies, and sale of such puppies to consumers through pet stores — was perpetrated by knowing co-conspirators/associates.”

One of the newly created entities is alleged to be Rescue Pets Iowa, formed two weeks before the California ban took effect. Russell Kirk of Ottumwa was the owner of Rescue Pets Iowa, and was also a defendant in the lawsuit brought by the attorney general.

According to the new lawsuit, Rescue Pets Iowa was a corporate shell whose only purpose was to serve as a conduit through which JAK’s could route the legal titles for commercially bred dogs so they could be labeled as “rescues” before reaching consumers in California.

The lawsuit claims Kirk is also a member of an entity called TBHF, which does business as The Pet X Change, an Iowa company. TBHF allegedly paid for the certificates of veterinary inspections that were required to transfer the “rescue” puppies from Iowa to California, and is located at Noethe’s personal residence in Britt.

A third Iowa company, Subject Enterprise Inc, based in Wesley, is a transportation company that exclusively serves JAK’s and trucks puppies into California for sale to pet stores. The owner of Subject Enterprises is Coda Subject, the nephew of Noethe, according to the lawsuit.

Each of the shipments were “grueling, 30-plus hour affairs for the weeks-old puppies transported from Iowa to California,” the lawsuit alleges. “Puppies did not survive the trip. According to Subject Enterprise notes, a chihuahua was ‘dropped and died,’ another ‘puppy died on west coast truck,’ and a pet store refused to pay for a puppy who ‘died in transit.’

Upon their arrival in California, the puppies spent two to three hours at a business named Bark Adoption – a garage operated out of the owner’s home, which was outfitted with 20 stacked cages. From there, the dogs were quickly sent to pet stores where they were displayed in cages bearing the legally required statement disclosing the shelter or rescue group from which each animal was obtained.

The stores disguised their payments to JAK’s through exorbitant “transport costs” paid to Subject Enterprise, allegedly paying Subject up to $900 per puppy for transportation, rather than the usual rate of $35 to $65 per puppy. Subject then relayed all but a small portion of the payments to JAK’s, the lawsuit alleges.

From November 2018, through September 2019, these entities are alleged to have sent more than 2,000 puppies to pet stores in California. Shipments continued well into 2020, the lawsuit alleges.

As part of the resolution of the Iowa attorney general’s lawsuit, Rescue Pets Iowa was forced to dissolve in October 2019. However, Kirk’s involvement in the alleged puppy laundering ring continued through his role in TBHF, which he allegedly ran with his brother, Noethe’s alleged “romantic partner,” the lawsuit claims.

The lawsuit accuses the defendants of money-laundering and wire-fraud violations of the federal Racketeer Influenced and Corrupt Organizations Act, as well as violations of California’s Unfair Competition law and the California Consumer Legal Remedies Act.

The lawsuit seeks an order enjoining the defendants from selling in California any dogs that are sourced
from puppy mills or commercial breeders, as well as restitution for consumers, punitive damages and a full “accounting and disgorgement” the profits that grew out of the allegedly unlawful conduct.

The plaintiffs in the case are Rebecca Carey a resident of Santa Barbara County who purchased a cockapoo puppy from an Animal Kingdom pet store in January 2019, and Cody Latzer, a San Luis Obispo County resident who purchased an Australian cattle dog from an Animal Kingdom in March 2019.

In addition to the Iowa companies, the defendants in the case include Bark Adoptions, a California corporation run by Stephanie Vaughn of Winchester, California, and Ana Diaz, of Menifee, California; Pet Connect Rescue Inc., a Missouri-based company owned by Ray and Alysia Rothman; and Micada Inc., which does business as Animal Kingdom Pet Shop and is owned by Adam Tipton, a resident of California.

The defendants have not yet filed responses to the lawsuit.

The 2019 lawsuit brought by the Iowa attorney general resulted in a consent judgment that led to a $60,000 payment to the state’s Consumer Education and Litigation Fund. Under the terms of that deal, Hobo K9 Rescue, which was run by Noethe, and Rescue Pets Iowa were permanently dissolved; all of the defendants promised to refrain from transferring dogs in an attempt to evade laws restricting the sale of commercially bred dogs; and Noethe, Dolphin and Kirk were prohibited from organizing any new non-profit corporations or serving as officers or directors of any animal non-profit for three years.

The consent judgment did not prevent consumers or others from taking further action against the defendants.