Fed. Trade Comm'n v. Moses
913 F.3d 297
2d Cir.2019Background
- In 2009 Briandi and Moses founded and ran a network of ~13 corporate debt-collection entities that bought payday-loan portfolios and used aggressive collection scripts.
- Collectors routinely misidentified themselves, threatened criminal prosecution, contacted third parties, and refused to provide debt details; hundreds of consumer complaints and call recordings documented these practices.
- In Feb. 2013 Briandi and Moses executed an Assurance of Discontinuance (AOD) with the New York AG conceding applicability of federal/state law and promising compliance; they later formed new entities and continued the practices.
- The FTC sued in Feb. 2014 under the FTCA (15 U.S.C. § 45) and FDCPA (15 U.S.C. § 1692 et seq.), obtained ex parte relief, and moved for summary judgment seeking disgorgement of $10,852,396 (gross receipts).
- The magistrate judge recommended, and the district court adopted, summary judgment for the FTC: (1) corporate defendants violated the FTCA/FDCPA; (2) Briandi was individually liable based on authority and knowledge; (3) disgorgement equaling gross receipts was appropriate.
- On appeal the Second Circuit affirmed: Moses’s appeal dismissed for failure to brief; Briandi’s challenges to discovery, individual liability, and disgorgement were rejected.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Denial of additional discovery | FTC: no extension needed; discovery was adequate and defendants unused the year granted | Briandi: needed more time under Rule 56(d) to develop facts to oppose summary judgment | Waived by Briandi (no Rule 56(d) affidavit) and abused no discretion; denial affirmed |
| 2. Standard for individual liability under FTCA/FDCPA | FTC: individuals liable if they participated or had authority to control and had knowledge (actual, reckless, or willful ignorance) | Briandi: contested that he lacked control and knowledge to be personally liable | Court applied FTCA standard (same for FDCPA enforcement) and found it satisfied as a matter of law |
| 3. Application to Briandi (control & knowledge) | FTC: Briandi was co-founder, 50% owner, co-director, general manager, signer on accounts, present on collection floor, received compensation — had authority and knowledge | Briandi: claimed reduced involvement after becoming a pastor and denied participation/knowledge | Sufficient undisputed evidence of authority and knowledge (including post‑AOD duty and reckless indifference); individual liability affirmed |
| 4. Disgorgement amount (gross receipts $10,852,396) | FTC: gross receipts reasonably approximate unjust gains; presumption of reliance applies where misconduct is widespread | Briandi: amount excessive; evidence limited to specific calls/complaints and not proof all receipts were from fraud | Two-step test met: FTC showed widespread dissemination and receipts baseline; defendants failed to rebut; disgorgement affirmed |
Key Cases Cited
- FTC v. Verity Int'l, Ltd., 443 F.3d 48 (2d Cir. 2006) (elements of deceptive practice under §5(a))
- Amy Travel Serv., Inc. v. FTC, 875 F.2d 564 (7th Cir. 1989) (individual liability where participation or control plus knowledge exists)
- FTC v. Bronson Partners, LLC, 654 F.3d 359 (2d Cir. 2011) (Section 13(b) injunctive authority encompasses equitable monetary relief/disgorgement)
- FTC v. BlueHippo Funding, LLC, 762 F.3d 238 (2d Cir. 2014) (presumption of consumer reliance and using gross receipts as disgorgement baseline)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (FDCPA violations deemed unfair or deceptive acts under the FTCA)