Federal Trade Commission v. Lanier Law, LLC
194 F. Supp. 3d 1238
M.D. Fla.2016Background
- FTC sued Lanier Law LLC, Fortress Law Group LLC, Surety Law Group LLP, Liberty & Trust Law Group, Fortress Law Group PC, Michael W. Lanier, Rogelio Robles, and others for deceptive marketing and sale of mortgage-assistance-relief services (MARS), alleging violations of Section 5 of the FTC Act, Regulation O (MARS Rule), and the Telemarketing Sales Rule (TSR).
- Defendants used a common business model: mail/telephonic solicitations (including an official-looking "Economic Stimulus" flyer), third-party "staffing"/processing companies (DOLMF, Pinnacle, FURF, Safepoint), and a network of very-limited "of‑counsel" attorneys; consumers paid substantial advance fees for promised loan modifications or foreclosure defense.
- Consumer declarations and business records showed widespread oral misrepresentations (guarantees, large rate/payment reductions, high success rates), advance-fee collection before any lender agreement, poor or nonexistent lawyer involvement, repeated document requests, failure to obtain promised results, and refusal or failure to refund fees.
- FTC moved for summary judgment; Lanier moved for partial summary judgment arguing "of‑counsel" attorneys (not he) were solely responsible for legal representation and that Regulation O’s attorney-exemption precluded liability.
- Court found the entities operated as a common enterprise, granted FTC summary judgment on Section 5 and Regulation O claims (advance-fee, misrepresentations, disclosure failures), granted TSR/do-not-call claims, held Lanier and Robles individually liable, denied Lanier’s partial summary judgment, and ordered disgorgement of net revenues (~$13.586M) and permanent injunctive relief to be drafted by the FTC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the entities formed a common enterprise so acts of one are attributable to all | FTC: entities, staffing firms, and DC firms operated as integrated enterprise (shared control, employees, offices, funds, marketing) | Defendants: formal separateness, Lanier lacked intent or formal control over DC entities | Court: common enterprise established; FTC may treat acts across entities as attributable to all |
| Whether defendants engaged in unfair/deceptive acts under Section 5 (misrepresentations about loan-modifications, attorney involvement, success rates) | FTC: widespread material misrepresentations (oral and written net impressions) induced consumers to pay | Defendants: disclaimers in contracts / some legal work performed; Lanier: of‑counsel attorneys were responsible | Court: misrepresentations were material and likely to deceive; disclaimers did not cure deceptive net impression; summary judgment for FTC on Counts I–II |
| Whether defendants violated Regulation O (MARS) — advance-fee prohibition, misrepresentations, disclosure requirements; applicability of attorney exemption | FTC: defendants are MARS providers who violated advance-fee ban, misrepresentations, and failed required disclosures; attorney-exemption does not apply because firms/attorneys did not meet exemption requirements | Defendants: attorney exemption applies (services were part of practice of law via of‑counsel network); exemption invalid as applied | Court: Regulation O validly applies; attorney-exemption requires compliance with state law and active legal practice — not satisfied here; summary judgment for FTC on Counts III–V |
| Whether defendants violated TSR / Do-Not-Call rules (calling DNC numbers without paying access fee) | FTC: common enterprise caused outbound telemarketing to numbers on national DNC list and did not pay access fees | Defendants: Lanier denies directing telemarketing; disputes control of third parties | Court: evidence shows telemarketing by staffing firms and calls to DNC numbers without required fee; summary judgment for FTC on Counts VI–VII |
| Individual liability of Lanier and Robles | FTC: Lanier and Robles exercised control, were actively involved, knew or should have known of deceptive practices; thus individually liable | Defendants: limited or no formal control/ownership of DC entities; limited direct involvement | Held: Both Lanier and Robles had authority to control, active involvement, and knowledge; individually liable |
| Remedy: monetary disgorgement and injunction | FTC: disgorgement of net revenues (~$13.586M) and permanent injunction with fencing-in provisions | Defendants: no contrary computation offered; object to breadth | Court: disgorgement ordered (adjusted amount), permanent injunction warranted; FTC to submit proposed judgment |
Key Cases Cited
- F.T.C. v. World Travel Vacation Brokers, Inc., 861 F.2d 1020 (7th Cir. 1988) (misrepresentations inducing purchase violate Section 5)
- F.T.C. v. IAB Mktg. Assocs., LP, 746 F.3d 1228 (11th Cir. 2014) (liability standards and individual responsibility for deceptive marketing)
- F.T.C. v. Washington Data Resources, 856 F. Supp. 2d 1247 (M.D. Fla. 2012) (common-enterprise analysis in FTC actions)
- Amy Travel Serv., Inc. v. F.T.C., 875 F.2d 564 (7th Cir. 1989) (standards for individual liability and authority to control)
- Gem Merch. Corp. v. F.T.C., 87 F.3d 466 (11th Cir. 1996) (individual liability where owner controlled corporate practices)
- Heintz v. Jenkins, 514 U.S. 291 (1995) (federal regulation can apply to lawyers when engaged in regulated conduct)