Federal Trade Commission v. Michael W. Lanier
16-16524
| 11th Cir. | Nov 2, 2017Background
- Michael W. Lanier, through Lanier Law and related entities, marketed mortgage assistance relief services (MARS), charging upfront fees and promising loan modifications (lower payments, reduced interest/principal).
- Lanier shared office space and personnel with co-defendants who ran "staffing agencies" and created District of Columbia "virtual" law firms that forwarded mail and used Lanier’s payment processing; an "of counsel" network provided minimal remote lawyer involvement.
- Consumers paid advance fees (often > $2,000), were sometimes told to stop mortgage payments, and many received no lender contacts or no promised modifications; some received worse terms.
- The FTC sued Lanier and others under Section 5 of the FTC Act, the MARS Rule, and the TSR for deceptive practices, advance-fee collection, false success-rate claims, and failure to make required disclosures.
- The district court granted the FTC summary judgment, entered a permanent injunction, and a monetary judgment; it found a common enterprise and that Lanier was individually liable based on his control and participation. Lanier appealed.
Issues
| Issue | Plaintiff's Argument (FTC) | Defendant's Argument (Lanier) | Held |
|---|---|---|---|
| Jurisdiction: whether Lanier’s original notice perfected his individual appeal | Lanier’s October 10 notice ("Lanier Law, et al.") reflected intent to appeal and included him | Lanier later filed an untimely amended notice and argued the original did not perfect his personal appeal | Court held the October 10 notice sufficiently indicated Lanier’s intent and perfected his individual appeal |
| Admissibility of FTC declarations at summary judgment | Declarations are proper under Rule 56 and may be considered because their substance could be presented admissibly at trial | Declarations are hearsay/unreliable and prepared by FTC attorneys, so they should be excluded | Court held Rule 56 permits consideration if material could be presented in admissible form at trial; Lanier failed to show otherwise; declarations may be relied upon |
| Existence of a common enterprise linking Lanier and co-defendants | Evidence shows shared offices, employees, payment processing, advertising, and coordinated operations establishing a common enterprise | Lanier denied supervisory/control role over staffing agencies and D.C. firms | Court found ample evidence of an integrated enterprise and Lanier’s central role; no genuine dispute of material fact |
| Individual liability for deceptive acts (including use of the "Economic Stimulus" flyer) | Lanier participated in/devised or had authority to control deceptive practices, so he is individually liable even if he didn’t personally handle each marketing piece | Lanier denied involvement with the flyer and other marketing; disputed factual findings about his personal use/control | Court held personal use of the flyer was immaterial because FTC proved Lanier either directly participated or had authority to control the enterprise; Lanier’s denials did not create a material factual dispute |
Key Cases Cited
- Wright v. Farouk Sys., Inc., 701 F.3d 907 (11th Cir. 2012) (standard for appellate review of evidentiary rulings at summary judgment)
- Rinaldo v. Corbett, 256 F.3d 1276 (11th Cir. 2001) (two-part test for whether a filing functions as a notice of appeal)
- Smith v. Barry, 502 U.S. 244 (U.S. 1992) (liberal construction of Rule 3 requirements)
- Jones v. UPS Ground Freight, 683 F.3d 1283 (11th Cir. 2012) (inadmissible hearsay generally cannot be considered at summary judgment unless reducible to admissible evidence)
- Anderson v. Liberty Lobby, 477 U.S. 242 (U.S. 1986) (summary judgment standards regarding genuine issues of material fact)
- F.T.C. v. IAB Mktg. Assocs., LP, 746 F.3d 1228 (11th Cir. 2014) (standards for individual liability based on participation or control)
- F.T.C. v. Wash. Data Res., 856 F. Supp. 2d 1247 (M.D. Fla. 2012) (factors relevant to finding a common enterprise)