Federal Trade Commission v. Primary Group, Inc., 713 F. App'x 805

Background

The FTC sued Gail Daniels and her company, The Primary Group, alleging violations of the Federal Trade Commission Act and the Fair Debt Collection Practices Act (FDCPA). The district court granted the FTC summary judgment and ordered disgorgement of $980,000.
Daniels, proceeding pro se, challenged the summary judgment, denial of a stay for health reasons, and the disgorgement calculation on appeal. She also raised several other claims the court found meritless or unreviewable on appeal.
The FTC presented evidence that Primary Group used deceptive scripts, sent texts impersonating process servers, and failed to identify callers as debt collectors; Daniels admitted operational control and monitoring of staff and facilities.
Daniels asserted she lacked knowledge of illegal practices, alleged some FTC witnesses lied, and claimed refunds reduced unjust gains, but provided little documentary support.
The district court denied an indefinite stay despite Daniels’ claims of Parkinson-like illness, vision problems, and memory loss because she failed to submit detailed, time‑bound medical evidence and had a history of noncompliance.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether summary judgment was proper on FTC Act and FDCPA claims	Daniels: genuine dispute exists about her knowledge of illegal debt-collection practices	FTC: evidence shows corporate violations and Daniels had actual or deliberately avoidant knowledge and control	Affirmed: summary judgment proper; evidence established primary violations and owner knowledge/avoidance standard applies
Standard for individual liability for corporate violations	Daniels: she lacked actual knowledge	FTC: owner liability includes actual knowledge, reckless indifference, or awareness of high probability plus deliberate ignorance	Court adopted standard (actual knowledge, reckless indifference, or deliberate ignorance) and found evidence met it
Whether district court abused discretion by refusing to stay proceedings for Daniels’ health	Daniels: medical condition prevented participation; requested stay	FTC: proceeding should continue; Daniels failed to provide detailed medical evidence or timelines	Affirmed: no abuse of discretion; court reasonably required specific documentation and could not indefinitely stay proceedings
Whether disgorgement amount ($980,000) was erroneous	Daniels: disgorgement should be net profits or reduced by refunds; FTC didn’t show consumers paid Primary Group	FTC: gross receipts supported disgorgement and Daniels offered no evidence quantifying refunds	Affirmed: disgorgement based on gross receipts; denial of offset not clear error because Daniels supplied no proof of refunds

Key Cases Cited

FTC v. Gem Merch. Corp., 87 F.3d 466 (11th Cir. 1996) (corporate violations are a prerequisite to individual liability)
Dolphin LLC v. WCI Cmtys., Inc., 715 F.3d 1243 (11th Cir. 2013) (summary judgment review standard)
FTC v. IAM Mktg. Assocs., 746 F.3d 1228 (11th Cir. 2014) (individual liability requires knowledge and participation or control)
FTC v. Ross, 743 F.3d 886 (4th Cir. 2014) (knowledge may be actual, recklessly indifferent, or deliberate ignorance)
FTC v. World Media Brokers, 415 F.3d 758 (7th Cir. 2005) (adopting similar standard for knowledge/deliberate ignorance)
FTC v. Wash. Data Res., Inc., 740 F.3d 1323 (11th Cir. 2013) (disgorgement based on net revenue; refunds reduce gross receipts)
Barfield v. Brierton, 883 F.2d 923 (11th Cir. 1989) (abuse-of-discretion review for district court stay decisions)
Hartford Cas. Ins. Co. v. Crum & Forster Specialty Ins. Co., 828 F.3d 1331 (11th Cir. 2016) (definition of abuse of discretion)
AT&T Broadband v. Tech Commc’ns, Inc., 381 F.3d 1309 (11th Cir. 2014) (generally nonappealable nature of TROs)
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (relationship between FDCPA violations and FTC Act enforcement)