Federal Trade Commission v. Randall L. Leshin
2013 U.S. App. LEXIS 11232
| 11th Cir. | 2013Background
- FTC sued Randall Leshin and his co-appellants for deceptive marketing in a debt-consolidation business, leading to civil contempt in 2009 and an order to disgorge $594,987.90.
- The district court required disgorgement of the business’s gross receipts, not just profits, as the compensatory civil contempt remedy.
- The court expressly allowed the FTC to convert any unpaid balance of the disgorgement order into a money judgment after enforcement proceedings.
- Leshin I affirmed contempt and the disgorgement method, but held the question of converting to a money judgment was not ripe at that time.
- After Leshin failed to disgorge about $590k, a second coercive contempt finding required $92,671 to be paid; that amount was purged by payment, while the remaining disgorgement balance persisted.
- The FTC moved to convert the unpaid remainder of roughly $500k into a money judgment; the district court granted, resulting in a money judgment of $502,316.90.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May the district court convert unpaid disgorgement to a money judgment? | Leshin contends the district court cannot convert an equitable remedy to a legal one. | Leshin argues conversion is beyond the court’s civil-contempt powers or conflicts with remedy structure. | Yes; district court retains broad discretion to convert, so long as full remedial relief is achieved. |
| Does election of remedies bar conversion to a money judgment? | Leshin says converting after obtaining disgorgement violates election of remedies. | Leshin asserts two remedies are inconsistent and cannot both be pursued. | No; remedies here are not inconsistent and do not allow double recovery. |
| Were due process or Seventh Amendment jury-rights violated by the conversion? | Leshin claims conversion amounts to a new liability or punitive, requiring a jury trial. | Leshin already received due process (notice and opportunity to be heard); no jury is required for civil contempt. | No; due process was satisfied; civil contempt does not require a jury trial. |
Key Cases Cited
- Leshin I, FTC v. Leshin, 618 F.3d 1221 (11th Cir. 2010) (affirmed civil contempt and disgorgement of gross receipts; discussed conversion not ripe)
- De Beers Consol. Mines, Ltd. v. United States, 325 U.S. 212 (U.S. 1945) (discussed potential for money judgments for contempt as satisfaction of a remedy)
- In re Prof’l Air Traffic Controllers Org., 699 F.2d 539 (D.C. Cir. 1983) (described registering civil contempt money judgments)
- McComb v. Jacksonville Paper Co., 336 U.S. 187 (U.S. 1949) (full remedial relief standard in civil contempt)
- Millsap v. McDonnell Douglas Corp., 368 F.3d 1246 (10th Cir. 2004) (equitable relief in lieu of impracticable remedy)
- Local 28 of Sheet Metal Workers’ Int’l Ass’n v. EEOC, 478 U.S. 421 (U.S. 1986) (measures of compensatory and coercive sanctions in civil contempt)
- McGregor v. Chierico, 206 F.3d 1378 (11th Cir. 2000) (abuse-of-discretion standard for remedial relief in contempt)
- AT&T Broadband v. Tech Commc’ns, Inc., 381 F.3d 1309 (11th Cir. 2004) (expansive equitable powers in public-interest contexts)
- SEC v. Banner Fund Int’l, 211 F.3d 602 (D.C. Cir. 2000) (disgorgement establishes personal liability irrespective of asset dissipation)
- Proudfoot Consulting Co. v. Gordon, 576 F.3d 1223 (11th Cir. 2009) (dual remedies context; not necessarily exclusive when needed)