545 F. App'x 825
11th Cir.2013Background
- FTC sued Lalonde and corporate defendants in 2009 for CROA, TSR, and FTC Act violations across six counts.
- A stipulated preliminary injunction froze assets, appointed a receiver, and allowed expedited discovery; Lalonde later was criminally convicted.
- Magistrate granted summary judgment against Lalonde on all six counts and issued permanent injunctions and disgorgement/restitution.
- Lalonde sought asset release, IFP status, and counsel; the court denied these requests and various discovery extensions were contested.
- On appeal Lalonde contends asset freezes, lack of counsel, discovery rulings, and the breadth of injunctive/monetary relief were errors.
- The panel affirms, upholding liability of Lalonde and the corporate defendants and the relief awarded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Asset freeze on non-parties abuse? | Lalonde lacked standing; asset freeze improper for non-parties. | District court had authority to freeze assets to ensure disgorgement. | No abuse; authority proper and consentmooted? relief denied |
| Appointment of counsel/IFP error? | Lalonde unable to litigate effectively due to incarceration; counsel needed. | No constitutional right to counsel in civil cases; no abuse of discretion. | Discretion exercised; no abuse; counsel not required |
| Discovery/scheduling rulings proper? | Incarceration and deception hindered timely discovery; urgent extensions warranted. | Court granted extensions where warranted; no abuse of discretion. | Rulings within discretion; no reversible error |
| Summary judgment on CROA/TSR/FTC Act? | Insufficient evidence Lalonde directly participated; policy-level involvement disputed. | Evidence showed Lalonde controlled and knew of deceptive practices; direct participation shown. | Summary judgment affirmed; individual and corporate liabilities established |
| Injunctive and monetary relief proper? | Relief overly broad and double-dip from criminal restitution. | Relief limited to net revenue; restitution/disgorgement appropriate under §13(b). | Injunction and monetary relief affirmed; proper scope and calculations |
Key Cases Cited
- FTC v. U.S. Oil & Gas Corp., 748 F.2d 1431 (11th Cir. 1984) (inherent power to issue ancillary relief incl. asset freezes)
- CFTC v. Levy, 541 F.3d 1102 (11th Cir. 2008) (abuse of discretion standard for asset freezes and Rule 60(b))
- Mitsubishi Int’l Corp. v. Cardinal Textile Sales, Inc., 14 F.3d 1507 (11th Cir. 1994) (equitable asset freezing limits; cannot reach unrelated assets)
- Gem Merch. Corp., 87 F.3d 466 (11th Cir. 1996) (section 13(b) injunctive authority and disgorgement mechanics)
- Noble Metals Int’l, Inc., 67 F.3d 766 (9th Cir. 1995) (attorney fees out of frozen assets permissible; no automatic right to defense funds)
- Wilson v. Blankenship, 163 F.3d 1284 (11th Cir. 1998) (prisoner access to courts requires actual injury; backdrop for access discussions)
- Sosa v. Airprint Sys., Inc., 133 F.3d 1417 (11th Cir. 1998) (good cause standard for extending discovery deadlines)