DOTAuthority.com Issues Statement on FTC Settlement
@JamesPLamb
DOTAuthority.com Reaches Agreement with FTC in Civil “Nuisance Case;” Lamb Agrees to FTC’s Settlement Offer, which calls for Lamb Companies to Pay Zero Dollars in Civil Penalties, Disgorgement & Restitution.
--by DOTAuthority.com staff
America will never be destroyed from the outside.
If we falter and lose our freedoms, it will be because we destroyed ourselves.”
–Abraham Lincoln.
Small Business Advocate and American Businessman James Lamb, president and CEO of DOTAuthority.com, Inc., a motor carrier registration and permitting company, announced today that the individual and corporate entities that are the subject of a 2016 lawsuit filed by the Federal Trade Commission (FTC) at the request, according to FTC, of the Federal Motor Carrier Safety Administration (FMCSA), (Federal Trade Commission versus DOTAuthority.com, Inc. et al in UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA; Case No. 0:16-cv-62186-WJZ), which alleged deceptive business practices and a violation of the negative option marketing section of the Restore Online Shopper's Confidence Act (ROSCA), have reached agreement with FTC on settlement of the controversial case.
In his statement, Lamb characterizes the 2016 action as a “nuisance suit” that entails “government overreach at best, a failed political hit job to disgrace me at worst” by the FTC acting in concert with the FMCSA, conspiring with others representing big business interests he has been up against for two decades. Lamb believes FMCSA’s motive in requesting the investigation of what FMCSA has labeled his “aggressive marketing” practices was to retaliate against Lamb by targeting his for-profit businesses because he brought two Federal Lawsuits against the U.S. Department of Transportation in 2013 and 2015 over the broker bond as a non-profit trade group president. Lamb said a former FMCSA bureaucrat admitted in a deposition in January that their investigation into numerous complaints they received against Lamb and his partner companies were actually fraudulent scams that they traced to China, information they apparently didn’t bother to pass on to the FTC. He also admitted there is nothing inherently illegal about aggressive sales tactics; when asked to describe what “aggressive marketing” actually was, he stated that was “something we just made up.”
“I think it is perfectly obvious who was behind this cheap shot,” Lamb said today.
All parties in the DOTAuthority.com case agreed to the settlement late last week, which is pending formal adoption by the court as a stipulated order.
According to court papers, all parties have agreed that the Lamb companies will pay zero dollars in civil penalties, restitution and disgorgement, and all companies may continue to operate their businesses under a stipulated court order.
“I think that says it all,” Lamb said.
Lamb stressed how truckers and motor carrier clients want to use his companies’ services including opting into his “set it and forget it” UCR auto-renewal option and how they continue to flock to websites operated by him and his partner companies because there is real value to those services for small businesses that wish to focus on trucking operations, websites which now bear enhanced, court-prescribed disclaimer language that, according to Lamb, eliminates any and all reasonable allegations of consumer confusion and misunderstanding.
“Within one business day of the 2018 Unified Carrier Registration (“UCR”) program opening on January 5, nearly 900 motor carriers, many of which are repeat clients, filed their UCR through us after being exposed to the new enhanced disclaimer language, evidencing the FTC’s premise that deception and government impersonation was the root cause of our sales was flawed all along,” Lamb said.
Lamb further asserted in his statement:
“In what is clearly a classic mountain-out-of-a-mole-hill, solution-in-search-of-a-problem nuisance case, in which all companies involved continue to deny any and all allegations of wrongdoing… a case in which the FTC once exaggeratedly alleged in writing that the Defendants had ‘taken in an eight-figure $45 million from consumers,’ an amount that deceptively failed to distinguish government filing fees that were collected and paid out to government agencies from true corporate business proceeds, DOTAuthority.com’s partner company Excelsior Enterprises International agreed, after a cost-benefit analysis, to essentially pay the FTC a six-figure amount to just go away,” Lamb said.
Despite the settlement, Lamb maintains that “all of the Defendants in this matter are common carriers exempt from FTC Investigation as a matter of law and that the parties cannot stipulate to subject matter jurisdiction… either the court has jurisdiction or it does not,” Lamb said.
Lamb Defends Carriers’ Freedom of Choice, Fights for Commercial Free Speech
Lamb believes there are socialist overtones inherent within FTC and that FTC and other government agencies like the New York State Department of Motor Vehicles, an agency Lamb is currently suing for violating his First Amendment right to Commercial Free Speech, have a problem, not with deception, as they purport to the public, but with the private sector inserting itself in between citizens and their government to offer services that assist citizens and small businesses in interfacing with government. Socialism seeks for the government to control all means of production.
“The truth is they have a problem with entrepreneurial-minded Capitalists building businesses that service motor carriers and they can’t understand why --no matter what changes they try to bully us as private businesses into making—the public still chooses in significant numbers to outsource their government registration obligations to us as a third party that offers superior, expert knowledge and service rather than deal with droll government agencies directly. I think anyone who was ever stood on line at the DMV office for hours can appreciate our private sector, convenience-oriented alternative,” Lamb said.
Businesses like DOTAuthority.com offer motor carriers a choice and the FTC simply could not understand why people would chose to pay more money and hire a company to do what they could otherwise do themselves. But much like how Americans hire accountants to prepare and file their tax returns and painters to paint their homes every day, service-based businesses grounded in convenience remain in high demand.
Lamb added:
“Their goal was not to protect the public from deception as they speciously represented, but to engage in character assassination to take down an outspoken trade group president standing up for Small Business and to corruptly put my legitimate business out of business in retaliation. In the end, it is clear they failed miserably.”
Perhaps what is most disturbing about the DOTAuthority.com case beyond the use of the governmental process against Lamb as a weapon to inflict punishment for daring to challenge the government, is how these government bureaucrats are not above stretching the facts to fit their agenda. That is, when they don’t like something that is perfectly legal, their only resort is to throw out the dangerously elastic and elusive construct phrase “deceptive business practices” to target their prey.
Case Background
According to court papers, the FTC alleged Lamb and his co-Defendants had violated the FTC Act by engaging in alleged “deceptive business practices “and the Restore Online Shopper's Confidence Act (ROSCA) by allegedly engaging in illegal negative option marketing, essentially adopting the position that Lamb’s disclaimers such as the pre-suit disclaimer on his homepage, which stated…
“DOTAuthority.com is a consulting firm. It is not the Department of Transportation.”
…was not adequate to protect the public under their subjective “net impressions” theory.
The FTC sandbagged Lamb while he was out of the country with an ex-parte temporary restraining order (TRO) in September 2016 that instantly froze his personal and business assets and took over his businesses through a court-imposed receiver without a hearing. Score one for FTC.
However, Lamb has suggested this was an abuse of power by the agency, a power that should be reserved for cases involving organized crime or terrorism, not cases that essentially entail the mere adequacy of disclaimers. And ten days later, after a hearing on that TRO, at which, Lamb testified, the Judge immediately removed the receiver and unfroze Lamb’s assets, concluding the Draconian measures imposed had not actually been appropriate in this case as the FTC originally requested. Score one for Lamb.
Lamb has argued these past 18 months both on procedural and substantive grounds. A former state consumer complaint investigator himself, Lamb believes an objective ”reasonable consumer” would not be deceived by any of his websites or promotional materials because his marketing program included good faith disclaimers and there were actually three level of protections in place in his solicitations, on his websites, and on his shopping cart order forms, to protect his clients from getting the wrong idea from his catchy brand name “DOTAuthority.com.” And while his automatic renewal program may have constituted “negative option marketing,” Lamb says, it was not “illegal” negative option marketing because he satisfied all three subparts of the statute making his marketing legal. That statutes says:
§8403. Negative option marketing on the Internet
It shall be unlawful for any person to charge or attempt to charge any consumer for any goods or services sold in a transaction effected on the Internet through a negative option feature (as defined in the Federal Trade Commission's Telemarketing Sales Rule in part 310 of title 16, Code of Federal Regulations),
unless
the person—
(1) provides text that clearly and conspicuously discloses all material terms of the transaction before obtaining the consumer's billing information;
(2) obtains a consumer's express informed consent before charging the consumer's credit card, debit card, bank account, or other financial account for products or services through such transaction; and
(3) provides simple mechanisms for a consumer to stop recurring charges from being placed on the consumer's credit card, debit card, bank account, or other financial account (emphasis added).
“It appears the FTC missed the word ‘unless’ in the statute,” Lamb said.
However, unlike most transportation professionals familiar with industry jargon, such as Lamb’s double entendre reference to “authority” in his company name-- that is, that he is the authority on the DOT due to his past experience as a state motor carrier regulator, and that he helps truckers obtain operating “authority,” otherwise known as business licenses from the DOT, this lingo flew right over the FTC’s head since they lack technical trucking industry knowledge and expertise. But Lamb’s expert witness was more than happy to explain the facts of regulatory compliance life to FTC and their “expert” witness in front of the Court in a detailed report rebutting their suggestion that a website offering regulatory compliance services, one that merely warns business owners of the possible ramifications of failing to comply with Federal regulations, should somehow employ the same sales and marketing tactics as a website selling shoes to consumer public. And what Lamb properly identifies as “warnings,” FTC mislabeled as “threats” in their complaint to the Court to induce the judge to take control of the businesses away from Lamb.
So what is “deceptive business practices” exactly? Well, according to the FTC and their expert witness, it is using the colors red, white and blue on your website. It is using a map that is descriptive of those states that participate in a government program because a government website also uses a map. And it is daring to put your good faith disclaimer in the
second
sentence on your website after you describe what the site is about because the FTC can’t confirm that members of the public will actually
read
the second sentence. As if truck drivers and business owners were somehow illiterate. So, in 2018 America, “deception” is not based on what the business does or does not do, it is based on what they believe the consumer might fail to do. If this does not scare you, it should. Welcome to the nanny state.
Ask the FTC to define exactly what was allegedly deceptive about Lamb’s site, however, like Lamb did, and all you will hear back is crickets. All they can evasively offer in return is to say what matters is “net impressions.” That’s their way of saying even the enhanced, court-prescribed disclaimer like the bold, red font disclosure that clearly and conspicuously appears at the top of Lamb’s homepage…
“
DOTAuthority.com is a private, third-party provider offering services for a fee. This is a commercial solicitation and advertisement. DOTAuthority.com is NOT affiliated with any government authority.”
… is not good enough to prevent deception if your color scheme includes red and blue colors on a white background.
But the courts have already said ‘no dice’ to that over-the-top mentality, and have declared you cannot rest on “Well, I don’t know how to define deception, but I know it when I see it.”
Facing an imminent precedent-setting dismissal by the Court for lack of subject matter jurisdiction, one which could have upset the agency’s entire enforcement paradigm by making multiple on-line businesses covered by an exemption in the FTC Act, and clearly would have led to Congressional and public scrutiny over the misuse of taxpayer money to investigate a matter beyond the scope of their lawful jurisdiction (see Lamb’s article on the Common Carrier Exception
http://www.smalltransportation.org/files/125787448.pdf
) , FTC’s Commissioners agreed to the settlement proposed by their own attorneys to bring the case to a conclusion. That agreement called for Lamb personally, DOTAuthority.com, Inc., and JPL Enterprises International, Inc. (“the Lamb Companies”) to pay
absolutely nothing
but their own legal expenses to defend against what Lamb contends was “a frivolous case from the outset.”
And while Lamb’s co-Defendants agreed to pay FTC “an amount in the thousands, as compared to that preposterous $45 million in damages alluded to by the FTC during the proceeding, an amount which, in reality, primarily consisted of government filing fees collected by Lamb and other co-defendants and duly remitted to government agencies on carriers’ behalf,” as a “cost of doing business after a cost-benefit analysis to make the rogue agency go away and stop the bleeding on mounting legal expenses,” according to Lamb, Lamb agreed to the settlement to end the case rather than continue to wait for the court to rule on his motion to dismiss.
“If I’m worth $45 million, I want to know where the FTC is hiding my yacht,” Lamb jested.
Lamb suggests he was unusually targeted after just 3 complaints were filed with FTC by his and his co-defendants’ clients against their companies over a four-and-a-half-year period, less than one per year. Lamb believes the FTC essentially created their “net impressions” theory to overcome his obvious good faith disclosure efforts to make it clear his company is a third party service provider and to compensate for the failure of those three complainants --out of the companies’ 235,000 clients for the period under investigation-- to read the terms they had accepted at checkout while ordering online regulatory compliance services. By contrast, FTC receives $3.5 million complaints per year, 350,000 of which entail claims of government impersonation, making those magic three complaints just three out of 15,750,000 for the period in question. If you’re thinking ‘wow, who did Lamb piss off…’ you’re on the right track as the case reeks of political payback. Lamb, in turn, has asked Congressional oversight committees to investigate the FTC’s handling of this matter.
Lamb’s attorneys argued that the FTC’s attempts to regulate the content of Lamb’s advertisements during the suit regarding his Unified Carrier Registration and Biennial Report filing services violates commercial free speech because their censorship of his advertising constitutes unreasonable and unlawful overreach in the area of editorial control and is “more extensive than necessary to serve the government’s interests,” contrary to the Supreme Court’s 1980 ruling in the Central Hudson case (
Central Hudson Gas & Electric Corp. v. Public Service Commission of New York.)
See:
http://itlaw.wikia.com/wiki/%22Central_Hudson%22_teste
Former FTC Attorney Representing Lamb’s Partner Companies Suggests the FTC Simply Got this One Wrong
Lamb said he believed the settlement was influenced, in part, by a member of his partner company’s legal team, Former FTC Attorney Leonard L. Gordon, now with the prestigious Venable law firm, who, in the last days of the proceeding as the matter was headed for trial, wrote to his FTC former colleague adversaries who for months stuck to their guns alleging Lamb’s business was a fraudulent scam:
"...it is important to recognize that all of the defendants operate legitimate businesses. The court has now accepted this, and it seems that you have as well."
Despite the allegations in their original complaint and their more recent motion for summary judgment filed in January, following Gordon’s assertion, an FTC representative supervising the case agreed during an 11
th
hour deposition that the facts in the DOTAuthority case simply did not rise to the level of their usual fraud or scam case, and that their normal cookie-cutter permanent injunction template should not apply in this instance without modification, Lamb added.
During the 18-month-long battle, Lamb struck back by filing for leave to file a countersuit against FTC for engaging in defamatory conduct because the FTC issued libelous press releases and blog posts suggesting Lamb was a government imposter operating a scam business before proving their absurd claims in court.
DOTAuthority.com Weathers the Storm, Remains Operational.
DOTAuthority.com, which holds a duly issued Federal Service mark registration to use the name in American commerce, remains fully operational in the aftermath of the suit. The company assists start-up companies in obtaining USDOT Numbers, state and interstate operating authority, and various miscellaneous registrations such as Unified Carrier Registration.
Although FTC accused DOTAuthority.com of representing one bottom line fee that included its service fee and the state fees as the actual UCR state fee, in reality, DOTAuthority.com has had the actual states fees published separately on its UCR webpage since the program’s inception in 2007. Lamb also produced a 2015 business-to-business podcast on the UCR program prior to the FTC lawsuit under his brand name “The Authority,” which clearly identified himself as an industry regulatory expert, disclosed the actual state UCR fees, and presented carriers with their filing options including filing through his privately-operated third-party companies and websites:
“While we are left with a permanent injunction that prohibits us from engaging in conduct that we never engaged in, and, quite frankly, never intended to engage in, the parties simply do not have the power to stipulate that the court has jurisdiction. Without a clear ruling on our motion to dismiss, which challenged subject matter jurisdiction, the legality of the permanent injunction will remain questionable. Nonetheless, we are happy to see the FTC decided it was finally time to move on and chase the real bad guys and we intend to furnish them with evidence of real fraud and challenge them to pursue those characters with just as much zeal as they targeted us.” Lamb said.
Indeed, as a result of the settlement, Lamb’s businesses remain intact, having suffered only the cost of defending himself against an overbearing Big Brother. While most businesses do not survive an FTC attack and are taken down at the onset when a receiver is appointed, Lamb indicated his businesses are back to normal and he himself can now focus on his true passion: protecting and promoting the interests of the little guys in the industry as President of the Small Business in Transportation in Coalition (“SBTC”).
Lamb heads SBTC Industry Watchdog Trade Group
Acting as a watchdog group ever on the prowl looking for evidence of government corruption, abuse, fraud, waste, and misconduct, the SBTC, now operating through the domain www.Truckers.com, is currently suing the Unified Carrier Registration Board of Directors for violating the Federal Sunshine Act, an open meetings law by holding multiple meetings not properly noticed --or noticed at all-- in the Federal Register as required by law. See:
https://www.linkedin.com/pulse/small-business-transportation-coalition-sbtc-federal-judge-james-lamb/
A few years back in its first year, Lamb’s SBTC successfully defended a trucker falsely accused of the criminal “obstructing government administration” when he refused to be woken up from his sleeper berth to show a law enforcement officer his log book. Because this was the second incident between that officer and the driver in just a few weeks, Lamb filed a pattern and practices complaint against the Georgia law enforcement agency with the US Department of Justice, after which, the agency and prosecutors dropped the bogus charges.
Lamb had issued a cease and desist letter back in 2011 to the UCR Board demanding they stop illegally collecting fees some five years before the 2016 FTC suit, a demand that went ignored until SBTC sued Indiana Department of Revenue. At least one member of the Board subsequently made apparently malicious misrepresentations to the FTC, that, in turn, passed the allegation on to the Court in the FTC’s complaint, alleging that Lamb’s company was not in fact “duly registered” with the National UCR system as Lamb represented in his solicitation and that there was no vetting process in place to register permit companies. That statement was later impeached during a deposition and the record was corrected to reflect that Lamb’s company was indeed one of over 100 permit companies registered with the UCR program and that companies were in fact vetted for such registration by the Indiana Department of Revenue acting as agent of the UCR Board on the basis of whether or not the permit companies file more than 200 UCR registrations, on behalf of client motor carriers, per year.
Lamb is also the leader of the SBTC’s www.TruckerLivesMatter.com movement, which seeks legislation to allow truckers to defend themselves on the road by carrying firearms in their truck. Lamb points to how over 500 Americans are murdered on the job working in interstate transportation according to US Department of Labor statistics.
“This is what I want to talk to government about,” Lamb says, “not how businesses are to blame when their clients fail to read the terms and conditions of their service offerings that the clients represent they have read. Neither I nor the 12,000+-member SBTC will be defined by this FTC nonsense.”
Lamb has also filed an exemption application with FMCSA to make independent truckers and small carriers with fewer than 50 employees exempt from using Electronic Logging Devices (“ELD”), which is scheduled for publication by FMCSA shortly.
And he is zeroing his sites on FMCSA for failing to report to Congress as directed on the appropriateness of the $75,000 intermediary bond passed by Congress in MAP-21 in 2012 and neglecting to tell Congress how 9,800 small business brokers and forwarders were put out of business in December 2013 upon the sudden increase of the bond from $10,000 to $75,000.
While Lamb would like to conclude the war with the FTC is now over, when asked if he felt the FTC might pop up again, he said: “I wouldn’t put it passed them. I’ve been in the spotlight for nearly a decade and it was only a matter of time before some corrupt, disgruntled, or jealous government bureaucrat tried to take a swing at me. If they do, rest assured… my legal team and I will be ready to deal with them.”
SOURCE:
Small Business in Transportation Coalition
1775 I. (Eye) Street, NW, Suite 1150
Washington, DC, US 20006
