11th Cir. Says What Must Be Proven to Impose Vicarious Liability on a Debt Collector’s Corporate Owner

We have not yet decided what suffices to show that a corporation’s owners, officers, or employees had knowledge of its violations of the FTC Act or FDCPA. But the Fourth and Seventh Circuits have. They have concluded that knowledge “may be established by showing that the individual had actual knowledge of the deceptive conduct, was recklessly indifferent to its deceptiveness, or had an awareness of a high probability of deceptiveness and intentionally avoided learning of the truth.” FTC v. Ross, 743 F.3d 886, 892 (4th Cir. 2014); accord FTC v. World Media Brokers, 415 F.3d 758, 764 (7th Cir. 2005). We believe this standard correctly describes the breadth of individual liability under the FTC Act and the FDCPA.  The evidence the FTC pointed to in its motion for summary judgment was sufficient, in the absence of any response from Daniels, to show that it was entitled to judgment as a matter of law. Daniels admitted that she kept herself informed of the day to day operations of Primary Group, that she had the ability to listen to recordings of phone calls made by Primary Group employees, and that she had cameras set up to monitor every work station at the corporation’s facilities. She also acknowledged receiving several Better Business Bureau complaints, which she did not investigate even though she had been forced to fire significant portions of her staff in the past due to their unethical behavior. Even in light of Daniels’ protestations that she was not aware of the content of the scripts, the texting, or any other illegal behavior, the evidence in the record is enough to support a grant of summary judgment. If Daniels did not know of Primary Group’s deceptive conduct, it is only because she intentionally avoided discovering it despite knowing that there was “a high probability” that her corporation was engaging in unlawful debt collection practices. See Ross, 743 F.3d at 892; World Media Brokers, 415 F.3d at 764.