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The overreach of Regulatory Power- How far can it go?


One of the biggest concerns for most Americans is the size and power of government,specifically the “regulatory arm” of the Federal bureaucracy. Truckers know this all too well. Many times, in the name of “safety,” the Federal Motor Carrier Safety Administration (“FMCSA”) broadens their reach by promulgating new rules and regulations as we, the members of the industry, stand by scratching our heads, knowing that these same regulations, which are supposedly enacted to increase safety, often actually create unsafe road conditions when implemented, as a matter of “unintended consequences.” (Example: Speed Limiters).

The following write up is in response to the  Oct 17th Press Release that went out by the Federal Trade Commission.
FTC Charges Operators of Scheme That Used Fake Government Affiliation to Sell Commercial Trucking Registration Services

The overreach of Regulatory Power- How far can it go?

Federal Trade commission

Imagine this: you’re running your online truck permit business, and all of a sudden you have all your assets frozen without notice or due process, not able to access any funds, and control of your business is wisked out of your hands, and placed into the hands of a court-appointed lawyer, and you have no idea what’s happened!

What would you do?

Recently, the United States Federal Trade Commission (“FTC”) convinced a Federal Judge into believing that a 15 year old small business truck permit company and its sister company, were allegedly engaged in deceptive business practices and that there was an emergency situation that required such extreme measures. FTC was granted, ex-parte, a temporary restraining order (“TRO”) by the United States District Court for the Southern District of Florida last month. That means that government lawyers secretly went to a Federal judge, told only their side of the story, convinced His Honor there was a bona fide emergency situation that required him to immediately act without giving the other side a chance to know about the request.  The judge believed what he was told and he then immediately froze all of the owners’ personal and business assets and allowed the government to seize the businesses—all without a hearing!

Unbeknownst to the owners of these companies, including James Lamb. We have had Mr Lamb on our show numerous times (James has– through his volunteer efforts as chairman of his “Small Business in Trucking Coalition”– promoted safe truck parking for drivers, helped a trucker beat bogus ‘obstruction of justice’ charges when they woke the driver up during DOT mandated rest time, promoted truckers’ right to carry interstate with pro-gun legislation that is about to be introduced in the US Senate, and has generally promoted and protected the rights of small businesses against big business encroachment).
All of their personal and business assets, including bank accounts were frozen for 2 weeks until the September 29th hearing in front of the same Federal Judge. James was left with no means to feed his one year old baby daughter, other than the goodwill of friends and relatives and his cash on hand.
That’s when the judge learned the truth and then things drastically changed

(although the FTC is not telling that part of the story) …

After hearing the evidence, including James’ personal testimony on September 29th, the same judge reversed his prior decision and unfroze James’ assets and returned control of the businesses back over to James and his partner. While the judge did issue a preliminary injunction that will remain in place from now until the case goes forward for trial, the judge suggested the businesses should continue to be allowed to operate and he simply strengthened James’ existing disclaimers in the interest of clarity. It would appear the FTC is now trying to kill the businesses by declaring a public relations war on the businesses through the media in response. And that plan may very well be working.

Reading between the lines, what this basically means is: whereas the FTC got the judge to originally take over the businesses and freeze all assets immediately, as if James were part of some ISIS terrorist cell, the judge after hearing determined the government deceived him in its presentation of the “facts” before the hearing and determined that justice required for him to undo these harsh, intrusive actions… and that the alleged “emergency” purported by the government never actually existed in the first place.

Given the United States District Court for the Southern District of Florida promptly and fully lifted this previously-imposed asset freeze and terminated its previously imposed receivership, the ruling calls into question the propriety of the overbroad and aggressive tactics of the FTC and their motives for blindsiding the businesses instead of following the normal civil process of simply talking to the business owners first.. and are two of the websites that are used by the permit companies involved in the case to allegedly engage in deceptive practices. These are bona fide companies that have helped motor carriers comply with their regulatory filing obligations, apply for operating authority, and secure other related truck permits much like OOIDA does. And they have done so for fifteen years. There are scores– if not hundreds– of such companies across America servicing this industry. In fact, they are an entire industry within the industry in and of themselves. They act as third-party service providers that educate, consult with, and train small business carriers and brokers on federal regulations, and their compliance obligations; they offer services so owner-operators can outsource this part of their business to the experts so they can focus on the business of trucking.And these permit services declare themselves as such on their websites and marketing materials.

In fact, James is a former New York Department of Transportation Investigator who is admitted to practice before the US Surface Transportation Board and the Federal Maritime Commission, so he clearly knows his stuff and how to keep truckers and carriers out of trouble. Thus, his brand “DOT Authority” which offers a double entendre, playing on the term operating authority as he clearly is an authority on the DOT.

The FTC allegations of deceptive online advertising include allegations that James and his partner try to pretend to be the government (i.e. FTC alleges they are “government imposters”) and that their websites are made to look like government websites. Yet the look and feel of the homepage is anything but a duplication of a government site; that is, it offers Youtube videos about getting authority and freight broker training. And it even specifically states: ” is a consulting firm. It is not the Department of Transportation.”

And whereas the FTC would have us believe that these companies somehow “threaten” carriers, these companies simply warn carriers about the real civil penalties that they may face from the government if they fail to comply with their obligations. They merely offer a convenient way for carriers to meet their requirements to avoid getting fined (kind of like getting milk from the convenience store instead of making the trek to the grocery store), including a way for their annual permits to be renewed automatically so that they don’t ever forget to comply and then get reminded on January 2nd with a Happy New Year “gift” in the form of a $1,000 or more ticket by a state trooper or DOT agent.

What does the FTC do?

The FTC is charged with protecting consumers by stopping unfair, deceptive or fraudulent practices in the marketplace. They conduct investigations, sue companies and people that violate the law, develop rules to ensure a vibrant marketplace, and educate consumers and businesses about their rights and responsibilities. But sometimes, they get it wrong and target the wrong folks as in this case…

What are the dangers of over reach?

This case should scare folks. Can the Federal Government just “allege” activity without real proof?
Are we following a new model of GUILTY until proven INNOCENT?

We note this was a complaint filed by a federal government agency, the FTC, not a class action by individuals as some others in trucking media have suggested.

The FTC states on their website: “NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.”

Question: But should ‘reason to believe’ be transformed into a government right to destroy a business and the lives of the business owners before the accused even steps foot into court and has a chance to defend themselves?

We note this is not a criminal case, but rather a civil case, although it could be argued that criminal conduct has been alluded to in their press release.

According to James’ lawyers’ statement, the companies being accused operate several permit related businesses that all help interstate commercial carriers remain compliant and navigate through the complex and ever changing state and federal regulations. Case in point: the new “Unified Registration System” that allows FMCSA to now deactivate carriers’ USDOT Numbers if they fail to file biennial reports…

James has attempted to get that message out to carriers and has offered to help them comply. His company prepares and files these reports for carriers (much like a taxpayer has an accountant prepare his or her taxes) or enables carriers to do it themselves through an automated service at a lesser cost.

The FTC has apparently taken overzealous issue with this service as well, suggesting carriers should not be asked to pay for something they can do themselves.

REALLY?  How dare you hire a painter when you can paint your house yourself!

Perhaps the FTC needs to read the First Amendment as we are free to talk with, associate with, and contract with anyone we wish in America. Big Brother does not always know best.

These permit company owners post on their websites obvious disclaimers, stating they are a 3rd party consulting firm and are not affiliated with any government authority.
Despite admitting to having seen these disclaimers, the FTC still filed charges alleging the owners were engaging in deceptive online advertising practices by misleading consumers into believing that their permit companies were affiliated with a governmental entity. It just doesn’t make  sense. Either the disclaimers were there, or they were not there. And they clearly were there.

In fact, you can visit these websites yourself and see the disclaimers boldly written. There are no fraudulent Federal logos on the websites to confuse or mislead people. I myself have been on the websites and never thought they were government websites, but rather what they obviously are, 3rd party filing companies. There are many small companies who are willing to pay 3rd party consultants to file all their paperwork just as some small businesses have accountants and bookkeeping partners handle their paperwork..

The part of this that really scares me, though, is that all the FTC needed is to have their “reason to believe”…. even though the disclaimers are obviously stated on the permit company owners’ websites.

I have no doubt the permit companies will win this civil case in the Federal Courts and justice will ultimately prevail. The sad part, however, is that in a case like this, the mere allegation of wrongdoing and the issuance of press releases before trial is often enough to destroy the reputations of the businesses and force them to close even before the trial.

So, if this makes you angry and fear the overreaching abuse of Federal authority more than ever, well, then you are right to be afraid. You have a right to be angry and afraid.
Comment on the this article and share your voice!!

Read more MONDAY Oct 24th Press Release “Diluted Preliminary Injunction Order Repels Aggressive Tactics Used by FTC Against Online Advertiser”

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By: Allen Smith

Allen Smith is a 37 year veteran who started at an early age in a household goods family moving business. He began driving straight trucks in 1977 and moved to the big rigs in 1982. His experience within the industry includes; owner operator, company driver, operations manager, and owner of a long distance HHG moving business, taking many of the long haul moves himself when needed. Allen Smith, a truck driver advocate who is driven by the desire to help others succeed within an industry where injustice, unrewarded sacrifice, and lack of respect and recognition exists. Allen and his wife Donna are hosts of Truth About Trucking ”Live” on Blog Talk Radio. Other websites include AskTheTrucker, TruckingSocialMedia, NorthAmericanTruckingALerts, TruthAboutTrucking, and many Social Media websites. In 2011 Allen and Donna hosted the first Truck Driver Social Media Convention, designed to create unity and solutions for the trucking industry. This is now being extended through the North American Trucking Alerts network as those within the industry join forces for the betterment of the industry. Allen strongly supports other industry advocates who are also stepping up to the plate to help those who share honesty, guidance and direction. He believes that all those involved in trucking need to be accountable for their part within the industry, including drivers, carriers, brokers, shippers, receivers, etc… The list of supporters and likeminded people grow daily, networking together and sharing thoughts and ideas for the betterment of trucking. He has coined the popular phrase "Raising the standards of the trucking industry"

View all posts by Allen Smith →

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8 Responses to The overreach of Regulatory Power- How far can it go?. - Post a Comment

  1. Greg McClain

    I don’t know James Lamb, even though I have contacted him a few times. but I find this action by the feds alarming. If anything the FTC should have had to bring this situation into a court room after notifying the parties involved. Take this move by the feds as a notice that they will back door the American trucking industry in a matter they desire, so, you darn better know your rights while you still have some. I have not seen the documents myself thus, like are legal system is suppose to work, I will not convict this person or the companies involved until such. I would suggest the feds do the same thing.

  2. Allen Smith

    Here is the recent Press release by DOTAuthority


    Contact: Andrew Gordon, Esq.
    (847) 580-1279

    Diluted Preliminary Injunction Order
    Repels Aggressive Tactics Used by FTC
    Against Online Advertiser

    October 24, 2016 – Fort Lauderdale, FL – Corporate Defendants, Inc.,, Inc., Excelsior Enterprises International, Inc., and JPL Enterprises International, Inc. and individual defendants James P. Lamb, and Uliana Bogash (collectively, the “Defendants”) announced today that they have stood their ground against Federal Trade Commission (“FTC”) allegations of deceptive online advertising by effectively eliminating the most restrictive aspects of a previously-issued ex parte Temporary Restraining Order. After an evidentiary hearing in the case (CIVIL ACTION NUMBER: 0:16-cv-62186-WJZ), the United States District Court for the Southern District of Florida promptly and fully lifted a previously-imposed asset freeze and terminated its previously imposed receivership. The ruling called into question the propriety of the overbroad and aggressive tactics employed by the FTC in this case, which the Court ultimately deemed unwarranted.

    Although the litigation is still ongoing, the Court’s September 29, 2016 Order is particularly noteworthy due to the reversal of the FTC’s requested ex parte remedies, especially given the steep initial advantages normally enjoyed by the FTC in such proceedings and, relatedly, the exceptionally low success rate of similarly situated defendants .

    Attorney Andrew Gordon, a member of the defendants’ legal defense team, stated:

    “Normally, it is our practice to refrain from commenting to the media on matters that are pending before the court. However, the FTC’s tactics thus far, which include concealment of their losses in court from the public, call for the record to be set straight. Until we get to trial, we will allow our court filings, such as the answer and recent motion to allocate receivership expenses to the FTC, to speak for us. It is telling that the Court quickly discharged the receivership and asset freeze that the FTC previously misled the Court to enter. It is important in the American system of justice that our clients get a fair trial, and that the press refrain from jumping to conclusions and accepting the FTC’s complaint and publications as the whole, true story.”

    This case arose from the FTC’s allegations that the Defendants were engaging in deceptive online advertising practices in violation of Section 5(a), of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. § 45(a) and Section 4 of the Restore Online Shoppers’ Confidence Act (“ROSCA”), 15 U.S.C. § 8403. The Defendants operate several permit renewal businesses that help interstate commercial carriers remain compliant with the slew of complex and rapidly-changing state and Federal regulations. The FTC alleged that the Defendants were engaging in deceptive businesses practices by misleading consumers into believing that Defendants were affiliated with a governmental entity.

    On September 15, 2016, the FTC obtained an ex parte TRO, freezing the Defendants’ personal and business assets, and imposing a court-appointed receiver to wrest control of the Defendants’ businesses during the pendency of the proceedings. Defendants were thus placed in the position of having to defend themselves without access to any funds for legal fees or business records-records and funds that were necessary for the Defendants to support their defense. Unless the FTC’s requested relief was immediately overturned, the asset freeze and receivership would remain in place for the pendency of the litigation; a sure death sentence for the Defendants’ businesses.

    Two weeks later, on September 29, 2016, the federal court took witness testimony and heard arguments from the Defendants’ counsel, all of which highlighted the facts that (i) the FTC’s ex parte request for an asset freeze and receivership was improvident, (ii) the FTC acted inappropriately by implying that exigent circumstances existed when, in fact, no emergency existed, and (iii) the Defendants’ business was both legitimate and extremely helpful to thousands of customers nationwide who relied on the Defendants for their interstate commercial carriers registrations.

    Defendants prevailed at the hearing, and the asset freeze and receivership were immediately lifted. A greatly modified preliminary injunction still issued; however, the restrictions of the injunctions were entirely acceptable to the Defendants and, in fact, were offered to the FTC by the Defendants prior to the evidentiary hearing.

    To understand the significance of the Court’s September 29 ruling, it is necessary to examine two substantial advantages enjoyed by the FTC in litigating matters involving claims of deceptive advertising. When online advertisers face off against the FTC, it is a wildly uneven playing field.

    First, the FTC typically imposes a drastically accelerated litigation timeline, forcing defendants to scurry and draft complex responsive pleadings in very short order. In the case at hand, for instance, Defendants were given only a handful of days to prepare for the preliminary injunction hearing and to draft a lengthy memorandum in opposition to the FTC’s motion for a preliminary injunction.

    Second, the FTC is held to a different standard of law, making it easier for the Commission to obtain preliminary injunctions. Unlike private litigants, the FTC does not need to prove irreparable injury when seeking a TRO –such injury is presumed in a statutory enforcement action. Because irreparable injury is presumed, the FTC’s burden of establishing success on the merits is decreased, and a district court “‘need only to find some chance of probable success on the merits'” in order to award preliminary relief.

    The two aforementioned factors create a markedly uphill battle for defendants accused of violating the FTC Act and those that wish to oppose the entry of a preliminary injunction against them. The resounding defeat of the FTC in this phase of the case underscores the importance of the Defendants’ attorneys’ accomplishment in the face of the overwhelmingly odds that were stacked in favor of the FTC. President James Lamb denies any wrongdoing in the matter and questions what might be motivating the FTC to suddenly attack his fifteen (15) year old business, which offers a valuable service to the trucking industry. Lamb echoed his attorney this morning:

    “For over a decade, we have worked diligently to serve and educate the industry and stand up for the rights of the smaller players in this industry. Now the FTC is calling our reputable service a “scam” when, in reality, we have always provided a valuable service to carriers and owner operators that helps keep them in compliance and out of trouble. Anyone who visits our website can see that we perform valuable registration services for the transportation industry and hold ourselves out as an independent third party. Our resolve and faith in the justice system has not been shaken by FTC’s false claims, strong arm tactics, and attempts to demonize us in the press before trial.”

    Having suffered a resounding defeat in the early stages of the case, the FTC has undertaken efforts to bolster its flailing case by publishing false and defamatory statements about the Defendants in press releases and FTC-sponsored blog posts. These activities, which are all too familiar to counsel who handle FTC matters, demonstrate the FTC’s unabashed policy of posting self-serving and defamatory half-truths about ongoing cases in which it is involved, under the guise of “legitimate reporting.” An example of the FTC’s improvident behavior can be seen in its October 17, 2016 press release, in which the FTC summarily stated that the Defendants were “government imposters,” despite the fact that the Defendants’ websites were (and remain) replete with disclaimers identifying them as independent consulting firms. This illustrates the ongoing and vexing obstacle that any defendant facing a FTC-related case must hurdle, namely, that the FTC tries its cases in the press before stepping foot into court.

    Challenges in the case still remain, however, the Defendants have effectively halted the FTC’s momentum and highlighted the improvident and improper actions of the FTC. The record now reflects the overly aggressive nature of the FTC’s conduct by formally acknowledging the impropriety of the asset freeze and court-appointed receiver. With hope, the ruling will help to make it harder for the FTC to employ similarly aggressive and improvident tactics against other online advertisers in the future.

    1. See e.g., FTC v. A TO Z Marketing, Inc., No. 14-56582 (9th Cir.); No. 8:13-cv-00919 (C.D. Cal.) (granting preliminary injunction in response to FTC allegations of deceptive online marketing in violation of Section 5(a) of the FTC Act); FTC v. Sale Slash, LLC, et. al., No. 2:15-cv-03107-PA-AJW (granting preliminary injunction against Defendants Apex Customer Care LLC, Penway LLC, Renvee LLC, Optim Products LLC, and Edgar Babayan in response to FTC allegations of deceptive online marketing in violation of Section 5(a) of the FTC Act); and FTC v. American Yellow Browser, Inc., No. 1:15-cv-02047 (N.D. Ill.) (granting preliminary injunction to halt allegations of deceptive online marketing in violation of Section 5(a) of the FTC Act).
    2. FTC v. IAB Mktg. Assoc., LP, 746 F.3d 1228, 1232 (11th Cir. 2014) (citing FTC v. Univ. Health, Inc., 938 F.2d 1206, 1218 (11th Cir. 1991)).
    3. FTC v. World Wide Factors, Ltd., 882 F.2d 344, 347.
    4. Id. (quoting United States v. Odessa Union Warehouse Co-op, 833 F.2d 172, 176 (9th Cir. 1987)).


    The action by the FTC is very troubling especially giving false information to the court to gain access to close down a legitimate company without proper cause. Thankfully the court promptly lifted the injunction after being advised the court was dubbed into ordering the injunction by the FTC and in lifting the injunction admonished the FTC for its false and unsubstantiated charges.
    God bless the USA and our court system which acted in the correct manner to admonish the bad actions of the FTC.. Someone who instigated this action should be terminated immediately as a way to show other members of the FTC they cannot take unlawful actions without some risk of dismissal!!!!

  4. Pat Hockaday (JoJo)

    Exactly how many complaints, and by who, have been made to prompt the FTC into this investigation?

    Exactly how did Mr. Lamb scam anyone?
    DOTAuthotity,com doesn’t look like a government web site to me!
    Don’t government web sites end in .gov NOT .com???

    What about the headline at the very top of the page that clearly states; 
    DOTAuthority is a third party provider offering services for a fee.
    This is a commercial solicitation and advertisement.
    DOTAuthotity is not affiliated with any government authority.

    Oh, I get it now, Drivers who don’t know how to conduct business have sought out someone who does know how to conduct business, for a Fee!
    And now these Drivers have been scammed because they Obviously CAN”T READ and this Fact makes this man a thief!!!

    How much did these Independents SAVE by having their Running Authority set up and maintained by a professional that Can Read and possibly even Write????

    What about the elephant in the room?
    Mr. Lamb took on a Very Powerful gun lobby group when he stood up for OTR Drivers need and desire to carry a weapon for self defense across state lines.
    Is it possible that a couple of phone calls were made to Shut This Man Down????

    Mr. Lamb has had his assets unfrozen by the same judge that froze them with a court order.
    Doesn’t this have any significance towards Mr. Lambs character???
    Isn’t Mr. Lamb entitled to his day in court before we HANG HIM????

    I know all of you truckers have total and complete faith in the FMCSA so Of Course The FTC is completely in the right here!!!!!

    I’ve always wondered why the FTC does not go after the mega carriers for false advertisement??
    Oh, Thats Right, the megas have money and lots of it while their Drivers are grossly underpaid just as they ADVERTISE!!!!

  5. Allen Smith

    MythBuster: FTC appears to be deceiving the public, industry and the media into thinking and its related companies have been shut down. In truth, despite the FTC’s cries of wolf, a Federal Judge strengthened existing disclaimers, and ruled businesses be turned back over to Lamb and his partner and be allowed to operate in accordance with court order as the case moves forward for trial.

  6. Donna Smith

    According to the FMCSA, pretending to be a government official to obtain money from someone is a Federal Crime: “Under federal law, pretending to be “an officer or
    employee acting under the authority of the United States” in order to demand or obtain “any money, paper, document, or thing of value” can result in a fine as well as
    imprisonment for up to three years (18 USC § 912).”

    So, if Mr. Lamb, his partner and their companies were actually acting as “government imposters” as the FTC states, and they were demanding money rather than offering their
    services as one method to comply with a fee-based regulatory program, then where are the arrests and the indictments?

    Obviously, even the FTC doesn’t believe they committed this crime. Anyone who has been following Mr. Lamb over the past few years knows that he has taken on many
    very powerful and wealthy people in the industry, exposing abuse and corruption.

    Could this be ” in retaliation for his political activities, either within the industry or at-large. The questions is: who might want to take Mr. Lamb down?

  7. […] suit arises from the FTC’s original September 2016 allegations that and its affiliates were engaging in deceptive online advertising practices in […]

  8. […] It all started in October of 2016  when the United States Federal Trade Commission (“FTC”) convinced a Federal Judge into believing that a 15 year old small business truck permit company and its sister company, were allegedly engaged in deceptive business practices.  They were accused of  impersonating government transportation agencies, such as the U.S. Department of Transportation (USDOT). Read more The overreach of Regulatory Power- How far can it go? […]

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