Kevin Trudeau Finally Gets a Partial Victory against the FTCSeptember 11, 2009
By Cassandra A. Soltis –
Regrow your hair. Cure cancer. Obtain a photographic memory. These are just some of the claims that Kevin Trudeau, infomercial marketer extraordinaire, has made for various products over the years. The Federal Trade Commission (“FTC”) is all-too-familiar with Mr. Trudeau and his promotional tactics: since 1998, Trudeau has entered into several Orders with the Agency that collectively made him: promise he would not misrepresent the benefits of any product without competent and reliable evidence; submit infomercials to the FTC before they are televised; and stop marketing Coral Calcium as a cure for cancer or from advertising any products in infomercials, except to promote his publications, provided he did not refer to any other product he was marketing.
His troubles with the FTC resurfaced in 2007, when he began promoting his book The Weight Loss Cure “They” Don’t Want You To Know About. The FTC brought civil contempt proceedings against Mr. Trudeau, arguing that he had violated a 2004 Consent Order’s command that he not misrepresent the content of his book. FTC v. Trudeau, No. 08-4249, 2009 U.S. App. LEXIS 19318, at *11 (7th Cir. Aug. 27, 2009). Trudeau countered that he was merely quoting what he wrote in the book. However, the district court disagreed, finding that Trudeau could not cherry-pick certain phrases which “did not accurately portray the book’s overall content.” Id. at *12. The court found Trudeau in contempt of court, required that he pay $37.6 million, and banned him for three years from appearing in infomercials.
Trudeau appealed to the court of appeals. On August 27, 2009, the United States Court of Appeals for the 7th Circuit agreed with the district court’s contempt finding, stating that Trudeau “clearly misrepresented [his] book’s content.” Id. at *3.
However, the Court of Appeals rejected the district court’s monetary sanction because the district court’s order did not indicate “how the court arrived at the figure it did, whether the award will be used to reimburse consumers, and what happens if there’s money left over after all reimbursements are paid.” Id. at *38.
In addition, the Court ruled that the district court had erred in the manner in which it had imposed sanctions. It found that although the case was labeled as civil contempt, the district court had actually imposed a remedy that appeared to be a criminal contempt sanction, without providing certain constitutional safeguards that apply in criminal cases.
The Court also found the infomercial ban to be improper because the ban was to last for three years, regardless of what Trudeau did in the future. Id. at *63-65.
If history is any indication, the courts have not seen the last of Kevin Trudeau.