Federal Trade Commission v. Trudeau

579 F.3d 754 (7th Cir. 2009)

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Nature of the Case

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Facts

D has promoted countless 'cures' for a host of human woes that he claims the government and corporations have kept hidden from the American public which include cancer, AIDS, severe pain, hair loss, slow reading, poor memory, debt, obesity. D uses infomercials to sell his snake oil cures. The FTC (P) accuses D of being nothing more than a huckster who preys on unwitting consumers--a 21st-century snake-oil salesman. His new book, The Weight Loss Cure 'They' Don't Want You to Know About is at issue. A consent decree banned P from appearing in infomercials for any products, except for books, provided that he did not 'misrepresent the content of the book.' Suffice to say in the infomercial for the book he intentionally misrepresented how easy and simply to follow the diet plan was. In reality, the program requires a diet of only 500 calories per day, injections of a prescription hormone not approved for weight loss, and dozens of dietary and lifestyle restrictions. D's troubles with P started over a decade ago. In 1998, D sued Trudeau for deceptive practices and false advertising in connection with a variety of products. D settled that case and paid $500,000 to compensate purchasers. Five years later, P went after him for marketing a cure for cancer and another for serious pain. D stipulated to a preliminary injunction to cease marketing these products without first submitting the infomercials to P. The court held D in contempt for violating the preliminary injunction and ordered him to cease marketing that product altogether. D got really smart and decided the First Amendment was not his best friend and D wrote a book talking about the cures. The court entered a Consent Order, which ordered D to pay $2 million for consumer redress and prohibited D from advertising any products in infomercials. D could participate in infomercials for publications, including his own publications, as long as the publication did not refer to any other product D was marketing. D was clean until he appeared in infomercials promoting his Weight Loss Cure book. Just about everything he said about the program was a lie. And amazingly it was easy to prove it. D took him back to court seeking contempt for violating the 2004 Consent Order’s command that Trudeau “must not misrepresent the content of the book.” The district court agreed with P. The court required D to pay P a little over $5.1 million to disgorge some of the royalties he received from sales of the Weight Loss Cure book. Also in its order on contempt remedies, the court concluded that, given D's prior willingness to flout court orders, only a complete ban on infomercials for three years would achieve compliance and protect consumers. On P's Rule 59(e) motion to correct a mathematical error the court, upped its monetary award to $37.6 million, 'representing a reasonable approximation of the loss consumers suffered as a result of defendant's deceptive infomercials.' The court also reiterated its three-year infomercial ban. D appealed.