August 27, 2009 / 7:08 PM / 10 years ago

UPDATE 1-TV pitchman Trudeau has FTC fine, ban thrown out

 * Contempt finding ruled proper
 * Court "troubled" by fine, TV ban
 * Case sent back to district court for new remedy
 By Jonathan Stempel
 NEW YORK, Aug 27 (Reuters) - A federal appeals court has
thrown out a $37.6 million fine and three-year infomercial ban
against Kevin Trudeau, who has long battled regulators over his
marketing of "cures" for obesity, disease and financial woe.
 Thursday's ruling by the Seventh Circuit Court of Appeals
in Chicago sends back to a lower court a case accusing the TV
pitchman of misleading marketing that violated his 2004
settlement with the Federal Trade Commission.
 Writing for a three-judge panel, Judge John Tinder said a
lower court judge properly held Trudeau in contempt for having
"outright lied" about the content of a book, "The Weight Loss
Cure 'They' Don't Want You to Know About."
 Yet the judge was "troubled" by the punishment because it
was unclear how the fine was determined, and because the
infomercial ban did not consider the possibility that Trudeau
could mend his ways.
 This despite the FTC's branding Trudeau, in the words of
Judge Tinder, as "a 21st century snake oil salesman" and
"nothing more than a huckster who preys on unwilling
consumers." Trudeau has pitched cures for such things as hair
loss, memory loss, excessive debt, cancer and AIDS.
 The appeals court ordered the district court judge to craft
a new remedy, including a criminal sanction if it so chose.
 FTC spokesman Peter Kaplan had no immediate comment. A
lawyer for Trudeau did not immediately return a call seeking
comment.
 In 2004, Trudeau entered a consent order with the FTC that
required him to pay $2 million and banned him from advertising
products in infomercials.
 An exception, however, let him advertise books that did not
refer to other products he was marketing, provided he did not
"misrepresent the content" of the books.
 The FTC said Trudeau violated that order by marketing a
weight loss program he said was "easy," "simple" and able to be
completed at home.
 In fact, the FTC said dieters would be limited to 500
calories a day, needed prescription hormone injections, and
faced dozens of diet and lifestyle restrictions such as
avoiding sugars, starches, inorganic foods, and exposure to air
conditioning and fluorescent lights.
 In a 55-page opinion, Tinder wrote that Trudeau was
properly held in civil contempt, having repeatedly distorted
the content of the program in multiple infomercials.
 He wrote though that it was unclear how the court arrived
at the fine, including whether it was based on "consumer losses
or ill-gotten gains," and said the court should have directed
the funds to be used to reimburse book purchasers.
 Tinder also said the three-year ban gives Trudeau no chance
to clean up his practices, likening it to "a prison term" more
appropriate to a finding of criminal contempt.
 "Trudeau could take all the steps in the world to convince
the FTC and the district court that he will be truthful in his
next infomercial, but even if he offers to read his book
word-for-word and say nothing else, he cannot free himself of
the court's sanction," the judge wrote.
 The case is Federal Trade Commission v. Trudeau, U.S.
Seventh Circuit Court of Appeals (Chicago), No. 08-4249.
 (Reporting by Jonathan Stempel, editing by Matthew Lewis)


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