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Consumer Protection; Sanctions

Consumer Protection
Sanctions

A $37.6 million sanction for airing deceptive infomercials was not excessive.

“To calculate his fine, the district court relied on Exhibit 20, a table of 800-number sales figures for Trudeau’s Weight Loss Cure book, and the testimony of George Potts, ITV’s director of financial planning and analysis.

According to the table, as explained by George Potts, the 800-number sales plus shipping and handling, minus returns, equals $37.6 million, the amount the district court ultimately concluded Trudeau should pay. Trudeau challenges the evidence supporting that number, but his arguments are unpersuasive: In his first appeal in this case (Trudeau I), Trudeau himself relied on the $37.6 million figure as the measure of ITV’s gross revenues from the Weight Loss Cure. The district court’s reliance on that evidence was not error, much less clear error. See FTC v. Stefanchik, 559 F.3d 924, 931 (9th Cir. 2009). In fact, it is worth emphasizing that the district court showed restraint in calculating the remedial sanction based only on 800-number sales. Most of the sales caused by Trudeau’s violation of the court order may have been made through the 800-number, but not all. Out of an abundance of caution—in order to avoid using any questionable figures—the district court decided not to include internet sales or in-store sales of the Weight Loss Cure, even though those books were sold with a conspicuous ‘As Seen on TV’ sticker, making the link between those sales and the infomercial less than speculative. In the end, the district court’s careful approach has left us with a reliable and conservative figure—$37.6 million—that is comfortably within its discretion.”

Affirmed.

10-2418 FTC v. Trudeau

Appeal from the United States District Court for the Northern District of Illinois, Gettleman, J., Tinder, J.

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