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Federal Trade Commission v. Trudeau

August 7, 2008

FEDERAL TRADE COMMISSION, PLAINTIFF,
v.
KEVIN TRUDEAU, DEFENDANT.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

On November 16, 2007, this court found defendant Kevin Trudeau in contempt of its September 2004 Injunction (the "2004 Injunction") because Trudeau had misrepresented the contents of his book, The Weight Loss Cure "They" Don't Want You to Know About (the "Weight Loss Book") in several infomercials he originally produced in December 2006 (the "Infomercial").*fn1 See Federal Trade Commission v. Trudeau, 2007 WL 5366159 (N.D. Ill. 2007) ("Trudeau I"). The court will not repeat the facts or its reasoning, which are fully contained in Trudeau I, except as necessary to explain the instant holding confirming its finding of contempt and imposing an appropriate remedy (on which this court had reserved ruling in Trudeau I).

On July 22, 23, and 25, 2008, after extensive briefing by the parties, the court held an evidentiary hearing to address the issue of remedy, as well as Trudeau's motion to reconsider the finding of contempt. As stated in Trudeau I, liability for civil contempt required a showing by plaintiff FTC, by clear and convincing evidence, that a valid court order existed, defendant knew of the order, and failed to comply with it. After making a prima facie showing of contempt, the burden shifted to Trudeau to demonstrate why he was unable to comply with the order. See Trudeau I, 2007 WL 5366159 at *3.

Motion to Reconsider

Trudeau's motion to reconsider attacks the court's finding that he failed to comply with the 2004 Injunction and, failing that, seeks to establish an excuse for such failure. Citing Goluba v. School Dist. of Ripon, 45 F.3d 1035 (7th Cir. 1995), Trudeau argues that the 2004 Injunction, which itself resulted from an earlier finding of contempt, must be construed as incorporating the FTC's so-called Mirror Image Doctrine (the "MID" or "Doctrine") that guides the agency in bringing enforcement actions concerning advertisements for books, which are protected by the First Amendment. The MID was first published in 1971 (36 Fed. Reg. 13414-02), and generally provides that the FTC "ordinarily will not proceed against advertising claims in connection with promoting the sale of books [if the advertisement] only purports to express the opinion of the author or to quote the contents of the publication . . .."*fn2 As it relates to this case, Trudeau claims that the comments he made in the Infomercial are either opinion (e.g., the diet protocol is "easy"), or are direct quotes from selected phrases in the Weight Loss Book. It appears that, according to the MID, so long as an advertisement contains an actual quotation of the precise words used in a book, the FTC "ordinarily" won't proceed against such claims even if other material in the book contradicts the quoted language. Thus, because selected quotations from the book state that the diet protocol in the Weight Loss Book is "easy to do," that it can be done at home, and that the dieter can "eat anything you want," to name a few, the same claims contained in the Infomercial are protected by the MID.

Trudeau is wrong on all fronts of this argument. First, the court finds that the MID was not incorporated into the 2004 Injunction. It was never mentioned by name, and the language of the MID was not included. Indeed, the court had never heard of the Mirror Image Doctrine prior to the recent briefing and proceedings. Even defendant's proffered expert on FTC practice, Jeffrey Harris, agreed that courts are generally unfamiliar with the MID. Indeed, the court can find no published court decision that even mentions the MID.

Conceding this fact as he must, Trudeau falls back on the argument that he and his counsel were aware of the MID when the Infomercial was made, and that Trudeau governs his comments with the Doctrine in mind. This argument is absurd for a number of reasons. First, at the evidentiary hearing, Trudeau admitted that he doesn't even read his books after dictating the text, and further that he does not script his infomercials or review them after they are recorded.*fn3

It would thus be impossible for him to choose his words carefully while making the infomercials in light of the precise language contained in the Weight Loss Book. Moreover, FTC counsel has represented to the court that they had no intention of incorporating the MID into the language of the 2004 Injunction, and the court credits that representation. To put it bluntly, if the parties or their attorneys had any intention to incorporate the MID into the 2004 Injunction, they should have and would have informed the court as much, and included the language in that order.

In any event, the Doctrine apparently applies to original enforcement actions, and does not absolutely prohibit proceeding against advertisements for books that merely express opinion or quote from the contents of the publication. The MID states merely that "[t]he Commission as a matter of policy ordinarily will not proceed against" such advertisements. (Emphasis added.) It would not be surprising, even if the MID were to apply in this case, that the FTC would make an exception with respect to Mr. Trudeau, who has a long history of consumer deception as well as findings of contempt by this court. At the hearing in which the 2004 Injunction was entered, this court took great pains to make sure that Mr. Trudeau knew exactly what his obligations were, and expected him to behave accordingly.

Trudeau was banned from making any infomercials except those advertising his books, which all parties and the court recognized were themselves protected by the First Amendment. Although consent orders such as the 2004 Injunction should be interpreted to effect the intention of the parties, they must also be interpreted to effect the intention of the court. Under any standard, the language of that injunction could not be clearer: Trudeau was allowed to make infomercials in connection with the advertising or promotion of publications provided that he "must not misrepresent the content of the book." As the court found in Trudeau I, he clearly and, no doubt intentionally, violated that provision.

The word "misrepresent" is commonly used both by laymen and the legal profession. It includes both outright lies and statements that are misleading in light of unstated circumstances.*fn4

As held in Trudeau I, the "content" of the Weight Loss Book means "all that is contained . . . everything inside" the book. See Trudeau I, 2007 WL 4109607 at *5.

The court stands by its earlier conclusion that Trudeau's repeated claims on the Infomercial that the diet protocol is "easy" and "simple" misrepresent the content of the book. But even if the court were to credit Trudeau's argument that such statements are mere matters of "opinion," the Infomercial contains a number of statements that are clear misrepresentations. To begin with, Trudeau makes repeated reference on the Infomercial to what a dieter can eat after completing the four phase protocol described in the Weight Loss Book, and states that after he (Trudeau) was "off the program" and "finished this protocol" he was able to eat anything he wanted.*fn5 These are outright misrepresentations. The Weight Loss Book makes very clear that "Phase 4 is for the rest of your life." Simply put, according to the Weight Loss Book there is no "after." Moreover, dieters following Phase 4 for the "rest of" their lives cannot eat "anything [they] want." To the contrary, the dieter is required to eat "only 100% organic food," and is prohibited from eating "brand name" food, "fast food," or food served by "regional or national chain restaurants."

Parenthetically, in Trudeau I, the court wondered aloud how Trudeau was able, as he stated repeatedly in the Infomercial, to eat a "big" portion of prime rib "marbled with fat" and a "big hot fudge sundaes with real ice cream, real hot fudge, real nuts and real whipped cream" and still follow Phase 4. At the recent evidentiary hearing, the court asked this question of Mr. Trudeau, who stated that the meal he was referring to was purportedly eaten at the Boston restaurant Durgin Park. This court, as well as many people who have visited Boston, has eaten at this famous restaurant located in Faneuil Hall at Boston Harbor. A perusal of Dugin Park's web site (www. ...


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