Federal Trade Commission v. Trudeau

662 F.3d 947 (7th Cir. 2011)

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Nature of the Case

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Facts

D violated a court-approved settlement with the FTC (P) by misrepresenting the content of his book The Weight Loss Cure 'They' Don't Want You to Know About. D was held in contempt and ordered him to pay $37.6 million to D and banned him from making infomercials for three years. On appeal, the court affirmed the district court's finding of contempt but vacated the sanctions. The court also held that the infomercial ban was inappropriate as a civil sanction because it did not give D an opportunity to purge, that is, to comply with the underlying order not to misrepresent his publications. The district court reinstated the $37.6 million remedial fine. The court explained that it reached that figure by multiplying the price of the book by the 800-number orders, plus the cost of shipping, less returns. The court instructed P to distribute the funds to those who bought D's book using the 800-number; any remainder not paid to those victims or used in the administration of the sanction was to be returned to D. The district court imposed a $2 million performance bond, effective for at least five years. D appealed. D contends the consumer loss must be based on his unjust gain and the bond requirement violates the First Amendment.