- Infomercial King Sues FTC
- March 20, 2005
- Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
Kevin Trudeau, a well-known presence on the infomercial circuit with a record of clashes with consumer protection authorities, sued the Federal Trade Commission on February 28, 2005, over an agency press release issued in 2004.
Trudeau claims the FTC breached a settlement agreement by insinuating that he broke the law when the agreement between the agency and him explicitly stated that he made no such admission. He says the FTC is waging a campaign of retaliation against him for his public criticism of the agency. He is seeking damages estimated in the "many millions of dollars" and an injunction against the FTC for breach of contract.
As reported in the September 13, 2004, issue of [email protected], the FTC announced a settlement with Trudeau on September 7. The press release, headlined "Kevin Trudeau Banned From Infomercials," outlines how an FTC complaint of false and misleading claims against Trudeau resulted in a $2 million settlement and an injunction against him. It said that he made false claims about the benefits of his coral calcium and Biotape products -- that coral calcium could cure cancer and other illnesses and that Biotape provided permanent relief from severe pain. The release also explained how Trudeau was "broadly banned" from appearing in, producing, or disseminating infomercials.
According to his lawyer, Trudeau's lawsuit takes issue with a number of aspects of the press release. He argues the headline is wrong because he is still permitted to produce infomercials for his book, "Natural Cures 'They' Don't Want You to Know About." The main body of the release states that infomercials for books, newsletters, and informational publications are exempt from the ban. He also contests the FTC's implication that he is a "habitual false advertiser," which he says is false and damages his reputation and ability to do business. The FTC's implication that the $2 million was a fine or penalty is also misleading, Trudeau says, because the money went to consumer redress, and he has always offered an unconditional money-back guarantee to customers. Finally, Trudeau complains that the FTC implied that all the charges against him were true, when the settlement explicitly states that there was no finding of wrongdoing.
Trudeau has been investigated numerous times by the FTC and state attorneys general. In 1998, he paid $500,000 in consumer redress to settle an FTC complaint concerning his Mega Memory System. In 1996, the Wall Street Journal reported that Trudeau previously spent two years in prison for credit card fraud.
Significance: The FTC routinely issues press releases such as the one Trudeau has taken issue with. It is much more uncommon for the subject of the release to sue over it. It will be interesting to see how this dispute plays out.