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Kevin Trudeau to Pay $37.6 Million Fine for Misrepresentations

By Robyn Hagan Cain on December 22, 2011 3:04 PM

The sweet siren song of infomercial infamy is too tempting for Kevin Trudeau.

After several multi-million dollar sanctions and bans from the infomercial airwaves, the Seventh Circuit Court of Appeals found last month that a district court had properly fined Trudeau $37.6 million for taking to the airwaves to promote The Weight Loss Cure "They" Don't Want You to Know About, with infomercials that the courts say included misrepresentations.

In upholding the fine, the Seventh Circuit noted that Trudeau had aired infomercials in violation court orders 32,000 times.

In 2004, Trudeau reached a settlement with the Federal Trade Commission over claims that his calcium product could cure cancer, and other similarly unsupported product claims. The district court banned Trudeau from using infomercials to sell his products, but carved out a narrow exemption for infomercials promoting books, as long as Trudeau did not misrepresent the contents of the books.

Trudeau found himself back in court for contempt in 2009 based on misrepresentations from a book-based infomercial; this time, Trudeau walked away with the $37.6 million fine and a three-year infomercial ban. Trudeau has since yo-yoed through between the district court and Seventh Circuit Court of Appeals battling the sanctions.

In November, the Seventh Circuit upheld the eight-figure fine, finding that it was both conservative and reliable based on Trudeau's own figures.

For Trudeau's contempt, the district court imposed a remedial fine measured by consumer loss. That was not error, according to the Seventh Circuit. Furthermore, the court found that the revised infomercial provision of the penalty, which requires Trudeau to post a $2 million bond before he participates in an infomercial, did not violate Trudeau's rights. To the extent that the bond order applies to misleading commercial speech, there was no possible First Amendment violation because misleading commercial speech is not entitled to constitutional protection.

The Seventh Circuit Court of Appeals does not take misrepresentations lightly. If you have a client who makes false or questionable commercial claims in advertising, the Seventh Circuit will not let your client hide behind the First Amendment to escape sanctions.

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