Field Reports1 Oct, 2004 Response
Garvey Cleared of FTC AllegationsBy Nicole Urso email@example.com
SAN FRANCISCO — Former baseball star Steve Garvey beat the Federal Trade Commission (FTC) in federal appeals court on Sept. 2, clearing him of any wrongdoing while promoting weight-loss products.
This is Garvey's second victory against the Commission. In November 2002, Garvey was cleared of allegations that he knowingly made false statements while promoting the weight-loss supplements Fat Trapper and Exercise in a Bottle.
In one of the advertisements Garvey says, "I love this. So, you can enjoy all these delicious foods like fried chicken, pizza, cheeseburgers, even butter and sour cream, and stop worrying about the weight."
The district court ruled that Garvey did not have knowledge of any misrepresentations about the products and could not be held liable for them. The court also found that Garvey could not be held responsible as an endorser because he believed in the statements he made.
The federal appeals court ruled in Garvey's favor for the same reasons. According to his lawyer, Edward Glynn of Washington, D.C.-based Venable LLP, Garvey truly believed in the products he endorsed.
"Steve took it and his wife took it and they both lost weight," Glynn said. "He was given a couple of booklets that had information about the product in there. Additionally, he had met with people before the second infomercial who had taken the product and had told him about very favorable results. [The court] said that at least for somebody in Steve's position, as a spokesperson, that was enough."
The infomercials began airing in December 1998 and the FTC started investigating claims against the products within a year. In March 2000, the Commission filed complaints against Enforma System, the creators of Fat Trapper, Fat Trapper Plus and Exercise in a Bottle, for making unsubstantiated claims under Federal Trade Commission Act (FTCA) provisions. Enforma settled the allegations with a $10 million fine.
In an unprecedented move, the FTC filed an additional complaint against the product's spokesperson, Garvey, and when he won the first round, the FTC hammered away with an appeal. The past few years of court proceedings have questioned how liable spokespeople should be for the products they promote. Last week's decision provided clarification.
"It's the first litigated decision under the Federal Trade Commission Act ever," Glynn says. "It says look, if you're a celebrity you better not think that you can just show up, get a script, say anything that's in the script and not do anything else and you'll be fine no matter how outrageous what you're saying is. But on the other hand, you don't have to go hiring your own scientist to do testing on your behalf."
For further analysis of the ruling, please see this month's Response Legal Column by Linda A. Goldstein .
FTC Bans Kevin Trudeau from InfomercialsBy Nicole Urso firstname.lastname@example.org
WASHINGTON — Kevin Trudeau, the famous face of hundreds of infomercials — most recently Coral Calcium Supreme and Biotape — is prohibited from appearing in, producing, or releasing future infomercials that advertise any type of health product, service or program, according to a settlement made in early September with the Federal Trade Commission.
Trudeau is also restricted from making health benefit claims in any form of advertising, including print, radio, Internet, television and direct mail.
He will also pay a $2 million fine to settle FTC charges about making false claims. In the infomercials, Trudeau stated that Coral Calcium Supreme products can cure cancer and other diseases, and he said that Biotape can permanently cure or relieve severe pain. If the court finds that Trudeau misrepresented his financial situation, he will have to pay a whopping $20 million.