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Direct Response Marketing

Field Reports

1 Jan, 2006 By: Thomas Haire, Nicole Urso Reed Response

Trudeau Speaks Out on State of ERA Lawsuit

LOS ANGELES — In an exclusive interview with Response, infomercial host Kevin Trudeau, author and marketer of top-selling book "Natural Cures They Don't Want You to Know About," says the Electronic Retailing Association (ERA) acts "like the mob" by only protecting its high-level members from Federal Trade Commission (FTC) investigation, while leaving the rest of the industry open to "FTC attacks."

 Jeffrey D. Knowles
Jeffrey D. Knowles

Trudeau filed a lawsuit on Sept. 21 in Ventura County, Calif. Superior Court against the ERA and its president, Barbara Tulipane, for defamation and unfair business practices after Tulipane made allegedly disparaging comments about him in a USA Today article on the direct response television industry last summer. In the Aug. 7, 2005 story, Tulipane indicated that Trudeau has tarnished the industry and said, "that it's easy to get sucked into what he's saying."

ERA's counsel from the law firm Davis Wright Tremaine LLP filed a response to the complaint on Nov. 17, and filed a motion to strike Trudeau's complaint on Dec. 5. "The ERA and its counsel are vigorously defending the suit and expects both counts of the complaint will be stricken," says Jeffrey D. Knowles, ERA chairman and partner at Washington, D.C., law firm Venable LLP. A hearing on ERA's motion, originally set for Jan. 20, has been continued until Jan. 30.

Knowles adds, "I respect Kevin. He's a marketing genius, an innovator and a very compelling spokesperson. But his lawsuit is unfounded."

Meanwhile, the ERA staff re-released its official statement when asked for further comment by Response: "The Electronic Retailing Association believes that the lawsuit filed by Kevin Trudeau against ERA and its president and CEO Barbara Tulipane is entirely without merit. The actions and statements challenged by Mr. Trudeau in his complaint do not, in ERA's view, give rise to any of the legal claims he alleges. ERA therefore intends to vigorously defend the suit and is committed to staying on course and working to foster the growth of the direct response industry worldwide."

However, Trudeau says there is some dissension in the ERA ranks. "The board is split," he contends. "I've received personal letters from board members telling me that they've been silenced because of their fiduciary responsibilities as board members, and have disavowed ERA's fight to me privately. They back my lawsuit 100 percent and disagree with Barbara's statements."

Trudeau, who says he's been sued twice by the FTC but has never been found guilty of wrongdoing by the regulators nor paid a penny in fines, adds that a number of past and present ERA board members and supporters have far more checkered histories than he does. "There are ERA board members who've been found guilty of wrongdoing by the FTC; I haven't" he contends. "What about major companies with ERA ties that sell horrible products that drive return rates above 40 percent? That doesn't tarnish the industry?"

Trudeau says the ERA should sue the FTC for its "overzealous" investigation of the direct response market — "like any good consumer protection organization would." He adds," If it doesn't, then the ERA needs to be abolished and a new industry association that will do its job for the whole industry — not just its biggest supporters — needs to be started."

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