The First Circuit Court of Appeals has affirmed a multi-million dollar award in the Federal Trade Commission’s (FTC’s) lawsuit against the producer and distributor of infomercials for dietary supplements that could purportedly cure everything from cancer, obesity and Parkinson’s disease to multiple sclerosis, heart disease and lupus. FTC v. Direct Mktg. Concepts, Inc., No. 09-2172 (1st Cir., decided October 21, 2010). Infomercials for “Coral Calcium” apparently generated sales of more than $54 million, and infomercials for “Supreme Greens” generated nearly $15 million in sales.
FTC filed suit against the companies in 2004, seeking injunctive relief and monetary equitable relief to “redress customers who had purchased Coral Calcium or Supreme Greens in reliance on the Defendants’ allegedly deceptive infomercials.” The district court granted FTC’s motion for summary judgment, finding the infomercials misleading as a matter of law and entered judgment against the defendants, permanently enjoining them from running the deceptive infomercials and ordering disgorgement of $48.2 million from all defendants and $.5 million from one defendant.
Among other matters, defendants argued on appeal that “the record contained issues of fact as to whether they possessed sufficient substantiation for the claims asserted in the infomercials,” and “the claims made in the infomercials were mere puffery and were mollified by disclaimers, and therefore were not actionable.” The appeals court agreed with the district court’s disposition in every respect, noting “Despite the volume of the Defendants’ arguments, we find no more substance in them than the district court found in their infomercials.”