Trudeau v. United States

68 Fed. Cl. 121, 2005 U.S. Claims LEXIS 279, 2005 WL 2363043
CourtUnited States Court of Federal Claims
DecidedSeptember 26, 2005
DocketNo. 05-263 C
StatusPublished
Cited by9 cases

This text of 68 Fed. Cl. 121 (Trudeau v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trudeau v. United States, 68 Fed. Cl. 121, 2005 U.S. Claims LEXIS 279, 2005 WL 2363043 (uscfc 2005).

Opinion

OPINION AND ORDER

GEORGE W. MILLER, Judge.

This matter is before the Court on defendant’s motion to dismiss plaintiffs complaint pursuant to Rule 12(b)(1) of the Rules of the Court of Federal Claims (“RCFC”) for lack of subject matter jurisdiction or, in the alternative, pursuant to RCFC 12(b)(6) for failure to state a claim upon which relief can be granted. Oral argument was deemed unnecessary. For the reasons set forth below, defendant’s motion to dismiss pursuant to RCFC 12(b)(1) is GRANTED.

BACKGROUND1

I. Nature of the Case

The ease arises from a dispute regarding the wording of a press release issued by the Federal Trade Commission (“FTC”) to announce the settlement of a civil enforcement action against plaintiff Kevin Trudeau for false advertising in violation of the Federal Trade Commission Act.

At the time the enforcement action was filed, Mr. Trudeau was in the business of selling various self-help and health-related products, principally through radio and television “infomercials,” which are relatively long commercials in the format of television programs. See Webster’s New College Dictionary 369 (2001). In particular, Mr. Trudeau promoted a dietary supplement named Coral Calcium Supreme, which he advertised would cure cancer, among other diseases. In January 1998, the FTC filed a complaint against Mr. Trudeau in the District Court for the Northern District of Illinois, alleging that this product did not provide the advertised benefits and that Mr. Trudeau had engaged in false and deceptive trade practices. The FTC’s suit concluded when the parties reached a settlement agreement, which was embodied in a Stipulated Final Order entered by the District Court for the Northern District of Illinois on September 2, 2004 (“the Stipulated Order”). The Stipulated Order provided the FTC with injunctive relief, including a broad prohibition of the type of infomercial that had led to the enforcement action. In addition, Mr. Trudeau was prohibited from manufacturing, distributing, promoting or offering for sale any products containing coral calcium. However, the Stipulated Order stated:

[123]*123Defendants ... expressly deny any wrongdoing or liability for any of the matters alleged in the Complaint and the civil contempt action. There have been no findings or admissions of wrongdoing or liability by the Defendants ... other than the finding against Kevin Trudeau for contempt of Part I of the Stipulated Preliminary Injunction, entered by the Court on June 29, 2004.

Compl. Ex. A at 3-4. On September 7, 2004, the FTC issued a press release on its website regarding the settlement with Mr. Trudeau. This press release forms the basis for Mr. Trudeau’s claims in this litigation.

In his complaint, Mr. Trudeau characterizes the district court’s Stipulated Order as a contract within this Court’s Tucker Act jurisdiction. He alleges that the FTC’s press release breached the contract’s implied covenant of good faith and fair dealing because it announced that the settlement constituted an admission of wrongdoing by Mr. Trudeau, thereby depriving Mr. Trudeau of the benefits of the agreement. See Compl. ¶ 2. Mr. Trudeau seeks an unspecified amount of money damages for business injuries resulting from the alleged breach of the Stipulated Order.

The United States moved to dismiss Mr. Trudeau’s complaint for lack of subject matter jurisdiction pursuant to RCFC 12(b)(1) or, in the alternative, for failure to state a claim upon which relief can be granted pursuant to RCFC 12(b)(6). Defendant argued that “the Stipulated Order, if contractual at all, was entered into by the United States in its sovereign capacity2, and thus, falls outside this Court’s limited Tucker Act jurisdiction.” Def. Br. at 3. Additionally, the Government argued that the “Court lacks jurisdiction because the district court has expressly retained jurisdiction to enforce the Stipulated Order upon which Mr. Trudeau bases his claim.” Id. Alternatively, the Govemment contended that Mr. Trudeau had failed to state a claim upon which relief can be granted because the Stipulated Order did not impose any implied duties upon the FTC and, even if it did, no reasonable view of the facts alleged in the complaint could establish that the FTC breached the contract in the manner alleged by Mr. Trudeau. Id. at 4.

II. Statutory and Regulatory Background

The FTC is an independent agency of the United States created by the Federal Trade Commission Act (“FTC Act” or “Act”), 15 U.S.C. §§ 41-58 (2000). Among other responsibilities, the FTC enforces sections 5 and 12 of the FTC Act. Section 5(a) declares unlawful “unfair or deceptive acts or practices in or affecting commerce” and empowers the Commission to prevent such acts or practices. 15 U.S.C. § 45(a)(1), (2). Section 12 prohibits the dissemination of “any false advertisement” in order to induce the purchase of “food, drugs, devices, or cosmetics.” 15 U.S.C. § 52(a)(2). The Act defines “false advertisement” as “an advertisement, other than labeling, which is misleading in a material respect.” 15 U.S.C. § 55.

A false advertisement under section 12 constitutes an unfair or deceptive act or practice within the meaning of section 5. 15 U.S.C. § 52(b). False advertising is also made a criminal offense if committed in connection with the sale of injurious products or “with intent to defraud or mislead,” and is punishable by a fine of not more than $5,000 and imprisonment for not more than six months. 15 U.S.C. § 54.

The Act authorizes the FTC, through its own attorneys and/or the Attorney General, to initiate civil actions in federal district [124]*124court to enjoin violations of the FTC Act. See 15 U.S.C. §§ 53(b), 56(a). In such cases, the district court’s authority to issue injunctive relief carries with it the full range of equitable remedies, including consumer redress and disgorgement of profits. See FTC v. Gem Merchandising Corp., 87 F.3d 466, 468-70 (11th Cir.1996).

III. Statement of Facts

A. The FTC’s Enforcement Efforts Against Mr. Trudeau

For several years, the FTC sought relief against Mr. Trudeau, alleging that his infomercials misled consumers about cures for serious diseases, such as cancer and multiple sclerosis, as well as common conditions, such as hair loss and obesity. The Stipulated Order resolved two cases that the FTC had filed against Mr. Trudeau dating back to 1998. Specifically, in 1998, and again in 2003, the FTC filed actions against Mr.

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Cite This Page — Counsel Stack

Bluebook (online)
68 Fed. Cl. 121, 2005 U.S. Claims LEXIS 279, 2005 WL 2363043, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trudeau-v-united-states-uscfc-2005.