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Federal Trade Commissionv.National Urological Group, Inc., et al.

CourtUnited States Court of Appeals for the Eleventh Circuit
Docket No.14-13131
DecidedMay 5, 2015
Reporter785 F.3d 477
JudgesUnited States Court of Appeals for the Eleventh Circuit; Circuit Judges Tjoflat and William Pryor, and Circuit Judge Rhesa H. Barksdale of the Fifth Circuit, sitting by designation; Judge William Pryor authored the opinion
Tags
CivilAdministrative LawConsumer ProtectionStatutory InterpretationPermanent InjunctionCivil ProcedureRemand
Case Summary

The Federal Trade Commission sued Hi-Tech Pharmaceuticals and its officers in the Northern District of Georgia over allegedly unsubstantiated weight-loss claims for dietary supplements. The injunctions barred representations about weight or fat loss and metabolism unless supported by competent and reliable scientific evidence, but did not require clinical trials of the products. When the defendants later promoted Fastin, Stimerex-ES, Benzedrine, and a reformulated Lipodrene, they submitted evidence and an expert declaration supporting their claims. The district court refused to consider that evidence, treated the defendants as barred from contesting the required level of substantiation, and held them in civil contempt, imposing approximately $40 million in joint and several sanctions on the company and three officers and $120,000 on another officer. The Eleventh Circuit vacated and remanded. The court held that the earlier judgment did not resolve what substantiation the injunctions required for these later products and advertising claims. It explained that the injunctions’ standard is context dependent, so the district court had to assess the proffered evidence rather than assume clinical trials were required. The court left for remand the evidence’s admissibility, any privilege issue, and whether admissible evidence met the injunctions’ standard. The contempt order was vacated and the case remanded for further proceedings consistent with the opinion.

Opinion

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Federal Trade Commission v. National Urological Group, Inc., et al. — The Atlanta Gleaner