FTC Seeks Civil Contempt Liability for Defendants' Violations of Court Order - Enforma Natural Products, Inc

The Federal Trade Commission today announced that it has asked a federal district court to order Enforma Natural Products, Inc., Andrew Grey, and Michael Ehrman to show cause why they should not be held in civil contempt for violating the terms of a May 2000 final consent order prohibiting unsubstantiated claims for weight loss products. Among other things, the FTC has asked the court to order the defendants to stop using the trade names for the products. Since the entry of the order on May 11, 2000, Enforma, Grey, the company's President, and Ehrman, the company's Executive Vice President of Sales and Marketing, have continued to advertise two purported weight loss supplements, Fat Trapper Plus and Exercise In A Bottle, using unsubstantiated and misleading representations, according to the FTC.

Enforma broadcast two infomercials for its weight loss products, Fat Trapper and Exercise In A Bottle, collectively referred to as the "Enforma System." The infomercials featured former professional baseball player Steve Garvey and an actress described as a "nutritionist," Lark Kendall (a/k/a Kendall Carson), extolling the miracle of the Enforma System. The infomercials stated, among many other claims, that "Fat Trapper blocks fat from foods," that Exercise In A Bottle works to burn calories "even while resting," and that consumers would "never, ever, ever, ever have to diet again."

In April 2000, to settle FTC allegations that their claims about the Enforma System were deceptive, Enforma and its President, Andrew Grey, agreed to a consent order and the payment of $10 million in consumer redress. That order prohibits Enforma and Grey from making unsubstantiated claims in the future and requires them to disclose in advertising that dieting and/or exercise are required to lose weight. The order also specifically prohibits Enforma from making unsubstantiated claims through the use of the names "Fat Trapper," "Fat Trapper Plus," and "Exercise In A Bottle" unless defendants possess competent and reliable scientific evidence to support the product claims.

According to the FTC, although Enforma ceased broadcast of the two 30-minute infomercials in the United States shortly after it signed the order, it continues to advertise Fat Trapper Plus and Exercise In A Bottle in other media. For example, Enforma placed a 3½ minute abridged version of the infomercials on its Web sites. In addition, Enforma uses television commercials, print advertisements, and packaging to disseminate claims the FTC challenged as unsubstantiated.

In its application for civil contempt sanctions, the FTC alleges that Enforma has not provided any competent and reliable scientific evidence that Fat Trapper Plus in fact "traps fat." Thus, according to the FTC, Enforma continues to violate the order by using the name "Fat Trapper Plus" to communicate that the product actually traps dietary fat when taken at the recommended dose and therefore contributes to weight loss. Similarly, the FTC alleges that the trade name "Exercise In A Bottle" conveys that the product, when taken at the recommended dose, provides some of the health or weight loss benefits of exercise, such as increased metabolism. According to the FTC's civil contempt application, Enforma, Grey, and Ehrman have not provided any competent and reliable evidence that either product performs as represented, and are therefore violating the court's order.

The FTC's application for contempt sanctions also notes that Ehrman, although not named in the underlying order, is liable for the order violations. According to the FTC, Ehrman, who was on notice of the order's requirements, is a key player in developing the company's advertising claims, such as those listed above, and in ensuring that such advertising is substantiated. The FTC contends that Ehrman acted in concert or participation with Enforma and Grey in violating the terms of the order.

The Commission's application is scheduled for a hearing on February 4, 2002. As ultimate relief, the FTC seeks excision of the trade names "Fat Trapper," "Fat Trapper Plus," and "Exercise In A Bottle." If the court agrees that trade name excision is warranted, the FTC's application further requests that all products bearing the deceptive and misleading trade names be immediately recalled. In addition, the contempt application seeks an accounting and disgorgement of all profits from sales of Fat Trapper, Fat Trapper Plus, and Exercise In A Bottle since May 11, 2000.

The application was filed in U.S. District Court for the Central District of California, in Los Angeles.

NOTE: The issuance of an order to show cause why a defendant should not be held in civil contempt does not constitute a finding or ruling that the defendant has actually violated the court's order. The determination of whether the defendants have in fact violated the order will be decided by the court.

Copies of the order to show cause are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.