Former Los Angeles Dodgers first baseman Steve Garvey is off the hook for pitching a weight-loss system that ran afoul of the Federal Trade Commission, but infomercial marketers have been put on notice that they can be targeted separately from the distributors and manufacturers of those products.
In a ruling that helps better define the limits of liability for celebrity endorsers, the Ninth Circuit Court of Appeals has upheld a lower court ruling that the FTC failed to show that Garvey was recklessly indifferent to the truth of the claims he made about about "Fat Trapper" and "Exercise In a Bottle," or that he was aware that it was probably a bogus product and intentionally deceived.
The ninth circuit's decision was based primarily on the fact that Garvey and his wife had lost weight with the product and had reviewed literature about the product "purported to present scientific claims." While the court did not say the FCC rules on endorsers were too strict, it did find that the FTC had not shown that Garvey violated those rules.
But if Garvey is in the clear, the company that marketed the infomercial, Modern Interactive Technology (MIT), is not. The court reversed another part of the decision that had held that the FTC couldn't sue MIT because it had failed to target them in the initial suit against the manufacturers, which was settled out of court.
In ruling that MIT can still be sued, the court sent a message to marketers that the FTC will be able to come after them even after settling with the actual manufacturers of the products, and even if those manufacturers have agreed to indemnify the marketers against such suits.