Federal Judiciary

A Classic Easterbrook Opinion

By Robert Loblaw

Federal Trade Commission v. QT Inc., 07-1662 (7^th Cir., Jan 3, 2008)

If you only read only opinion by Judge Easterbrook this year, make it this one. It may be a little early to start handing out superlatives for 2008, but this Seventh Circuit decision is a real gem.

It involves the Q Ray Ionized Bracelet, which Wired Magazine crowned as one of the biggest Snake Oil Gadgets of all time. The defendants promoted the bracelet as a miracle cure for pain, claiming that the bracelet?s ionized Q Rays enhance and balance the bio-energies in its wearer, thereby eliminating the chronic pain of arthritis and other conditions. In fact, the bracelet cannot hold any electrical charge and is therefore not ionized, while Q Rays are about as common as unicorns and leprechauns. The defendants also claim that the bracelet “knows” its original owner - thereby preventing second-hand use - and that its healing properties wear off after a year or two. A smart way to ensure a steady stream of customers, even at $200 a pop.

Viewers of late-night infomercials may have bought these claims, but the Federal Trade Commission did not. It filed a civil action against the defendants, and the district court found them liable for fraud and ordered them to disgorge $16 million in profits. On appeal, the Seventh Circuit affirms. Among other things, Judge Easterbrook rejects the defendants? argument that they did not commit fraud since the placebo effect of their bracelet did provide pain relief to many customers. His witty analysis of these claims is well worth a read.

Full post as published by Decision of the Day on January 03, 2008 (boomark / email).