Ninth Circuit Affirms $120 Million FTC Judgment After Defendants Fail to Comply With Settlement Agreement Requiring Lien on Real Estate
Posted by: Andy Lustigman
April 18, 2008

In FTC v. Seasilver USA, Inc., et. al. (CV-S-03-0676-RLH) (D. Nevada) defendants entered into a standard settlement agreement providing for injunctive relief and a monetary judgment, representing the approximate gross sales of the product, which was one hundred twenty million dollars. The Stipulated Final Judgment provided that all but three million dollars of the one hundred twenty million would be suspended provided certain monies were paid and security interests in property were provided. In the interim between the defendants executed the settlement agreement and the Commission approved the settlement, certain of the property listed was foreclosed upon and defendants were unable to provide the promised liens. The FTC therefore entered judgment for the full $120 million. The Ninth Circuit Court of Appeals affirmed, ruling that defendants should have expected that changing conditions could make their performance more difficult, and the $120 million amount was not barred as punitive.

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