In United States v. Bayer, the Federal Trade Commission found out the hard way that it cannot invent novel legal standards in a contempt action.
The Department of Justice, litigating on behalf of the FTC, brought a civil contempt action alleging that Bayer had marketed a probiotic dietary supplement, Phillips’ Colon Health, in violation of a 2007 consent decree between the company and the government. The government sought hundreds of millions of dollars in contempt damages and $25,000 a day in fines. After a two-and-a-half week bench trial, Judge Jose Linares of the United States District Court for the District of New Jersey denied the government’s contempt motion in its entirety. The court’s decision will help clarify the law for industry and could help rein in the FTC’s overly aggressive enforcement practices.