Federal Trade Commission v. Chapman
714 F.3d 1211
10th Cir.2013Background
- Beginning in 2007 Kansas defendants marketed grant-related services nationwide via telemarketers.
- Consumers were offered the Grant Guide for $69, with postcards and a toll-free message containing misrepresentations about grant likelihood.
- The second stage charged $800-$1100 for grant-research services, producing lists often including non-existent or ineligible grants.
- In the third stage, telemarketing calls offered grant-writing and coaching; Chapman participated from 2008 to 2009 and was identified as an instructor for Grant Writer’s Institute.
- Chapman assisted in multiple ways (research, website content, questionnaires, training) and proposed new ideas such as contests; most of her business came from Kansas defendants (80-90% by mid-2009) and she billed $1,682,950 for services from 2007–2009.
- The district court found Chapman violated 16 C.F.R. § 310.3(b) and ordered a permanent injunction and $1,682,950 in damages; post-judgment motions to alter or amend or for remittitur were denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Chapman provide substantial assistance to the Kansas defendants? | Chapman argues no substantial assistance; not involved in marketing. | Assistance need not be directly tied to misrepresentations; conduct was more than incidental. | Chapman provided substantial assistance. |
| Did Chapman know or consciously avoid knowing of the misrepresentations? | District court had insufficient evidence of actual knowledge. | Evidence shows multiple indications she knew or consciously avoided knowing. | Chapman knew or consciously avoided knowing. |
| Was the post-judgment denial of alter/remittitur proper? | Damages should be reduced due to late awareness of misconduct. | District court acted within its discretion; no manifest injustice. | Post-judgment denial affirmed. |
Key Cases Cited
- Ryan v. Am. Natural Energy Corp., 557 F.3d 1152 (10th Cir. 2009) (de novo review of legal conclusions in bench trial)
- Monge v. RG Petro-Mach. (Grp.) Co. Ltd., 701 F.3d 598 (10th Cir. 2012) (discretion in ruling on Rule 59(e) motions and remittitur)
- M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d 753 (10th Cir. 2009) (highly deferential standard for remittitur and reconsideration)
- Vining ex rel. Vining v. Enterprise Fin. Grp., Inc., 148 F.3d 1206 (10th Cir. 1998) (remittitur standard; abuse of discretion review)
- Brumark Corp. v. Samson Res. Corp., 57 F.3d 941 (10th Cir. 1995) (discretion in denial of reconsideration)