IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

FEDERAL TRADE COMMISSION, )

)

Plaintiff, ) No. 03 C 3904

v. )

) Judge Robert W. Gettleman

KEVIN TRUDEAU, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

On June 2, 2010, this court ordered Kevin Trudeau to pay a sanction of $37,616,161 to

the Federal Trade Commission (“FTC”) as a result of Trudeau’s contemptuous failure to comply

with this court’s September 2004 Consent Order that settled a prior finding of contempt. See

FTC v. Trudeau, 708 F. Supp.2d 711 (N.D. Ill. 2010). That order has been affirmed by the court

of appeals. FTC v. Trudeau, 662 F.3d 947 (7th Cir. 2011). Trudeau has failed to comply with

ignored the order, much like he has treated all of this court’s orders, leading the FTC to move to

hold him in contempt yet again (Doc. 481).

Because Trudeau had paid nothing toward the sanction, on December 6, 2012, this court

held (Doc. 535) that the FTC has carried its initial burden to establish by clear and convincing

evidence that Trudeau has violated the court’s order, shifting the burden to Trudeau to produce

evidence of poverty or insolvency that prevents compliance. SEC v. Custable, 1999 WL 92260

at *2 (N.D. Ill. 1999) (citing Huber v. Marine Midland Bank, 51 F.3d 5, 10 (2d Cir. 1995). Such

evidence must show categorically and in detail why the alleged contemnor was unable to comply

with the court’s previous order. Id. Self-serving statements of financial hardship or indigence,

absent corroboration by third parties or financial records including tax returns, bank statements

and cancelled checks, do not satisfy this burden of production. Id. 
To carry his burden, and on order of the court, Trudeau has filed a “Sworn Financial

Statement” with supporting documents that suggests that he lacks the ability to pay anything

toward the $37 million sanction. The FTC has rightfully challenged the bona fides of Trudeau’s

statement, presenting evidence that Trudeau is living much more like a prince than the pauper he

professes to be. For example, the FTC has presented evidence that until recently Trudeau lived

in an expensive suburban home with two personal chefs and a butler. Between August and

November 2012 he purchased over $100,000 in home furnishings, over $16,000 in clothes and

close to $1,000 worth of cigars. All of these purchases were made with a credit card issued to

Trudeau. The credit card bills have been paid, but it is unclear by whom.

To bolster their argument, the FTC has served subpoenas seeking testimony and/or

documents from third parties it suspects to be related to Trudeau and/or might have information

relating to Trudeau’s ability to pay the sanction. Not surprisingly, these efforts have been met

with stiff resistance, forcing the FTC to litigate the enforcement of its subpoenas in the issuing

courts. Despite defeating all efforts to quash its subpoenas, little information has been

forthcoming. See e.g., Global Information Network, U.S. v. FTC, 2012 WL 6100472 (N.D.

Ohio Dec. 7, 2012); FTC v. Trudeau, 2012 WL 5463829 (N.D. Ohio Nov. 8, 2012); Babanko v.

FTC, No. 1:12-MC-00006 (S.D. Ohio March 22, 2012).

As part of its efforts to challenge Trudeau’s claim of inability to pay, the FTC has also

issued a number of subpoenas from this court. First, it has subpoenaed Trudeau’s current

attorneys, Winston & Strawn (“Winston”), seeking information regarding Trudeau’s payments

for legal services. Second, the FTC has subpoenaed the Law Offices of Mark Lane (“Lane”), a

self-professed specialist in protecting his “client’s assets from creditors and lawsuits while, at the

2
same time allowing them to retain control over the assets and the income they produce.”1

 The

Lane subpoena, like the Winston subpoena, seeks only documents relating to payments made to

Lane or Winston by or on behalf of Trudeau. Finally, the FTC has issued a subpoena to Website

Solutions U.S.A. Inc.(“WSU”). 

Because all of the subpoenaed parties have raised objections and none have produced any

information or otherwise complied with the subpoenas, the FTC has, pursuant to Fed. R. Civ. P.

45(c)(2)(B)(I), moved to compel their compliance. Winston and Lane have raised objections and

arguments that are about as valid as the misrepresentations on Trudeau’s contemptuous

infomercials. Therefore, for the reasons set forth below, the motion is granted as to all three

subpoenaed parties.

BACKGROUND

The Winston and Lane subpoenas seek three categories of documents:

(1) All retainer agreements referring or relating to compensation for work or

service performed for or provided to any Trudeau-Affiliated Person or any

Trudeau-Affiliated Entity [Trudeau-Affiliated Person and Trudeau-Affiliated

Entities are broadly defined in the subpoena];

(2) All documents created on or after June 2, 2010, evidencing payment received

or promised, or the source of payment received or promised, for work or services

performed or to be performed for any Trudeau-Affiliated Person or any TrudeauAffiliated Entity; and

(3) Documents sufficient to establish the balance of funds at all times in any

account controlled directly or indirectly for the benefit of or on behalf of any

Trudeau-Affiliated Entity or Trudeau-Affiliated Person.

The subpoenas have a specific limitation indicating that the FTC is not seeking

confidential information relating to Trudeau’s motive for seeking legal representation, litigation

1

These are Lane’s own description of his services as an “asset protector.”

3
strategy or the specific nature of any legal services provided, or the substance of any

attorney/client communication other than the limited financial portions of any retainer agreement

that do not reveal such information. The subpoenas specifically invited Winston and Lane to

redact from the documents produced “all portions thereof that reveal the motive in seeking legal

representation, litigation strategy or the specific natures of services provided or to be provided.”

Winston responded to the subpoena by letter from Trudeau’s primary counsel, Kimball

Anderson, to FTC attorneys Mora and Cohen. Anderson’s letter indicated that Winston had no

documents responsive to categories (1) or (3). With respect to category (2), the letter indicated

that Winston represents Kevin Trudeau and no other Trudeau affiliated entity as defined in the

subpoena. With respect to Trudeau personally, Winston objected to producing any category (2)

documents based on: (1) Rule 1.6(a) of the Illinois Rules of Professional Conduct; (2) the request

was overly broad, unduly burdensome, ambiguous, vague, and not calculated to lead to the

discovery of admissible evidence; (3) the request was cumulative to information the FTC had

obtained by subpoenaing Trudeau’s banks; and (4) it was inappropriate to subpoena opposing

counsel.

Lane initially responded by objecting to the subpoena because it was: (1) unduly

burdensome, vague, ambiguous, not reasonably calculated to lead to admissible evidence and

cumulative to previous subpoenas issued by the FTC; and (2) it sought production of confidential

client information. Lane did indicate that it “holds no cash or other assets owed to, or belonging

to the judgment debtor.”2

2

Lane initially responded by letter from Marc Lane. During the course of briefing the

instant motion, Lane has been represented by Winston.

4
DISCUSSION

As an initial matter, all subpoenaed parties have argued that the subpoenas are invalid

because the FTC has not complied with Fed. R. Civ. P. 69(a). As the FTC points out, because

none of the subpoenaed parties raised this argument in their responses or objections, the

argument is technically waived. See Ott v. City of Milwaukee, 682 F.3d 552, 558 (7th Cir. 2012)

(Rule 45 requires the recipient of a subpoena to raise all objections at once, rather than in

staggered batches, so that discovery does not become a game.). Objections must be raised before

the earlier of the time specified for compliance or 14 days after the subpoena is served. Id.; Fed.

R. Civ. P. 45(c)(2)(B). 

Even if not waived, the argument has no merit. Rule 69(a)(1) provides that “a money

judgment is enforced by a writ of execution, unless the court directs otherwise. (Emphasis

added). In the original September 2004 Sanction Order, the terms of which were incorporated

into the court’s June 2, 2010 Order, the court specifically directed (and authorized) the FTC to

monitor compliance using “procedures prescribed by Fed. R. Civ. P. 30, 31, 33, 34, 36 and 45.” 

Thus, the court has “ordered otherwise.”

Moreover, even if the court had not authorized the FTC to follow federal discovery rules,

Rule 69(a)(2) provides that “in aid of the judgment . . . the judgment creditor may obtain

discovery from any person . . . as provided in these rules or by the procedure of the state where

the court is located.” (Emphasis added). As noted by then District Judge Rovner in Evans v.

Chicago Football Franchise Limited Partnership, 127 FRD 492, 493 (N.D. Ill. 1989), “this

language clearly contemplates that plaintiff has a choice between using the federal discovery

rules and using the practice of the state.”

5
Any argument that the FTC must first commence execution proceedings under Illinois

law by serving Trudeau with a citation to discover assets before conducting discovery in aid of

the judgment is unavailing and unsupported by Dexia Credit Local v. Rogan, 629 F.3d 612 (7th

Cir. 2011), the case on which the subpoenaed parties rely. Dexia did state that under Illinois law

a citation to discover assets initiates supplemental proceedings, but it was not faced with the

instant question, nor did it hold that a citation to discover assets must be served before a

judgment creditor could seek discovery in aid of a judgment (as opposed to execution), and it

certainly never held that a judgment creditor specifically ordered by the court to use the federal

discovery rules to monitor a contemnor’s compliance with a sanction order must do so. Blaw

Knox Corp. v. AMR Indus., Inc., 130 FRD 400 (E.D. Wis. 1990), the other case on which the

subpoenaed parties rely, dooms their argument. In reviewing Rule 69(a), the Blaw Knox court

determined that the Rule contained a distinction between execution and discovery, and held that

“a judgment creditor is limited to the collection options provided by the state,” but may obtain

discovery under either federal or state law. Id. at 402. Thus, the court rejected the argument that

discovery under the federal rules had to be preceded by an attempt at execution under state law. 

Id. Under Blaw Knox, a judgment creditor may seek discovery under the federal rules at any

time post-judgment. Any assets of the judgment debtor found during such discovery are not,

however, subject to a lien that would be created if execution proceedings had begun under state

law. See e.g., Peterson v. Farrakhan, 2008 WL 656267 at *3 (N.D. Ind. March 5, 2008).

Winston and Lane next argue that compliance with the FTC’s subpoenas would compel

them to violate their ethical obligations under Illinois Rule of Professional Responsibility 1.6(a),

which provides in part that a lawyer “shall not reveal information relating to the representation

6
of a client unless the client gives informed consent, the disclosure is impliedly authorized in

order to carry out the representation, or the disclosure is permitted by paragraph (b) or required

by paragraph (c).” Even if Winston and Lane are correct that the source of payments made to

them by or on behalf of Trudeau or any Trudeau-affiliated person or entity constitutes

“information relating to the representation of a client,”3 paragraph 1.6(b)(6) specifically permits

disclosure of such information “to comply with other law or a court order.” Fed. R. Civ. P. 45

constitutes a “law” that requires Winston and Lane to reveal otherwise confidential, nonprivileged client information, and a subpoena issued under Rule 45 is a court order that compels

compliance absent some other valid objection. See SEC v. Sassano, 274 FRD 495, 497 (S.D.

N.Y. 2011). “Rule 1.6 is not intended to, and does not apply to judicial proceedings in which a

lawyer may be required to produce evidence concerning a client.” Avoletta v. Danforth, 2012

WL 3113151 at *1 (D. Conn. 2012) (applying Connecticut rule virtually identical to Illinois

rule). Thus, Winston and Lane have fulfilled their ethical obligation under Rule 1.6(a) by

bringing the matter to this court’s attention and must, if ordered, reveal the information. 

Finally, Winston and Lane have raised a number of the usual boilerplate objections, none

of which carry any merit. The subpoenas are not overbroad, but actually are limited in nature. 

Compliance would not be unduly burdensome, particularly since the information sought is most

likely available within the firms’ computer systems. The subpoenas specifically disclaim any

attempt to discover confidential information, and even if such information was called for, neither

Winston nor Lane has identified such privileged information in a log as required by Fed. R. Civ.

3

For an thorough discussion of the breath of Rule 1.6 see Edward W. Feldman, Be

Careful What You Reveal: Model Rule of Professional Conduct 1.6, ABA Litigation Magazine,

Vol. 38 No. 4 Summer/Fall 2012.

7
P. 45(d)(2)(A). As for Winston’s argument that taking discovery of opposing counsel is rarely

appropriate, the court finds that it is appropriate in the instant case, given Trudeau’s efforts to

avoid paying the sanction and his apparent ability to retain prestigious counsel and live a life of

luxury. 

Accordingly, for the reasons set forth above, the motion to compel Winston and Lane to

comply is granted. Winston and Lane are ordered to produce forthwith all records showing

payments and source of payments received for its legal services on behalf of Kevin Trudeau or

any Trudeau-affiliated entity or Trudeau-affiliated person as defined in the subpoenas. WSU is

ordered to comply forthwith with the subpoena and provide all responsive financial information

and bank statements.

CONCLUSION

For the reasons set forth above, the motion to compel Winston & Strawn, the Law

Offices of Marc Lane, and Website Solutions USA to comply with subpoenas is granted.

ENTER: March 6, 2013

__________________________________________

Robert W. Gettleman

United States District Judge

8