## Facts

- The Federal Trade Commission (FTC) brought an enforcement action alleging deceptive telemarketing in violation of § 5(a) of the FTC Act and the Telemarketing Sales Rule, seeking injunctive and equitable relief.
- Denyse and Michael Anderson, principals of the operation, received large commissions while investors suffered major losses.
- Before the FTC action, the Andersons placed substantial assets into a Cook Islands asset-protection trust and served as settlors and held trust roles that included authority to influence trust administration.
- The trust was structured with provisions permitting the foreign trustee to disregard directions deemed compelled by foreign court orders (a “duress” mechanism).
- The district court entered an ex parte temporary restraining order and then a preliminary injunction requiring the Andersons to transfer to the United States assets under their direct or indirect control, including offshore trust assets, and to provide an accounting.
- The Andersons sent instructions to the offshore trustee to repatriate trust assets as the injunction required.
- The offshore trustee refused, invoked the trust’s duress-related provisions, and removed the Andersons from trust roles; the trustee also declined to repatriate assets or provide the requested accounting.
- The Andersons asserted they could not comply because repatriation had become impossible.
- The district court found noncompliance with the injunction, held the Andersons in civil contempt, and ordered coercive incarceration until they purged the contempt by repatriating the assets.
- The Andersons appealed the contempt order and the determination that they retained sufficient ability to comply.

## Issues

1. Whether the Andersons established, “categorically and in detail,” that compliance with the repatriation provisions was impossible due to the offshore trustee’s refusal.
2. Whether the district court clearly erred in finding the Andersons had direct or indirect control, or sufficient influence, over offshore trust assets covered by the injunction.
3. Whether ordering coercive incarceration to compel compliance was an abuse of discretion.

## Decision

- The Ninth Circuit affirmed the civil contempt order.
- The court held the Andersons did not meet their heavy burden to prove impossibility of compliance.
- The court upheld the finding that the Andersons retained sufficient control or influence over the trust assets, or had arranged the trust structure in a way that could not excuse noncompliance.
- The court held coercive incarceration was a permissible civil contempt sanction because the district court could reasonably find the Andersons retained the ability to comply and thus could purge the contempt.

## Legal Principles

- In civil contempt, the moving party need not prove the contemnor’s ability to comply; the contemnor bears a heavy burden to prove impossibility.
- The impossibility defense requires a showing “categorically and in detail” why compliance cannot be achieved.
- Impossibility will not excuse contempt when the inability to comply is self-created, including through deliberate asset structures designed to place property beyond the effective reach of court orders.
- A court may infer continued control or practical ability to comply from a contemnor’s retained powers, prior access to trust distributions, and strategic changes to formal roles after litigation begins.
- Coercive incarceration is permissible in civil contempt when designed to compel compliance and when the contemnor has the present ability to purge the contempt by complying.

## Conclusion

The Ninth Circuit upheld civil contempt and coercive incarceration against offshore-trust settlors who failed to repatriate assets, ruling that a claimed inability to comply must be proven in detailed, credible terms and cannot rest on obstacles the contemnors created through an asset-protection trust designed to resist court authority.


Fed. Trade Comm'n v. Affordable Media, LLC, 179 F.3d 1228 (9th Cir. 1999)