Thursday, October 29, 2009, 10/29/2009 10:02:00 AM

Citing Need to Protect Certain Trade Secrets, Iowa Judge Agrees to Close Courtroom For Some Testimony and Evidence in Consumer Fraud Trial

By Todd

The Des Moines Register is reporting that a Polk County, Iowa judge agreed Tuesday to close his courtroom for parts of a consumer fraud trial brought against a Connecticut-based company by the State of Iowa, ruling that certain testimony and evidence could expose the trade secrets of a company accused of illegal sales tactics. The lawsuit alleges Vertrue Inc. sold discount buyer-club memberships to nearly 500,000 Iowans for such things as home improvement items, entertainment, fashion and fitness products.

Judge Robert Hutchison ruled that specific data about Vertrue Inc.'s membership could open it to attacks from business competitors. The Connecticut company is the subject of a major consumer fraud lawsuit filed by the Iowa attorney general's office.

Lawyers for the discount club membership company said making public internal customer statistics — such as the number who actually use their memberships, and how long they stay enrolled — would place them at a competitive disadvantage.

Hutchison said he wanted "to keep the courtroom open as much as possible," but would not allow exact numbers into the public trial. He said he would close the courtroom to the public only when testimony involved exact company data. The trial started Monday in Polk County.

"I want this information protected," he said. "I'm in hopes we won't have to close the courtroom much, but we may have to while examining a particular witness."

The lawsuit contends Vertrue used unrelated telemarketing calls to lure customers into the memberships without their knowledge. The calls usually began with pitches for products advertised on television, or other solicitations.


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