Space Age Products v. Gilliam

Does the ex parte issuance of a cease and desist order violate the civil rights of an MLM company.


The District court held that while there was no civil rights violation in issuing an ex parte cease and desist order, the First Amendment did require procedural safe guards which were not followed in this case. Space Age was served with a cease and desist order preventing it from marketing its products in violation of the Delaware state pyramid statute. The order did not allow for a prompt hearing on the merits of the state's claim, and when a hearing was eventually granted, it took longer than 90 days for a final decision to be rendered. A cease and desist order is a prior restraint on speech, and due process requires that the company be given a prompt opportunity to challenge the merits of the order. Because the state procedures failed to guarantee a prompt opportunity for the company to challenge the order, they were facially unlawful, precluding summary judgment against the company.

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Reference Info:Federal, 3rd Circuit, Delaware | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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