Federal Trade Commission v. Ultralife Fitness, Inc et al, No. 2:2008cv07655 - Document 6 (C.D. Cal. 2008)

Court Description: FINAL JUDGMENT AND PERMANENT INJUNCTION by Judge Dale S. Fischer, in favor of Federal Trade Commission against Neil P. Wardle for $50,000.00; Pace Mannion for $50,000.00; and Christopher J Wardle for $50,000.00. Neil P. Wardle shall tr ansfer to the Internal Revenue Service one hundred two thousand nine hundred twenty-eight dollars ($102,928), and Defendant Pace Mannion shall transfer to the Internal Revenue Service one hundred thousand eight hundred fortysevendollars ($1 00,847) as payment for each Defendants federal income tax liability for the 2006 tax year. Within five (5) days of such payments, Neil P. Wardle and Pace Mannion shall provide proof of the payments to the FTC. IT IS FURTHER ORDERED that each Defendan t and Relief Defendant, within five (5) business days of receipt of this Order as entered by the Court, must submit to the Commission a truthful sworn statement acknowledging receipt of this Order.IT IS FURTHER ORDERED that each party shall bear its own costsand attorneys fees incurred in connection with this action. IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order. Related to: Stipulation for Settlement 5 (MD JS-6, Case Terminated)., (shb)

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Federal Trade Commission v. Ultralife Fitness, Inc et al 1 Doc. 6 WILLIAM BLUMENTHAL General Counsel 2 3 4 5 RAYMOND E. MCKOWN, Bar # 150975 Federal Trade Commission 10877 Wilshire Blvd., Ste. 700 Los Angeles, CA 90024 (310) 824-4343 (voice) (310) 824-4380 (fax) rmckown@ftc.gov JS 6 6 Attorney for Plaintiff FTC 7 8 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 9 10 11 12 13 14 15 16 17 18 ) ) ) Plaintiff, ) ) v. ) ) CV. CV08-07655 DSF (PJWx) ULTRALIFE FITNESS, INC., dba Pure) Health Laboratories, Pure Health ) FINAL JUDGMENT AND ORDER FOR Labs, and UltraBurn PM; and TRU ) PERMANENT INJUNCTION AND OTHER GENIX LABORATORIES, LLC, dba ) EQUITABLE RELIEF eFitness Clubhouse and eCurves ) Clubhouse; ) ) NEIL P. WARDLE; CHRISTOPHER J. ) WARDLE; and PACE MANNION; ) ) Defendants. ) ) FEDERAL TRADE COMMISSION 19 20 21 22 23 24 25 26 27 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd Dockets.Justia.com 1 The parties, Plaintiff Federal Trade Commission and Defendants 2 Ultralife Fitness, Inc., dba Pure Health Labs, and UltraBurn PM; 3 Tru Genix Laboratories, LLC, dba eFitness Clubhouse and eCurves 4 Clubhouse; Neil P. Wardle; Christopher J. Wardle; and Pace Mannion; 5 having agreed in the Stipulated Final Judgment and Order for 6 Permanent Injunction and Other Equitable Relief to entry of this 7 Order, hereby request that the Court enter the same to resolve all 8 matters in dispute in this action. 9 of the Summons and Complaint. 10 11 Defendants have waived service FINDINGS 1. This Court has jurisdiction over the subject matter of 12 this action and all parties hereto. 13 of California is proper. 14 15 16 2. Venue in the Central District The activities of Defendants are in or affecting commerce, as defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 3. The Complaint states a claim upon which relief may be 17 granted against Defendants under Sections 5(a), 12, and 13(b) of 18 the FTC Act, 15 U.S.C. §§ 45(a), 52, and 53(b), and Section 907(a) 19 of the Electronic Fund Transfer Act, 15 U.S.C. § 1693e(a), and 20 Section 205.10(b) of Regulation E, 12 C.F.R. Section 205.10(b). 21 4. Defendants waive: (a) all rights to seek review or 22 otherwise challenge or contest the validity of this Order; (b) any 23 claim Defendants may have against the Commission, its employees, 24 representatives, or agents; (c) all claims under the Equal Access 25 to Justice Act, 28 U.S.C. § 2412, as amended by Pub. L. 104-121, 26 110 Stat. 847, 863-64, and (d) any rights to attorneys’ fees that 27 may arise under said provision of law. 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 2 1 6. The FTC and Defendants stipulate and agree to this Order, 2 without trial or adjudication of any issue of fact or law, to 3 settle and resolve all matters in dispute arising from the 4 Complaint to the date of entry of this Order. 5 admit any of the allegations set forth in the Complaint, other than 6 jurisdictional facts. 7 7. Entry of this Order is in the public interest. DEFINITIONS 8 9 10 11 Defendants do not For purposes of this Order, the following definitions shall apply: 1. “Billing Information” means any data that enables any 12 person to access a consumer’s account, such as a credit card, 13 checking, savings, share or similar account, utility bill, mortgage 14 loan account, or debit card. 15 16 2. “Clearly and Conspicuously” means: a. in print communications, the message shall be in a 17 type size and location sufficiently noticeable for an ordinary 18 consumer to read and comprehend it, in print that contrasts with 19 the background against which it appears; 20 b. in communications disseminated orally, the message 21 shall be delivered in a volume and cadence sufficient for an 22 ordinary consumer to hear and comprehend it; 23 c. in communications made through an electronic medium 24 (such as television, video, radio, and interactive media such as 25 the Internet, online services and software), the message shall be 26 presented simultaneously in both the audio and visual portions of 27 the communication. 28 visual or audio means, the message may be made through the same In any communication presented solely through Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 3 1 means in which the communication is presented. In any 2 communication disseminated by means of an interactive electronic 3 medium such as software, the Internet, or online services, a 4 disclosure must be unavoidable and presented prior to the consumer 5 incurring any financial obligation. 6 delivered in a volume and cadence sufficient for an ordinary 7 consumer to hear and comprehend it. 8 a size and shade, with a degree of contrast to the background 9 against which it appears and shall appear on the screen for a Any audio message shall be Any visual message shall be of 10 duration and in a location, sufficiently noticeable for an ordinary 11 consumer to read and comprehend it; and 12 d. regardless of the medium used to disseminate it, the 13 message shall be in understandable language and syntax. 14 contrary to, inconsistent with, or in mitigation of the message 15 shall be used in any communication. 16 3. Nothing “Competent and Reliable Scientific Evidence” means tests, 17 analyses, research, studies, or other evidence based on the 18 expertise of professionals in the relevant area, that have been 19 conducted and evaluated in an objective manner by persons qualified 20 to do so, using procedures generally accepted in the profession to 21 yield accurate and reliable results. 22 4. “Defendants” means Ultralife Fitness, Inc., dba Pure 23 Health Laboratories, Pure Health Labs, and UltraBurn PM; Tru Genix 24 Laboratories, LLC, dba eFitness Clubhouse and eCurves Clubhouse; 25 Neil P. Wardle; Christopher J. Wardle; and Pace Mannion. 26 27 5. “Business Entity Defendants” means Ultralife Fitness, Inc., dba Pure Health Laboratories, Pure Health Labs, and UltraBurn 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 4 1 PM; and Tru Genix Laboratories, LLC, dba eFitness Clubhouse and 2 eCurves Clubhouse. 3 4 6. “Individual Defendants” means Neil P. Wardle, Christopher J. Wardle, and Pace Mannion. 5 7. “Endorsement” means any advertising message (including 6 verbal statements, demonstrations, or depictions of the name, 7 signature, likeness or other identifying personal characteristics 8 of an individual or the name or seal of an organization) which 9 message consumers are likely to believe reflects the opinions, 10 beliefs, findings, or experience of a party other than the 11 sponsoring advertiser. 12 findings, or experience the message appears to reflect will be 13 called the endorser and may be an individual, group or institution. 14 8. 15 The party whose opinions, beliefs, “Food” means: a. 16 articles used for food or drink for man or other animals; 17 b. chewing gum; and 18 c. articles used for components of any such article. 19 9. 20 “Drug” means: a. articles recognized in the official United States 21 Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United 22 States, or official National Formulary, or any supplement to any of 23 them; 24 b. articles intended for use in the diagnosis, cure, 25 mitigation, treatment, or prevention of disease in man or other 26 animals; 27 28 c. articles (other than food) intended to affect the structure or any function of the body of man or other animals; and Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 5 1 d. articles intended for use as a component of any 2 article specified in clause (a), (b), or (c); but does not include 3 devices or their components, parts, or accessories. 4 10. “Device” means an instrument, apparatus, implement, 5 machine, contrivance, implant, in vitro reagent, or other similar 6 or related article, including any component, part, or accessory, 7 which is: 8 9 a. recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them; 10 b. intended for use in the diagnosis of disease or 11 other conditions, or in the cure, mitigation, treatment, or 12 prevention of disease, in man or other animals, or 13 c. intended to affect the structure or any function of 14 the body of man or other animals, and which does not achieve any of 15 its principal intended purposes through chemical action within or 16 on the body of man or other animals and which is not dependent upon 17 being metabolized for the achievement of any of its principal 18 intended purposes. 19 11. “Negative Option Feature” means, in an offer or 20 agreement to sell or provide any product or service, a provision 21 under which the consumer’s silence or failure to take an 22 affirmative action to reject products or services or to cancel the 23 agreement is interpreted by the seller or provider as acceptance of 24 the offer. 25 are not limited to: (i) free or introductory price trial offers in 26 which the consumer receives a product or service for free or at a 27 nominal or introductory price for an initial period and will incur 28 an obligation to pay or pay a greater amount for the product or Agreements with Negative Option Features include, but Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 6 1 service if he or she does not take affirmative action to cancel, 2 reject, or return the product or service before the end of that 3 period; (ii) continuity plans in which, subsequent to the 4 consumer's agreement to the plan, the seller or provider 5 automatically ships products to a consumer unless the consumer 6 notifies the seller or provider within a certain time not to ship 7 the products; and (iii) automatic renewal plans in which the seller 8 or provider automatically renews the agreement and charges the 9 consumer unless the consumer cancels before the renewal. 10 12. “Preauthorized Electronic Fund Transfer” as defined by 11 the Electronic Fund Transfer Act, 15 U.S.C. § 1693a(9), means an 12 electronic fund transfer authorized in advance to recur at 13 substantially regular intervals. 14 I. 15 PROHIBITION ON MISREPRESENTATIONS IT IS THEREFORE ORDERED that Defendants and Defendants’ 16 successors, assigns, officers, agents, servants, salespersons, 17 employees, independent contractors, attorneys, and those persons in 18 active concert or participation with them, whether acting directly 19 or through any sole proprietorship, partnership, limited liability 20 company, corporation, subsidiary, branch, division, or other 21 entity, who receive actual notice of this Order by personal service 22 or otherwise, in connection with the advertising, promoting, 23 offering for sale, or sale of any dietary supplement, food, drug, 24 device, or health-related program or service, or of any product or 25 service by means of a negative option feature, are hereby 26 permanently restrained and enjoined from misrepresenting, or 27 assisting others in misrepresenting, expressly or by implication, 28 any material fact, including but not limited to: Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 7 1 A. That a product or service is offered on a “free,” “risk- 2 free,” “trial,” or “no obligation” basis, or words of similar 3 import, denoting or implying the absence of any obligation on the 4 part of the recipient of the offer to affirmatively act in order to 5 avoid charges; 6 B. The amount that a consumer will be charged or billed; 7 C. That a consumer will not be charged or billed; 8 D. The timing or manner of any charge or bill (including but 9 10 11 12 13 not limited to the date of the charge and whether it will be a credit card charge or a checking account debit); E. The length of any trial period that consumers receive before being charged or billed; F. Through, among other things, mailings, email, billings, 14 credit card charges and checking account debits, that a consumer 15 purchased or agreed to purchase a product or service, or that a 16 transaction has been authorized by a consumer; 17 18 19 20 21 22 23 24 25 26 G. That use of a product burns a significant amount of fat while the user sleeps; H. That use of a product can cause substantial weight loss with no additional effort required; I. That use of a product can cause weight loss of two pounds or more a week for a month or more without diet or exercise; and J. That use of a product can safely enable consumers to lose more than three pounds per week for more than four weeks. II. REQUIRED DISCLOSURES IT IS FURTHER ORDERED that Defendants and Defendants’ 27 successors, assigns, officers, agents, servants, salespersons, 28 employees, independent contractors, attorneys, and those persons in Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 8 1 active concert or participation with them, whether acting directly 2 or through any sole proprietorship, partnership, limited liability 3 company, corporation, subsidiary, branch, division, or other 4 entity, who receive actual notice of this Order by personal service 5 or otherwise, in connection with the advertising, promoting, 6 offering for sale, or sale of any product or service, are hereby 7 permanently restrained and enjoined from failing to clearly and 8 conspicuously disclose, before consumers are asked to pay money, 9 submit consideration, or reveal billing information: all fees and 10 costs; all material restrictions, limitations, or conditions 11 applicable to the purchase, receipt, or use of the product or 12 service that is the subject of the offer (including any promotion 13 associated with free products or services, or products or services 14 available on a trial basis); and all material terms and conditions 15 of any offer with a negative option feature, including but not 16 limited to: 17 A. The dollar amount of the first payment and when it will be 18 charged, withdrawn, or become due; the dates or frequency (e.g., 19 monthly, quarterly) of all subsequent charges or payment(s); and 20 the dollar amount or range of costs of all subsequent charges or 21 payments; 22 B. If a withdrawal will be made or a charge assessed at the 23 end of a trial period unless the consumer cancels: this fact; when 24 the trial period begins; the length of the trial period; the 25 specific steps and means by which a cancellation request must be 26 submitted; and the date by or time period within which a 27 cancellation request must be received to avoid a charge; 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 9 1 C. If products are automatically shipped to a consumer or a 2 membership, subscription, or agreement for products or services 3 that are offered on a periodic basis is automatically renewed 4 unless the consumer provides notification within a certain time not 5 to ship or renew: this fact; the length of the subsequent renewal 6 period; the manner in which a notice not to ship or renew must be 7 submitted; the date by or time period within which a notice not to 8 ship or renew must be received to avoid shipment or renewal (e.g., 9 two weeks after the consumer is advised of an upcoming shipment); 10 and the telephone number, email address, or street address to which 11 such a notice must be directed; 12 D. The fact, if true, that the billing information 13 Defendants already possess, either because the consumer previously 14 provided it to a Defendant, or a Defendant obtained it from another 15 source, will be used to bill or charge the consumer; and 16 E. All material conditions, limitations and restrictions on 17 the ability of the consumer to use any product or service that is 18 offered “free,” “risk-free,” on a “trial,” “discounted,” “reduced 19 in price,” or “no obligation” basis, or words of similar import 20 denoting or implying the absence of any obligation on the part of 21 the recipient of such offer to pay or pay a greater amount for such 22 product or service or to take affirmative action to avoid incurring 23 payment or increased payment obligations, whether such product or 24 service is the subject of the offer to the consumer or such product 25 or service is offered to a consumer who accepts an offer for other 26 products or services. 27 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 10 1 2 III. PROHIBITIONS RELATING TO THE USE OF BILLING INFORMATION IT IS FURTHER ORDERED that Defendants and Defendants’ 3 successors, assigns, officers, agents, servants, salespersons, 4 employees, independent contractors, attorneys, and those persons in 5 active concert or participation with them, whether acting directly 6 or through any sole proprietorship, partnership, limited liability 7 company, corporation, subsidiary, branch, division, or other 8 entity, who receive actual notice of this Order by personal service 9 or otherwise, in connection with the advertising, promoting, 10 offering for sale, or sale of any product or service, are hereby 11 permanently restrained and enjoined from directly or indirectly 12 using billing information to obtain payment without first obtaining 13 the express informed consent of the consumer, which shall include 14 express informed consent to be charged for the product or service 15 using a specified billing account, and the clear and conspicuous 16 disclosure of the information identified in Section II, above, in 17 close proximity to the consumer’s express consent to purchase such 18 products or services. 19 with a negative option feature, the following requirements must be 20 met to evidence express informed consent: 21 22 23 A. In connection with an offer or agreement One of the following means must be used to evidence that the consumer has given express informed consent: 1. Obtaining the consumer’s express written 24 authorization to purchase the product or service that is the 25 subject of the transaction and the consumer’s authorization to 26 assess a charge against a specified account for payment. 27 authorization must include the consumer's signature (the term 28 "signature" includes a verifiable electronic or digital form of Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd Such 11 1 signature, to the extent such form of signature is recognized as a 2 valid signature under applicable federal law or state contract 3 law); or 4 2. Obtaining the consumer’s express oral authorization 5 to purchase the product or service that is the subject of the 6 transaction and the consumer’s authorization to assess a charge 7 against a specified account for payment that is audio-recorded, as 8 follows: 9 a. the recording must evidence that the consumer, 10 during that transaction, at a minimum, has provided the last four 11 (4) digits of the account number to be charged; 12 13 b. requirements of Section II, above, have been complied with; 14 15 c. the recording must include the entirety of the d. the recording can be identified and located by transaction; 16 17 the recording must evidence that the disclosure either the consumer’s name or telephone number; and 18 e. a copy of the recording is provided upon request 19 to the consumer, the consumer’s bank, credit or debit card company 20 or other billing entity, state attorney general or consumer 21 protection agency, and the Commission; or 22 B. For any transaction involving a service, within the lesser 23 of ten days after the date of the transaction or half the time of 24 any trial period, the consumer must be sent written confirmation of 25 the transaction, identified in a clear and conspicuous manner on 26 the outside of the envelope, via first class mail that includes all 27 the information that is required to be disclosed pursuant to 28 Section II, above; Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 12 1 C. For any transaction involving a product, the first product 2 shipment must contain written confirmation of the transaction that 3 includes all of the information that is required to be disclosed 4 pursuant to Section II, above, and a clear and conspicuous 5 statement of the procedures by which the consumer can cancel or 6 obtain a refund; and 7 D. At least thirty (30) days prior to renewing a consumer’s 8 membership, subscription, or agreement to purchase for any service 9 (in the case of a membership, subscription, or agreement whose term 10 is six months or longer) and prior to the submission for payment of 11 a consumer’s billing information for such services, a consumer must 12 be sent written confirmation of such renewal, identified in a clear 13 and conspicuous manner on the outside of the envelope, via first 14 class mail, that includes all of the information that is required 15 to be disclosed pursuant to Subsections II.A, B, and D of this 16 Order, above, and a clear and conspicuous statement of the 17 procedures by which the consumer can cancel such renewal. 18 19 IV. MONITORING TO ENSURE COMPLIANCE WITH THE ORDER IT IS FURTHER ORDERED that Defendants and Defendants’ 20 successors, assigns, officers, agents, servants, salespersons, 21 employees, independent contractors, attorneys, and those persons in 22 active concert or participation with them, whether acting directly 23 or through any sole proprietorship, partnership, limited liability 24 company, corporation, subsidiary, branch, division, or other 25 entity, who receive actual notice of this Order by personal service 26 or otherwise, in connection with the advertising, promoting, 27 offering for sale, or sale of any product or service, are hereby 28 permanently restrained and enjoined from failing to take reasonable Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 13 1 steps sufficient to monitor and ensure that all Defendants’ agents, 2 representatives, employees, independent contractors, and contract 3 telemarketers comply with the requirements of Sections I-III 4 and V-IX. 5 to the following: 6 A. Such reasonable steps shall include but are not limited Establishing and following a procedure for receiving and 7 responding to consumer complaints that allege conduct that 8 constitutes a violation of the FTC Act or this Order; 9 10 B. in which each employee or independent contractor is involved; 11 12 13 Ascertaining the number and nature of consumer complaints C. Promptly and fully investigating any consumer complaint; D. Creating and retaining records demonstrating compliance and 14 with this Section, as required by Section XV, including but not 15 limited to, copies of all procedures for receiving and responding 16 to consumer complaints, all documents relating to investigations of 17 consumer complaints, and all documents demonstrating how Defendants 18 responded to or addressed each consumer complaint; 19 Provided however, that this subsection does not authorize or 20 require Defendants to take any action that violates any federal, 21 state, or local law. 22 23 V. PROHIBITIONS RELATING TO REFUNDS AND CANCELLATIONS IT IS THEREFORE ORDERED that Defendants and Defendants’ 24 successors, assigns, officers, agents, servants, salespersons, 25 employees, independent contractors, attorneys, and those persons in 26 active concert or participation with them, whether acting directly 27 or through any sole proprietorship, partnership, limited liability 28 company, corporation, subsidiary, branch, division, or other Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 14 1 entity, who receive actual notice of this Order by personal service 2 or otherwise, in connection with the advertising, promoting, 3 offering for sale, or sale of any product or service, are hereby 4 permanently restrained and enjoined: 5 A. From failing to disclose, clearly and conspicuously, 6 before consumers are asked to pay money, submit consideration, or 7 reveal billing information: (1) if a representation is made about a 8 refund or cancellation policy, all material terms and conditions of 9 such policy; or (2) if there is a policy of not making refunds or 10 11 cancellations; this fact; B. If a policy allowing consumers to cancel or obtain a 12 refund has been disclosed to the consumer, from failing to honor 13 any request that complies with such policy; provided however, with 14 respect to any money-back guarantee offered by Defendants, from 15 failing to provide, within seven (7) business days of a Defendant’s 16 receipt of a valid refund request, a full refund of the purchase 17 price of the product or service; and 18 C. From misrepresenting, or assisting others in 19 misrepresenting, expressly or by implication, the terms and 20 conditions of any refund or cancellation policy or policies, 21 including but not limited to, that consumers who accept an offer 22 can easily cancel to avoid the assessment of a charge. 23 24 VI. COMPLIANCE WITH THE ELECTRONIC FUND TRANSFER ACT IT IS FURTHER ORDERED that Defendants and Defendants’ 25 successors, assigns, officers, agents, servants, salespersons, 26 employees, independent contractors, attorneys, and those persons in 27 active concert or participation with them, whether acting directly 28 or through any sole proprietorship, partnership, limited liability Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 15 1 company, corporation, subsidiary, branch, division, or other 2 entity, who receive actual notice of this Order by personal service 3 or otherwise, in connection with the advertising, promoting, 4 offering for sale, or sale of any product or service, are hereby 5 permanently restrained and enjoined, in connection with any 6 consumer who purchases any product or service subsequent to the 7 date of this Order and who uses a debit card or other means of 8 electronic funds transfer, from: 9 A. Failing to obtain written authorization for preauthorized 10 electronic fund transfers from a consumer’s account before 11 initiating any preauthorized electronic fund transfer, as required 12 by Section 907(a) of the Electronic Funds Transfer Act, 15 U.S.C. 13 § 1693e(a), and Section 205.10(b) of Regulation E, 12 C.F.R. 14 § 205.10(b), as more fully set out in Section 205.10(b) of the 15 Federal Reserve Board’s Official Staff Commentary to Regulation E, 16 12 C.F.R. § 205.10(b) Supp. I, or as it may hereafter be amended; 17 and 18 B. Failing to maintain procedures reasonably adapted to avoid 19 an unintentional failure to obtain written authorization for a 20 preauthorized electronic fund transfer, as set out in Section 21 205.10(b) of the Federal Reserve Board’s Official Staff Commentary 22 to Regulation E, 12 C.F.R. § 205.10(b) Supp. I, or as it may 23 hereafter be amended. 24 VII. 25 FALSE WEIGHT-LOSS REPRESENTATIONS PROHIBITED IT IS FURTHER ORDERED that Defendants and Defendants’ 26 successors, assigns, officers, agents, servants, salespersons, 27 employees, independent contractors, attorneys, and those persons in 28 active concert or participation with them, whether acting directly Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 16 1 or through any sole proprietorship, partnership, limited liability 2 company, corporation, subsidiary, branch, division, or other 3 entity, who receive actual notice of this Order by personal service 4 or otherwise, in connection with the advertising, labeling, 5 manufacturing, promoting, offering for sale, or sale of TruGenix 6 Hoodia, Ultralife PM, Pure Health Laboratories Hoodia, UltraBurn PM 7 (with Hoodia), or any dietary supplement, food, or non-prescription 8 drug or device, are hereby permanently restrained and enjoined from 9 making any representation, expressly or by implication, including 10 through the use of endorsements or product names, that such 11 product: 12 A. Causes substantial weight loss with no additional effort, 13 including, but not limited to, reducing caloric intake or 14 increasing physical activity; or 15 B. 16 VIII. 17 Causes permanent weight loss. REPRESENTATIONS PROHIBITED UNLESS TRUE AND SUBSTANTIATED IT IS FURTHER ORDERED that Defendants and Defendants’ 18 successors, assigns, officers, agents, servants, salespersons, 19 employees, independent contractors, attorneys, and those persons in 20 active concert or participation with them, whether acting directly 21 or through any sole proprietorship, partnership, limited liability 22 company, corporation, subsidiary, branch, division, or other 23 entity, who receive actual notice of this Order by personal service 24 or otherwise, in connection with the advertising, labeling, 25 manufacturing, promoting, offering for sale, or sale of any dietary 26 supplement, food, drug, device, or health-related program or 27 service, are hereby permanently restrained and enjoined from making 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 17 1 any representation, expressly or by implication, including through 2 the use of endorsements or product names: 3 A. That any such product, service, or program: 4 1. causes weight loss; 5 2. causes weight loss with no additional effort, 6 including, but not limited to, reducing caloric intake or 7 increasing physical activity; 8 3. 9 within a particular time frame; causes users to lose any specified amount of weight 10 4. reduces or eliminates fat; 11 5. reduces or curbs appetite; 12 6. increases metabolism; or 13 7. causes permanent weight loss; or 14 B. 15 safety, or side effects of any such product, service, or 16 program; Regarding the health benefits, performance, efficacy, 17 18 unless, the representation is true, not misleading, and, at the 19 time the representation is made, Defendants possess and rely upon 20 competent and reliable scientific evidence that substantiates the 21 representation. 22 IX. FDA APPROVED CLAIMS 23 IT IS FURTHER ORDERED that: 24 A. Nothing in this order shall prohibit Defendants from 25 making any representation for any drug that is permitted in 26 labeling for such drug under any tentative final or final standard 27 promulgated by the Food and Drug Administration, or under any new 28 drug application approved by the Food and Drug Administration; Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 18 1 B. Nothing in this order shall prohibit Defendants from 2 making any representation for any product that is specifically 3 permitted in labeling for such product by regulations promulgated 4 by the Food and Drug Administration pursuant to the Nutrition 5 Labeling and Education Act of 1990; and 6 C. Nothing in this order shall prohibit Defendants from 7 making any representation for any device that is permitted in 8 labeling for such device under any new medical device application 9 approved by the Food and Drug Administration. 10 11 X. MONETARY JUDGMENT IT IS FURTHER ORDERED that judgment for equitable monetary 12 relief in favor of the Federal Trade Commission against Defendants, 13 jointly and severally, is hereby entered in the amount of nine 14 million nine hundred six thousand four hundred seventy-six dollars 15 ($9,906,476), which is the amount of consumer injury that the 16 Federal Trade Commission alleges was caused by Defendants. 17 However, this judgment shall be suspended, subject to the 18 provisions of Section XI, upon the completed payments identified in 19 Subsections X.A, X.B, X.C, and X.D: 20 A. Defendant Neil P. Wardle shall pay fifty thousand dollars 21 ($50,000) to the Commission. 22 this Order he shall deposit twenty-five thousand dollars ($25,000) 23 into an escrow account held by attorney Kenneth R. Ivory. 24 five (5) days after entry of this Order by the Court, the first 25 twenty-five thousand dollar ($25,000) installment shall be paid to 26 the Commission. 27 by the Court, Neil P. Wardle shall pay a second twenty-five 28 thousand dollar ($25,000) installment to the Commission. Upon Neil P. Wardle’s execution of Within Within ninety (90) days after entry of this Order Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 19 1 B. Defendant Pace Mannion shall pay fifty thousand dollars 2 ($50,000) to the Commission. 3 Order he shall deposit fifty thousand dollars ($50,000) into an 4 escrow account held by attorney Kenneth R. Ivory. 5 days after entry of this Order by the Court the fifty thousand 6 dollars ($50,000) shall be paid to the Commission; 7 C. Upon Pace Mannion’s execution of this Within five (5) Defendant Christopher J. Wardle shall pay fifty thousand 8 dollars ($50,000) to the Commission. 9 execution of this Order he shall deposit twenty-five thousand Upon Christopher J. Wardle’s 10 dollars ($25,000) into an escrow account held by attorney Kenneth 11 R. Ivory. 12 Court, the first twenty-five thousand dollar ($25,000) installment 13 shall be paid to the Commission. 14 entry of this Order by the Court, Christopher J. Wardle shall pay a 15 second twenty-five thousand dollar ($25,000) installment to the 16 Commission; 17 D. Within five (5) days after entry of this Order by the Within ninety (90) days after After Neil P. Wardle and Pace Mannion make the payments to 18 the Commission required by Subsections X.A and X.B, but no later 19 than two hundred seventy (270) days after entry of this Order by 20 the Court, Neil P. Wardle shall transfer to the Internal Revenue 21 Service one hundred two thousand nine hundred twenty-eight dollars 22 ($102,928), and Defendant Pace Mannion shall transfer to the 23 Internal Revenue Service one hundred thousand eight hundred forty- 24 seven dollars ($100,847) as payment for each Defendant’s federal 25 income tax liability for the 2006 tax year. 26 of such payments, Neil P. Wardle and Pace Mannion shall provide 27 proof of the payments to the FTC. Within five (5) days 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 20 1 E. If, on the two hundred seventy-first (271st) day after 2 entry of this Order by the Court, Defendant Neil P. Wardle has not 3 made the full payment to the IRS described in Subsection X.D, he 4 shall pay the amount of such nonpayment or underpayment, along with 5 the amount of any interest or credit he receives on account of such 6 nonpayment or underpayment, to the FTC within two hundred eighty- 7 five (285) days after entry of this Order; 8 F. If, on the two hundred seventy-first (271st) day after 9 entry of this Order by the Court, Defendant Pace Mannion has not 10 made the full payment to the IRS described in Subsection X.D, he 11 shall pay the amount of such nonpayment or underpayment, along with 12 the amount of any interest or credit he receives on account of such 13 nonpayment or underpayment, to the FTC within two hundred eighty- 14 five (285) days after entry of this Order; 15 G. If Defendant Neil P. Wardle or Defendant Pace Mannion fail 16 to pay the amounts each is required to pay pursuant to Subsections 17 X.E and X.F, then judgment in the amount of nine million nine 18 hundred six thousand four hundred seventy-six dollars ($9,906,476) 19 shall be entered and will become immediately due and payable, less 20 any amounts already paid, against that defaulting Defendant. 21 Provided however, that such defaulting Defendant shall have a 22 fourteen (14) day period within which to cure his default. 23 H. Defendants shall pay all amounts due to the FTC under this 24 Order in cash by electronic funds transfer to the Commission, or to 25 such agent as the Commission may direct, pursuant to instructions 26 provided by the Commission. 27 totaling one hundred fifty thousand dollars ($150,000) shall be 28 made notwithstanding that Defendants have made no admission of Defendants’ payments to the FTC Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 21 1 liability and the Court has made no such finding in connection with 2 this Order; 3 I. All funds paid pursuant to this Section shall be deposited 4 into a fund administered by the Commission or its agent to be used 5 for equitable relief, including but not limited to restitution to 6 consumers and any attendant expenses for the administration of such 7 equitable relief. 8 consumers is wholly or partially impracticable or funds remain 9 after restitution is completed, the Commission may apply any In the event that direct restitution to 10 remaining funds for such other equitable relief (including consumer 11 information remedies) as it determines to be reasonably related to 12 Defendants’ practices as alleged in the Complaint. 13 used for such equitable relief will be deposited with the United 14 States Treasury as disgorgement. 15 challenge the Commission’s choice of remedies under this Section. 16 Defendants shall have no right to contest the manner of 17 distribution chosen by the Commission. 18 under the judgment herein shall be deemed a payment of any fine, 19 penalty, or punitive assessment; 20 J. Any funds not Defendants shall have no right to No portion of any payment Defendants acknowledge and agree that all money paid 21 pursuant to this Order is irrevocably paid to the Commission for 22 purposes of settlement between the parties, and Defendants shall 23 make no claim or demand for return of the funds, directly or 24 indirectly, through counsel or otherwise, and in the event of 25 bankruptcy of any Defendant, such Defendant acknowledges that the 26 funds are not part of the debtor’s estate, nor does the estate have 27 any claim or interest therein; 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 22 1 K. Defendants shall provide the Commission, or its agent, 2 within thirty (30) days of such a request, the name, last known 3 address, telephone number, e-mail address, date of purchase, total 4 amount paid to Defendants, amount of any full or partial refund, 5 and the complete file record, including computer records and 6 correspondence for each consumer who paid Defendants or any entity 7 owned or controlled, in full or in part, by Defendants, for dietary 8 supplements, fitness programs, exercise devices, or other products 9 or services marketed or sold by Defendants from February 2005 10 through the date of entry of this Order, and any further 11 information the Commission deems necessary to effectuate any 12 restitution program for consumers; 13 L. Unless already done so, each Defendant is hereby required, 14 in accordance with 31 U.S.C. § 7701, to furnish to the Commission 15 their respective taxpayer identifying numbers (social security 16 numbers or employer identification numbers), which will be used for 17 purposes of collecting and reporting on any delinquent amount 18 arising out of such Defendant’s relationship with the government; 19 M. Any Redress Administrator shall destroy all records 20 relating to the distribution of this judgment six (6) years after 21 the last of the funds are credited, delivered to the Commission, or 22 delivered to the FTC Treasury account, provided that no records 23 shall be destroyed unless and until a representative of the 24 Commission has received and approved the final accounting report 25 pertaining to Defendants’ payment. 26 accordance with disposal methods and procedures to be specified by 27 the Commission. Records shall be destroyed in The Commission may, in its sole discretion, 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 23 1 require that such records, in whole or in part, be transferred, in 2 lieu of destruction, to the Commission; 3 N. Pursuant to Section 604(1) of the Fair Credit Reporting 4 Act, 15 U.S.C. § 1681b(1), any consumer reporting agency may 5 furnish a consumer report concerning any Defendant to the FTC, 6 which shall be used for purposes of collecting and reporting on any 7 delinquent amount arising out of this Order. 8 9 10 XI. RELIANCE ON DISCLOSURES IT IS FURTHER ORDERED that: A. The Commission’s agreement to this Order is expressly 11 premised upon the truthfulness, accuracy, and completeness of the 12 individual and corporate financial statements and other documents 13 and information provided by Defendants as identified in the 14 February 20, 2008 letter from defense counsel Kenneth Ivory to 15 Commission counsel Raymond E. McKown. 16 material information relied upon by the Commission in negotiating 17 and agreeing to the terms of this Order; 18 B. Such data constitute If, upon motion by the Commission, this Court finds that a 19 Defendant has (1) failed to disclose any material asset, 20 materially, misrepresented the value of any asset, or made any 21 other material misrepresentation in or omission from the submitted 22 financial statements, documents, or information identified in the 23 February 20, 2008 letter from defense counsel Kenneth Ivory to 24 Commission counsel Raymond E. McKown, or (2) failed to make timely 25 payment pursuant to Subsections X.A, X.B, or X.C, then, as to that 26 Defendant, judgment in the amount of nine million nine hundred six 27 thousand four hundred seventy-six dollars ($9,906,476) shall be 28 entered and will become immediately due and payable, less any Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 24 1 amounts already paid; provided however, that in all other respects 2 this Order shall remain in full force and effect unless otherwise 3 modified by the Court; 4 C. Any proceedings instituted under this Section XI are in 5 addition to, and not in lieu of, any other civil or criminal 6 remedies as may be provided by law, including any other proceedings 7 that the FTC may initiate to enforce this Order; and 8 9 D. For purposes of Sections X and XI, and any subsequent proceedings to enforce payment, the Defendants agree that the facts 10 as alleged in the Complaint filed in this action shall be taken as 11 true, without further proof, in any subsequent litigation filed by 12 or on behalf of the Commission to collect any unpaid amount or 13 otherwise enforce its rights pursuant to this Order, including a 14 non-dischargeability complaint filed in any bankruptcy case. 15 XII. 16 17 PROHIBITION ON COLLECTION OF PAYMENTS AND DISCLOSURE OF CUSTOMER INFORMATION IT IS FURTHER ORDERED that Defendants and Defendants’ 18 successors, assigns, officers, agents, servants, salespersons, 19 employees, independent contractors, attorneys, and those persons in 20 active concert or participation with them, whether acting directly 21 or through any sole proprietorship, partnership, limited liability 22 company, corporation, subsidiary, branch, division, or other 23 entity, who receive actual notice of this Order by personal service 24 or otherwise, in connection with the advertising, promoting, 25 offering for sale, or sale of any dietary supplement or fitness 26 products, are hereby permanently restrained and enjoined from: 27 28 A. Causing any withdrawal, assessment of a fee, or payments to be made against any consumer account, or otherwise causing Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 25 1 collection of, or attempts to collect, payment, directly or 2 indirectly, from a consumer, for any order for any such product 3 offered or provided to consumers where the purported authorization 4 for such order occurred prior to the effective date of this Order; 5 B. Selling, renting, leasing, transferring or otherwise 6 disclosing the name, address, birth date, telephone number, email 7 address, Social Security number, credit or debit card number, bank 8 account number, or other financial or identifying personal 9 information of any person from whom or about whom such information 10 was obtained in connection with activities alleged in the 11 Complaint; and 12 C. Benefitting from or using the name, address, birth date, 13 telephone number, Social Security number, credit or debit card 14 number, bank account number, or other financial or identifying 15 personal information of any person from whom or about whom any 16 Defendant obtained such information in connection with activities 17 alleged in the Complaint; 18 Provided however, that such financial or identifying personal 19 information may be disclosed to a law enforcement agency or as 20 required by any law, regulation, or court order. 21 22 23 24 XIII. COMPLIANCE MONITORING IT IS FURTHER ORDERED that, for the purpose of monitoring and investigating compliance with any provision of this Order: A. Within fifteen (15) days of receipt of written notice from 25 a representative of the Commission, Neil P. Wardle, Christopher J. 26 Wardle, Pace Mannion, Ultralife Fitness, Inc., and Tru Genix 27 Laboratories, LLC, shall submit additional written reports, sworn 28 to under penalty of perjury; produce documents for inspection and Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 26 1 copying; appear for deposition; and/or provide entry during normal 2 business hours to any business location in such Defendant’s 3 possession or direct or indirect control, to inspect the business 4 operation; 5 B. In addition, the Commission is authorized to monitor 6 compliance with this Order by all other lawful means, including but 7 not limited to the following: 8 9 10 1. obtaining discovery from any person, without further leave of Court, using the procedures prescribed by Fed. R. Civ. P. 30, 31, 33, 34, 36, and 45; 11 2. posing as consumers and suppliers to Neil P. Wardle, 12 Christopher J. Wardle, Pace Mannion, Ultralife Fitness, Inc., or 13 Tru Genix Laboratories, LLC, Defendants’ employees, or any other 14 entity managed or controlled in whole or in part by Neil P. Wardle, 15 Christopher J. Wardle, Pace Mannion, Ultralife Fitness, Inc., or 16 Tru Genix Laboratories, LLC, without the necessity of 17 identification or prior notice; and 18 C. Neil P. Wardle, Christopher J. Wardle, Pace Mannion, 19 Ultralife Fitness, Inc., and Tru Genix Laboratories, LLC, shall 20 permit representatives of the Commission to interview any employer, 21 consultant, independent contractor, representative, agent, or 22 employee who has agreed to such an interview, relating in any way 23 to any conduct subject to this Order. 24 have counsel present; 25 The person interviewed may Provided however, that nothing in this Order shall limit the 26 Commission’s lawful use of compulsory process, pursuant to Sections 27 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1, to obtain any 28 documentary material, tangible things, testimony, or information Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 27 1 relevant to unfair or deceptive acts or practices in or affecting 2 commerce (within the meaning of 15 U.S.C. § 45(a)(1)). 3 4 5 6 7 XIV. IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Order may be monitored: A. For a period of five (5) years from the date of entry of this Order, 8 9 COMPLIANCE REPORTING BY DEFENDANTS 1. Neil P. Wardle, Christopher J. Wardle, and Pace Mannion shall notify the Commission of the following: 10 a. any changes in residence, mailing addresses, and 11 telephone numbers of said Defendants, within ten (10) days of the 12 date of such change; 13 b. any changes in employment status (including 14 self-employment) of Neil P. Wardle, Christopher J. Wardle, or Pace 15 Mannion, and any change in the ownership interest of Neil P. 16 Wardle, Christopher J. Wardle, or Pace Mannion, in any business 17 entity, within ten (10) days of the date of such change. 18 notice shall include the name and address of each business that 19 such Defendant is affiliated with, employed by, creates or forms, 20 or performs services for; a statement of the nature of the 21 business; and a statement of said Defendant’s duties and 22 responsibilities in connection with the business or employment; and 23 c. Such any change in Neil P. Wardle, Christopher J. 24 Wardle, or Pace Mannion’s name or use of any aliases or fictitious 25 names; 26 2. Neil P. Wardle, Christopher J. Wardle, Pace Mannion, 27 Ultralife Fitness, Inc., and Tru Genix Laboratories, LLC, shall 28 notify the Commission of any changes in the corporate structure of Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 28 1 any Business Entity Defendant or of any company or organization 2 that Neil P. Wardle, Christopher J. Wardle, or Pace Mannion 3 directly or indirectly controls, or has an ownership interest in, 4 that may affect compliance obligations arising under this Order, 5 including but not limited to a dissolution, assignment, sale, 6 merger, or other action that would result in the emergence of a 7 successor entity; the creation or dissolution of a subsidiary, 8 parent, or affiliate that engages in any acts or practices that are 9 subject to this Order; the filing of a bankruptcy petition; or a 10 change in the corporate name or address, at least thirty (30) days 11 prior to such change, provided that, with respect to any proposed 12 change in the corporation about which Defendants learn of less than 13 thirty (30) days prior to the date such action is to take place, 14 Defendants shall notify the Commission as soon as is practicable 15 after obtaining such knowledge; 16 B. One hundred eighty (180) days after the date of entry of 17 this Order, Neil P. Wardle, Christopher J. Wardle, Pace Mannion, 18 Ultralife Fitness, Inc., and Tru Genix Laboratories, LLC, each 19 shall provide a written report to the FTC, sworn to under penalty 20 of perjury, setting forth in detail the manner and form in which 21 they have complied and are complying with this Order. 22 shall include, but not be limited to: 23 24 1. This report for Neil P. Wardle, Christopher J. Wardle, and Pace Mannion: 25 a. 26 addresses, and telephone numbers; 27 b. 28 their then-current residence address, mailing their then-current employment and business addresses and telephone numbers, a description of the business Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 29 1 activities of each such employer or business, and the title and 2 responsibilities of said Individual Defendants for each such 3 employer or business; and 4 5 c. subparagraph A of this Section XIV; 6 2. 7 8 13 a copy of each acknowledgment of receipt of this Order obtained pursuant to Section XVI; b. written expressions of consumers’ consent required by Section XII.A; and 11 12 for all Defendants: a. 9 10 any other changes required to be reported under c. any other changes required to be reported under subparagraph A of this Section XIV; C. For the purposes of this Order, Defendants shall, unless 14 otherwise directed by the Commission’s authorized representatives, 15 mail all written notifications to the Commission to: 16 Associate Director, Division of Enforcement Federal Trade Commission 601 New Jersey Avenue, N. W. Washington, D.C. 20580 RE: FTC v. Ultralife Fitness et al. 17 18 19 D. For purposes of the compliance reporting and monitoring 20 required by this Order, the Commission is authorized to communicate 21 directly with Defendants. 22 23 XV. RECORD KEEPING IT IS FURTHER ORDERED that, for a period of eight (8) years 24 from the date of entry of this Order, in connection with any 25 business where Neil P. Wardle, Christopher J. Wardle, Pace Mannion, 26 Ultralife Fitness, Inc., or Tru Genix Laboratories, LLC, is the 27 majority owner of the business or directly or indirectly manages or 28 controls the business, each Defendant and its agents, employees, Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 30 1 officers, corporations, successors, and assigns, and those persons 2 in active concert or participation with them who receive actual 3 notice of this Order by personal service or otherwise, are hereby 4 restrained and enjoined from failing to create and retain the 5 following records: 6 A. Accounting records that reflect the cost of products or 7 services sold, revenues generated, and the disbursement of such 8 revenues; 9 B. Personnel records accurately reflecting: the name, 10 address, and telephone number of each person employed in any 11 capacity by such business, including as an independent contractor; 12 that person’s job title or position; the date upon which the person 13 commenced work; and the date and reason for the person’s 14 termination, if applicable; 15 C. Customer files containing the names, addresses, phone 16 numbers, dollar amounts paid, quantity of items or services 17 purchased, and description of items or services purchased, to the 18 extent such information is obtained in the ordinary course of 19 business; 20 D. Complaint and refund requests (whether received directly, 21 indirectly or through any third party) and any responses to those 22 complaints or requests; 23 24 25 26 27 28 E. Copies of all sales scripts, training materials, advertisements, or other marketing materials; F. Each tape recording of a telemarketing call made pursuant to Section III.A.2, above; and G. All records and documents necessary to demonstrate full compliance with each provision of this Order, including but not Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 31 1 limited to, copies of all procedures for receiving and responding 2 to consumer complaints, all documents relating to investigations of 3 consumer complaints, all documents demonstrating how Defendants 4 responded to or addressed each consumer complaint as required by 5 Section IV, all documents evidencing whether refunds were provided 6 as required by Section V.B, all acknowledgments of receipt of this 7 Order as required by Sections XVI and XVII, all reports submitted 8 to the FTC pursuant to Section XIV, and all written expressions of 9 consumers’ consent as required by Sections III.A.1 and XII.A. 10 11 XVI. DISTRIBUTION OF ORDER BY DEFENDANTS IT IS FURTHER ORDERED that, for a period of five (5) years 12 from the date of entry of this Order, Defendants shall deliver 13 copies of this Order as directed below: 14 A. Business Entity Defendants: Ultralife Fitness, Inc., and 15 Tru Genix Laboratories, LLC, must deliver a copy of this Order to 16 all of its principals, officers, directors, and managers. 17 Business Entity Defendant also must deliver a copy of this Order to 18 all of its employees, agents, and representatives who engage in 19 conduct related to the subject matter of this Order. 20 personnel, delivery shall be within five (5) days of service of 21 this Order upon Defendants. 22 occur prior to them assuming their responsibilities; 23 B. Each For current For new personnel, delivery shall Individual Defendants as control person: For any business 24 that Neil P. Wardle, Christopher J. Wardle, or Pace Mannion 25 controls, directly or indirectly, or in which any Individual 26 Defendant has a majority ownership interest, such Individual 27 Defendant must deliver a copy of this Order to all principals, 28 officers, directors, and managers of that business. Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd Said 32 1 Individual Defendants must also deliver copies of this Order to all 2 employees, agents, and representatives of that business who engage 3 in conduct related to the subject matter of this Order. 4 current personnel, delivery shall be within five (5) days of 5 service of this Order upon Defendants. 6 shall occur prior to them assuming their responsibilities; 7 C. For For new personnel, delivery Neil P. Wardle, Christopher J. Wardle, or Pace Mannion as 8 employee or non-control person: 9 Individual Defendant is not a controlling person of a business but 10 otherwise engages in conduct related to the subject matter of this 11 Order, the Individual Defendant must deliver a copy of this Order 12 to all principals and managers of such business before engaging in 13 such conduct; and 14 D. For any business where such Neil P. Wardle, Christopher J. Wardle, Pace Mannion, 15 Ultralife Fitness, Inc., and Tru Genix Laboratories, LLC, must 16 secure a signed and dated statement acknowledging receipt of this 17 Order, within thirty (30) days of delivery, from all persons 18 receiving a copy of the Order pursuant to this Section. 19 20 XVII. ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANTS IT IS FURTHER ORDERED that each Defendant and Relief 21 Defendant, within five (5) business days of receipt of this Order 22 as entered by the Court, must submit to the Commission a truthful 23 sworn statement acknowledging receipt of this Order. 24 such a form is provided as Attachment A. 25 XVIII. 26 27 An example of COSTS AND ATTORNEYS’ FEES IT IS FURTHER ORDERED that each party shall bear its own costs and attorneys’ fees incurred in connection with this action. 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 33 1 2 XIX. RETENTION OF JURISDICTION IT IS FURTHER ORDERED that this Court shall retain 3 jurisdiction of this matter for purposes of construction, 4 modification, and enforcement of this Order. 5 6 7 IT IS SO ORDERED. 8 9 Date: 12/5/08 10 Honorable Dale S. Fischer United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 34 1 ATTACHMENT A 2 3 UNITED STATES DISTRICT COURT 4 _______________ DISTRICT OF ______________ 5 6 7 8 9 10 11 12 13 14 _________________________________________ ) ) ) ) Plaintiff, ) ) ) v. ) ) DEFENDANT, et al. ) ) Defendants. ) _________________________________________ ) FEDERAL TRADE COMMISSION, CIVIL ACTION NO. AFFIDAVIT OF DEFENDANT -------ACKNOWLEDGING RECEIPT OF ORDER 15 [Name of defendant], being duly sworn, hereby states and affirms as follows: 16 17 18 19 20 21 22 23 24 1. My name is_______________________. My current residence address is ______________________________________________________. I am a citizen of the United States and am over the age of eighteen. I have personal knowledge of the facts set forth in this Affidavit. 2. I am a defendant in FTC v. Defendant, et al. (United States District Court for the _____________ District of _____________). 3. On [date], I received a copy of the [state full name of the Final Order as it appears on the Order itself], which was signed by the Honorable [name of U.S. District Judge] and entered by the Court on [date of entry of Order]. I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. Executed on [date], at [city and state]. ___________________________________ [Full name of defendant] 25 26 27 28 State of ____________________, City of ____________________ Subscribed and sworn to before me this _____ day of _________, 2005___. _____________________________ Notary Public My Commission Expires: Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 35 1 _____________________________ 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Y:\%Ultralife Fitness\February 2008\UL jan2008 Consent.wpd 36

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