CLERK, US. DISTRICT COURT lOHN D. GRAUBERT Acting General Counsel 500 Pennsy Washin tor Tel: Fax: 20 ,,,-,,,, U' V~"..Y.YYY.".. lvanla Ave. N.W., Rm, NJ-3212 I D.C. 20580 ;26-2812 2174,2070,3087,2095, 3627,3289 17f;-27.;d KENNETH H. ABBE (Local Counsel) California Bar # 172416 Federal Trade Commssion 10877 Wilshire Boulevard, Suite 700 Send Enter - Closed - .IS-51JS-6 - JS-21~~-3 - Scan Only- && Attorneys r 1 laintiff FEJE E COMMISSION 3 hy: (I " ' tj c;b, \ ! UNITED STATES DISTRICT COURT 3 \ CENTRAL DISTRICT OF CALIFORNIA .Q . .t , ..,. :3 WESTERN DIVISION C3 " Hon. Dickran Tevrizian -. ,. I CV 03-3700-DT (PJWX) v.
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Stipulated Final Order for Permanent Injunction and Settlement of ...€¦ · CV 03-3700-DT (PJWX) v. Plaintiff, the Federal Trade Commission ("FTC" or "Commission") filed a 3mpl'aint
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is an officer, director, employee, consultant, contractor,
vendor, or supplier to or for any JOL Settling Company,
or their successors, assigns, subsidiaries, divisions, or
affiliates that are owned or controlled by any JOL Settling
Company, in any manner, directly or indirectly, including,
but not limited to, through any person, entity, corporation,
subsidiary, division, trade name, or other
device; or
receives any compensation, in any form, including but not
limited to, any payment for the use of intellectual
property or any other service, salary, royalty, dividend, or
commission, from Halsey Holdings or any JOL Settling
Company, or from their successors, assigns, subsidiaries,
divisions, or affiliates that are owned or controlled by
Halsey Holdings or any JOL Settling Company, in any
manner, directly or indirectly, including, but not limited
to; through any person, entity, corporation, partnership,
subsidiary, division, trade name, or other device, provided
however, nothing in this Subparagraph XV.B.2(e) shall
Page 19 of 29
preclude legally obligated annuity payments by Boston
Life and Annuity Company Ltd., a British Virgin Islands
corporation, pursuant to private annuity dated September
6,2002 in favor of the AGB Ocean 1999 Trust, Cititrust
International as Trustee;
then the suspended judgment entered pursuant to paragraph XII1.A of
this Final Judgment shall become immediately due and payable by
Defendant Halsey Holdings, and interest computed at the rate
prescribed under 28 U.S.C. 4 196 1, as amended, shall immediately
begin to accrue on the unpaid balance; provided, however, that in all
other respects this Final Judgment shall remain in full force and effect
unless otherwise ordered by the Court.
Subject to Subparagraph B, above, nothing in this Order shali be
deemed or construed to prohibit Halsey Holdings from complying with
any legal obligation existing prior to January 27,2005.
In any subsequent proceedings to enforce payment pursuant to this
paragraph, including but not limited to a non-dischargeability
complaint filed in a bankruptcy proceeding, Halsey Holdings agrees
not to contest any of the allegations in the Commission's Complaint.
COOPERATION WITH COMMISSION
XVI.
IT IS FURTHER ORDERED that Defendant must reasonably and in good
i t h cooperate with the Commission in connection with this action or any
ubsequent investigations related to or associated with the transactions or
ccurrences that are the subject of the Commission's Complaint. Halsey Holdings
hall use its best efforts to identify, make available, and secure the testimony and
ssistance of current and former officers, directors;agents, or employees as part of
le aforesaid cooperation. Halsey Holdings acknowledges, understands, and agrees
Page 20 of 29
~ ~ - - ~ p ~ p~
lat such cooperation shall include, but not be limited to, the following:
Appearing for interviews as may reasonably be requested by the
Commission;
Responding to all reasonable inquiries of the Commission;
Providing all documents, records, and other tangible evidence
reasonably requested by the Commission;
Providing truthful declarations, affidavits, certifications, and written
testimony that may be reasonably requested by the Commission; and
Appearing and providing oral testimony at any trial, deposition, or
other proceeding. Halsey Holdings agrees to accept service by
overnight delivery of any subpoena to appear and provide testimony.
be foregoing cooperation shall be upon reasonable written notice by the
:ommission. Halsey Holdings' failure to cooperate as required herein constitutes a
laterial breach of the settlement between the parties and a violation of this Order.
F, upon motion by the Commission after written notice and a five (5) calendar day
pportunity to cure, the Court finds that Halsey Holdings has failed to cooperate
easonably and in good faith with the Commission as provided.for in this
'aragraph, Three Million Dollars ($3,000,000) of the suspended judgment entered
lursuant to Paragraph X1II.A. of this Final Judgment shall become immediately
.ue and payable by Halsey Holdings, and interest computed at the rate prescribed
.nder 28 U.S.C. 5 1961, as amended, shall immediately begin to accrue on the
,npaid balance; provided, however, that in all other respects this Final Judgment
hall remain in full force and effect unless otherwise ordered by the Court; and
rovided further, that proceedings instituted under this provision would be in
ddition to, and not in lieu of, any other civil or criminal remedies as may be
~rovided by law, including but not limited to contempt proceedings, or any other
~roceedings that the Commission or the United States may initiate to enforce this
5nal Judgment. In any subsequent proceedings to enforce payment pursuant to
Page 21 of 29
iis Paragraph, including but not limited to a non-dischargeability complaint filed
1 a bankruptcy proceeding, Halsey Holdings agrees not to contest any of the
llegations in the Commission's Complaint.
COMPLIANCE REQUIREMENTS
Employees' Compliance with Order
XVII.
IT IS FURTHER ORDERED that Halsey Holdings, directly or through any
orporation, partnership, subsidiary, division, trade name, or other device, shall:
A. Take reasonable steps sufficient'to monitor and ensure that all
employees and agents engaged in sales, marketing, advertising,
promotion, or other customer service or policy functions comply with
paragraphs I through XI of this Order. Such steps shall include
adequate monitoring of all advertisements, promotions, sales
presentations, and other oral and written communication with
consumers regarding such products. Halsey Holdings, at a minimum,
shall:
Conduct periodic monitoring of representations concerning any
product made by persons engaged in sales or other customer
service functions, including any representations made orally or
through electronic communications;
Conduct periodic monitoring of representations made in
advertising for the product;
Maintain a procedure for receiving; maintaining, and
responding to consumer complaints; and
Maintain a procedure for taking action against any employee or
agent who engages in any conduct prohibited by Paragraphs I
through XI of this Order, including, but not limited to, warning
each such employee or agent upon the first instance of non-
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compliance arid termination, as specified below in
Subparagraph B of this Paragraph.
B. Terminate the employment of any employee or agent who engages in
any conduct prohibited by Paragraphs I through XI of this Order once
Halsey Holdings know or should know that such person is or has been
engaged in.such conduct after having been warned of a previous
instance of non-compliance.
Compliance Reporting
XVIII.
IT IS FURTHER ORDERED that, in order that compliance with the
~rovisions of this order may be monitored:
A. For a period of five (5) years from the date of entry of this Order,
Halsey Holdings shall notify the Commission of any proposed change
in its corporate structure that may affect compliance obligations
arising under this Order, including but not limited to a dissolution,
assignment, sale, merger, or other action that would result in the
emergence of a successor corporation; the creation or dissolution of a
subsidiary, parent, or affiliate that engages in any acts or practices
subject to this Order; the filing of a bankruptcy petition; or a change in
the corporate name or address, at least thirty (30) days prior to such
change, provided that, with respect to any proposed change in the
corporation about which Halsey Holdings learns less than thirty (30)
days prior to the date such action is to take place, the Defendant shall
notify the Commission as soon as is practicable after obtaining such
knowledge.
B. Sixty (60) days after the date of entry of this Order, Halsey Holdings
shall provide a written report to the Commission, sworn to under
penalty of perjury, setting forth in detail the manner and form in which
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they have complied and are complying with this Order. This report
shall include, but not be limited to:
1. The then-current business addresses, mailing addresses,
telephone numbers, a description of its business activities, and
identification of all products that Defendant advertises or sells;
2. A copy of each acknowledgment of receipt of this Order . obtained by Halsey Holdings pursuant to Paragraph XXI;
3. A statement describing the manner in which Defendant has
complied and is complying with each provision of this Order;
and
4. Any changes required to be reported pursuant to Subparagraph
A above.
C: For purposes of this Order, Halsey Holdings shall, unless otherwise
directed by the Commission's authorized representatives, mail all
written notifications to the Commission to:
Associate Director for Advertising Practices
Federal Trade Commission
600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580
Re: FTC v. Braswell et a]., No. CV 03-3700-DT (PJWx)
D. For purposes of the compliance reporting required by this Paragraph,
the Commission is authorized to communicate in writing directly with
Halsey Holdings, with a copy to Halsey Holdings' counsel of record
herein, or such substitute counsel as Halsey Holdings may advise
Plaintiff. Halsey Holdings shall be given the opportunity to have
counsel present for any oral communications.
Page 24 of 29
Compliance Monitoring
XIX.
IT IS FURTHER ORDERED that, for the purpose of monitoring and
vestigating compliance with any provision of this Order:
A. Within ten (10) days, or such longer period as may be reasonable but
not to exceed thirty (30) days, of receipt of written notice from a
representative of the Commission, Halsey Holdings shall submit
additional written reports, sworn to under penalty of pe jury; produce
documents for inspection and copying; appear for deposition; and/or
provide entry during normal business hours to any business location in
its possession or direct or indirect control to inspect the business
operation;
B. In addition, the Commission is authorized to monitor compliance with
this Order by all other lawfid means, including but not limited to the
following:
1. obtaining discovery from any person, without fixther leave of
court, using the procedures prescribed by Fed. R. Civ. P. 30,3 1,
33,34,36, and 45;
2. posing as consumers or suppliers to Halsey Holdings, its
employees, or any other entity managed or controlled in whole
or in part by Halsey Holdings without the necessity of
identification or prior notice; and
C. Halsey Holdings shall permit representatives of the Commission to
interview any employer, consultant, independent contractor,
representative, agent, or employee who has agreed to such an
interview, relating in any way to any conduct subject to this Order.
The person interviewed may have counsel present.
Provided, however, that nothing in this Order shall limit the Commission's
Page 25 of 29
.wful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act,
5 U.S.C. $ 5 49,57b-1, to obtain any documentary material, tangible things,
stimony, or information relevant to unfair or deceptive acts or practices in or
ffecting commerce (within the meaning of 15 U.S.C. 5 45(a)(l)).
RECORD KEEPING PROVISIONS
XX.
IT IS FURTHER ORDERED that, for a period of five (5) years fiom the
ate of entry of this Order, Halsey Holdings and its agents, employees, officers,
orporations, successors, and assigns, and those persons in active concert or
articipation with it who receive actual notice of this Order by personal service or
thenvise, are hereby restrained and enjoined fiom failing to continue to create and
:tain the following records:
Accounting records that reflect the cost of any goods or services sold,
revenues generated, and disbursement of such revenues;
Personnel records accurately reflecting: the name, address, and
telephone number of each person employed in any capacity by such
business, including as an independent contractor; that person's job
title or position; the date upon which the person commenced work;
and the date and reason for the person's termination, if applicable;
Customer files containing the names, addresses, telephone numbers,
dollar amounts paid, quantity of items or services purchased, and
description of items or services purchased, to the extent such
information is obtained in the brdinary course of business;
Complaints and refund requests (whether received directly, indirectly,
or though any third party) and all records showing any responses to
those complaints or requests;
Copies of all advertisements, promotional materials, sales scripts,
training materials, or other marketing materials utilized in the
Page 26 of 29
advertising, marketing, promotion, offering for sale, distribution or
sale of any covered product;
All materials that were relied upon in making any representations
contained in the materials identified in Subparagraph E above,
including all documents evidencing or referring to the accuracy of any
claim therein or to the efficacy of any covered product, including, but
not limited to, all tests, reports, studies, demonstrations, as well as all
evidence in Halsey Holdings' possession that confirms, contradicts,
qualifies, or calls into question the accuracy of such claims regarding
the efficacy of such covered product;
Records accurately reflecting the name, address, and telephone
number of each manufacturer or laboratory engaged in the
development or creation of any testing obtained for the purpose of
advertising, marketing, promoting, offering for sale, distributing, or
selling any product; and
All records and documents necessary to demonstrate full compliance
with each provision of this Order, including but not limited to, copies
of acknowledgements of receipt of this Order and all reports submitted
to the FTC pursuant to this Order.
DISTRIBUTION OF ORDER
XXI.
IT IS FURTHER ORDERED that, Halsey Holdings, for a period of five (5)
ears from the date of entry of this Order, shall deliver this Order to each of its
rincipals, officers, directors, and managers. In the case of current principals,
fficers, directors, and managers, the Order shall be delivered within five (5) days
f service of this Order upon Halsey Holdings. For new principals, officers,
irectors, and managers, delivery shall occur prior to their assuming their position
r responsibilities. Halsey Holdings must secure a signed and dated statement
:knowledging receipt of the Order, within thirty (30)'days of delivery, from all
Page 27 of 29
om receiving a copy of the Order pursuant to this Paragraph. ACKNOWLEDGMENT OF RECEIPT OF ORDER
m. IT IS FURTHER ORDERED that Defendant, w i b five (5) business days
ceipt of this Order as entered by the Court, must execute and submit to the
ssion a sworn statement acknowledging receipt of this Order.
COURT'S RETENTION OF JURISDICTION
XWI;
IT IS FURTHER ORDERED that this Court shaU retain jurisdiction of this
tter for purposes of construction, modification, and enforcement of this Order.
Attorney f& Halsey Holdings LLC
11
12
13
IT IS S O ORDERED Dated MAR 3 0 ?nil5
DICXRAN IEVRIZIAI Pa!3e 28 of *' United States District Judge
SO STIPULATED.
;O ORDERED
Page 29 of 29
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on March 29,2005 I caused true and correct co ies of the Pro osed STIPULATED FINAL O ~ E R FOR PERMANENT IRPJUNCTIO b k A D s B TTLEMENT OF CLAIMS FOR MONETARY RELIEF RE: HALSEY HOLDINGS LLC to be served as follows:
BY FEDERAL EXPRESS: Sheldon S. Lustigman, Esq. Andrew B. Lusti man Esq. + P The Lustigman irm, C 149 Madison Avenue, Suite 805 New York, NY 10016
Kerry R. Bensin er Esq. Bensin er Ritt, % hotterud, LLP 65 NO*$ d a p o n d Avenue, Suite 320 Pasadena, CA 9 1 103
G. Cresswell Templeton 111, Esq. Hill, Farrer & Bumll, LLP One California Plaza, 37th Floor 300 South Grand Avenue Los Angeles, CA 9007 1-3 147
Richard C. Wolfe, Esq. Wolfe & Goldstein, P.A. 550 Brickell Avenue Miarni,FL 33131
Charles L. Kreindler, Esq. Edward E. Alon, Esq. Beck, De Corso Daly,
Kreindler & 14arris 601 West 5th Street, 12th Floor Los Angeles,.CA 90071
Peter Morris Esq. Altman & Idorris 1880 Century Park East Suite 600 Los Angeles, CA 90063
Robert L. Luty, Es 29900 Hawthorne 8 Ivd. Rolling Hills Estates, CA 90274
Counsel for Defendant A. Glenn Braswell
Counsel for Defendant A. Glenn Braswell
Counsel for Defendants JOL Management Co.. G.B. Data Systems, I rk , Gero Vita International Inc., Theraceuticals, Inc;, Health Guest Publications, Inc., and G.B. Data Systems, Inc. (Canada)
-
Counsel for Defendant Halsey Holdings LLC
Counsel for Defendant Ron Tepper
Counsel for Defendant Ronald Lawrence, M.D., Ph.D.
, Counsel for Defendant Hans Kugler, Ph.D.
Michael L. Mallow, Esq. Kirkpatrick & Lockhart
Nicholson Graham LLP 101 00 Santa Monica Blvd., 7th Floor Los Angeles, CA 90067
Counsel for Defendant Chase Revel ak/a Marcus Welbourne, John Wellburn James Welbum, Martin Wellner, john Meggenhom, and . John Burke
Counsel for Defendant Chase Revel akla Marcus Welbourne, John Wellburn James Welbum, Martin Wellner, fohn Meggenhom, and John Burke