Bed Bug Repellent – Proposed Court Order

This is the proposed order involving Rest Easy bed bug spray found in the FTC (Plaintiff) vs RMB GROUP, LLC, owned by Howard and Bruce Brenner (Defendants).

[PROPOSED] STIPULATED ORDER FOR PERMANENT INJUNCTION AND MONETARY JUDGMENT

Plaintiff, the Federal Trade Commission (“Commission” or “FTC”), filed its Complaint for a permanent injunction and other equitable relief in this matter, pursuant to Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 in U.S.C. § 53(b). The Commission and Defendants stipulate to the entry of this stipulated Order for Permanent Injunction and Monetary Judgment (“Order”) to resolve all matters in dispute in this action between them.

THEREFORE, it is ORDERED as follows:

FINDINGS

This Court has jurisdiction over the subject matter and all of the parties.

Venue is proper as to all parties in this District.

Defendants’ activities are “in or affecting commerce” as defined in Section of the FTC Act, 15 U.S.C. § 44.

The Complaint states claims upon which relief may be granted against defendants, under Section 5 the FTC Act, 15 U.S.C. § 45.

In its Complaint, the FTC charges that Defendants engaged in deceptive acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45 in the advertising of pest-control products.

Defendants do not admit any allegations in the Complaint, except for facts necessary to establish jurisdiction and as otherwise specifically stated in this order.

Plaintiff and Defendants waive all rights to appeal or otherwise challenge or contest the validity of this Order.

Defendants waive-any claim that they may hold under the Equal-Access to Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order, and agree to bear their own costs and attorneys fees.

DEFINITIONS

For the purpose of this Order, the following definitions apply:

A. “Corporate Defendant” means RMB Group, LLC, and its successors and “Defendants” means all of the Individual Defendants and the Corporate Defendant, individually, collectively, or in any combination.

C. “Defendants” mean Howard Brenner and Bruce Brenner.

D. “Pesticide” means any product intended to prevent, destroy, repel, or mitigate any pest.

E. “Specified product” means Rest Easy.

I. PROHIBITION ON DECEPTIVE PERFORMANCE AND EFFICACY CLAIMS

IT IS HEREBY ORDERED that Defendants and their officers, agents, servants, employees, and attorneys, and all other persons in active concert or participation with any of them who receive actual notice of this Order by personal service or otherwise, whether acting directly or indirectly, in connection with the advertising, marketing, promoting, or offering for sale of the specified product or any other pesticide are permanently restrained and enjoined from making, or assisting others in making, directly or indirectly, expressly or by implication, including through the use of a product name, endorsement, depiction, or illustration, any representation:

A. that such product kills bed bugs;

B. that such product repels bed bugs;

C. that such product creates a barrier against bed bugs; or

D. about the performance or efficacy of such product;

Unless the representation is non-misleading, and, at the time such representations made, Defendants possess and rely upon competent and reliable scientific evidence that is sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when considered in light of the entire body of relevant and reliable scientific evidence, to substantiate that the representation is true. For purposes of this Section, competent and reliable scientific evidence means tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified persons and are generally accepted in the profession to yield accurate and reliable results.

II. MONETARY JUDGMENT AND SUSPENSION

IT IS FURTHER ORDERED that:

A . Judgment in the amount of two-hundred and sixty-four thousand, nine hundred and seventy-six dollars ($264,976) is entered against Defendants, jointly and severally. The judgment shall be suspended subject to the Subsections below.

B. The Commission’s agreement to, and the Court’s approval of, the suspension of the judgment, is expressly premised upon the truthfulness, accuracy, and completeness of Defendants’ sworn financial statements and related documents (collectively, “financial representations”) submitted to the Commission, namely:

1. the Financial Statement of Individual Defendant Howard Brenner signed on March 16, 2012, including the attachments;

2. the Financial Statement of Individual Defendant Bruce Brenner signed on March 16, 2012, including the attachments; and

3. the Financial Statement of Corporate Defendant RMB Group, LLC, signed by Bruce Brenner, co-owner and Chief Operating Officer on March 16, 2012, including the attachments.

C. The suspension of the judgment shall be lifted as to any Defendant, if upon motion by the Commission, the Court finds:

1. that Defendant failed to disclose any material asset, materially misstated the value of any asset, or made any other material misstatement or omission in the financial representations identified above; or

2. that Defendant is in default on any obligation under this Section

D. If the suspension of the judgment is lifted, the judgment shall become immediately payable, and the amount due shall be calculated as follows: the judgment amount specified in Subsection A . above, plus interest computed from the date of entry of this Order pursuant to 28 U .S .C. § 1961. 5269707065642066726f6d204c6177737569747352657669657765642e636f6d

III. ADDITIONAL MONETARY PROVISIONS

IT IS FURTHER ORDERED that:

A. Defendants relinquish all dominion, control, and title to the funds paid to the fullest extent permitted by law. Defendants shall make no claim to or demand for return of the funds, directly or indirectly, through counsel or otherwise

B. Defendants agree that the facts as alleged in the Complaint filed in this action sha11 be taken as true without further proof in any bankruptcy case or subsequent civil litigation pursued by the Commission to enforce its rights to any payment or money judgment pursuant to this Order, including but not limited to a nondischargeability complaint in any bankruptcy case. Defendants further stipulate and agree that the facts alleged in the Complaint establish all elements necessary to sustain an action by the Commission pursuant to Section 523(a)(2)(A ) of the Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and that this Order shall have collateral estoppel effect for such purposes.

C. All money paid to the Commission pursuant to this Order shall be deposited into a fund administered by the Commission or its representatives to be used for equitable relief, including consumer redress and any attendant expenses for the administration of any attendant expenses for the administration of any redress fund. If direct redress to consumers is wholly or partially impracticable or money remains after redress is completed, the Commission may apply any remaining money for such other equitable relief (including consumer information remedies) as it determines to be reasonably related to Defendants ‘ practices alleged in the Complaint. A ny monies not used for such equitable relief shall be deposited to the U.S. Treasury as disgorgement. Defendants shall have no right to challenge any actions the Commission or its representatives may take pursu ant to this Section.

IV. ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this Order:

A. Each Defendant, within 7 days of entry of this Order, must submit to the Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.

B. For 3 years after entry of this Order, each Individual Defendant for any business that such Defendant, individually or collectively with any other Defendant, is the majority owner or directly or in directly controls, and each Corporate Defendant, must deliver a copy of this Order to: (1) all principals, officers, directors, and managers; (2) all employees, agents, and representatives who participate in conduct related to the subject matter of the Order; and (3) any business entity resulting from any change in structure as set forth in the Section titled Compliance Reporting. Delivery must occur within 7 days of entry of this Order for current personnel. To all others, delivery must occur before they assume their responsibilities.

c. From each individual or entity to which a Defendant delivered a copy of this Order, that Defendant must obtain, wi thin 30 days, a signed and dated acknowledgment of receipt of th is Order.

V. COMPLIANCE REPORTING

IT IS FURTHER ORDERED that Defendants make timely submissions to the Commission:

A. One year after entry of this Order, each Defendant must submit a compliance report, sworn under penalty of perjury.

1. Each Defendant must: (a) designate at least one telephone number and an email , physical, and postal address as points of contact, which representatives of the Commission may use to communicate with Defendant; (b) identify all of that Defendant’s businesses by all of their names, telephone numbers, and physical , postal , email, and Internet addresses; (c) describe the activities of each business, including the products and services offered, the means of advertising, marketing, and sales, and the involvement of any other Defendant (which the Individual Defendants must describe if they know or should kn ow due to their own involvement); (d) describe in detail whether-and how…that Defendant is in compliance with each Section of this Order; and (e) provide a copy of each Order Acknowledgment obtained pursuant to this Order, unless previously submitted to the Commission;

2. Additionally, each Individual Defendant must: (a) identify all telephone numbers and all email, Internet, physical, and postal addresses, including all residences; (b) identify all titles and roles in all business activities, including any business for which such Defendant performs services whether as an employee or otherwise and any entity in which such Defendant has any ownership interest; and (c) describe in detail such Defendant’s involvement in each such business, including title, role, responsibilities, participation, authority, control, and any ownership. For 20 years follow ing entry of this Order, each Defendant must submit a compliance notice, sworn under penalty of perjury, within 14 days of any change in the following:

1. Each Defendant must report any change in: (a) any designated point of contact; or (b) the structure of the Corporate Defendant or any entity that Defendant has any ownership interest in or directly or indirectly controls that may affect compliance obligations arising under this Order, including: creation , merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order.

2. Additionally, each Individual Defendant must report any change in: (a) name, including aliases or fictitious name, or residence address; or (b) title or role in any business activity, including any business for which such Defendant performs services whether as an employee or otherwise and any entity in which such Defendant has any ownership interest, and identify its name, physical address, and Internet address, if any.

C. Each Defendant must submit to the Commission notice of the filing of any bankruptcy petition, insolvency proceeding, or any similar proceeding by or against such Defendant within 14 days of its filing.

D. Any submission to the Commission required by this Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: “I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on: [date]” and supplying the date, signatory’s full name, title (if applicable), and signature.

Unless otherwise directed by a Commission representative in writing, all submissions to the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW , Washington, DC 20580. The subject line must begin: FTC v. RMB Group, LLC.

VI. RECORD KEEPING

IT IS FURTHER ORDERED that Defendants must create certain records or 20 years after entry of the Order, and retain each such record for 5 years. Specifically, Corporate Defendant and each Individual Defendant for any business in which that Defendant, individually or collectively with any other Defendants, is a majority owner or directly or indirectly controls, must maintain the following records:

A. Accounting records showing the revenues from all goods or services sold, all costs incurred in generating those revenues, and the resulting net profit or loss;

B. Personnel records showing, for each person providing services, whether as an employee or otherwise, that person’s: name, addresses, and telephone numbers; job title or position; dates of service; and, if applicable, the reason for termination;

C. Complaints and refund requests, whether received directly or indirectly, such as through a third party, and any response;

D. All records necessary to demonstrate full compliance with each provision of this Order, including all submissions to the Commission; and

E. A copy of each advertisement or other marketing material.

VII. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring defendants’ compliance with this Order, including the financial representations upon which part of the judgment was suspended and any failure to transfer any assets as required by this Order:

A. Within 14 days of receipt of a written request from a representative of the Commission, each Defendant must: submit additional compliance reports or other requested information, which must be sworn under penalty of perjury; appear for depositions; and produce documents, for inspection and copying. The Commission is also authorized to obtain discovery, without further leave of court, using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.

B. For matters concerning this Order, the Commission is authorized to communicate directly with each Defendant. Defendant must permit representatives of the Commission to interview any employee or other person affiliated with any Defendant who has agreed to such an interview . The person interviewed may have counsel present.

C. The Commission may use all other lawful means, including posing, through its representatives, as consumers, suppliers, or other individuals or entities, to Defendants or any individual or entity affiliated with Defendants, without the necessity of identification or prior notice. Nothing in this Order limits the Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-l.

VIII. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order.

SO ORDERED this day of , 201_.

UNITED STATES DISTRICT JUDGE

SO STIPULATED AND AGREED:

FOR THE PLAINTIFF: FEDERAL TRADE COMMISSION
Signed: KERRY O’BRIEN, Attorney
LINDA K. BADGER, Attorney Federal Trade Commission
901 Market Street, Ste. 570 San Francisco, CA 94103
(415) 848-5100 (voice)
(415) 848-5184 (fax)
kobrien@ftc.gov
lbadger@ftc.gov

FOR DEFENDANTS RMB GROUP, LLC, AND HOWARD BRENNER
Signed 4/27/2012
HOWARD BRENNER, INDIVIDUALLY AND AS AN OFFICER OF RMB GROUP, LLC

FOR DEFENDANTS RMB GROUP, LLC, AND BRUCE BRENNER
BRUCE BRENNER, INDIVIDUALLY AND AS AN OFFICER OF RMB GROUP, LLC
Signed Date: 4/27/12

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