| Comment Number: | 522418-06571 |
| Received: | 7/6/2006 7:23:03 PM |
| Organization: | Nehra Law Firm |
| Commenter: | Gerald Nehra |
| State: | MI |
| Subject: | Business Opportunity Rule |
| Title: | Notice of Proposed Rulemaking |
| CFR Citation: | 16 CFR Part 437 |
| No Attachments |
Comments:
Business Opportunity Rule, Matter No. R511993 The underlying basis of this Proposed Rule is so flawed that I have to ask, “FTC—What were you thinking?” I have issues to bring up—many issues. Due to the 4000 character space limitation imposed on this form of submission, this is a one issue submission. My other issues will be in other submissions. THE PREEMPTION ISSUE On Page 103 “The FTC does not intend to preempt the business opportunity sales practices laws of any state or local government, except to the extent of any conflict with the Rule.” How can the Federal Trade Commission make the above statement, when the FTC knows ALL state business opportunity statutes (22 of them being the FTC number and 23 of them being my number) have a threshold BELOW which the law does not apply and the lowest threshold in the nation is $200? The FTC proposed rule lowers the threshold to $1 and therefore preempts ALL state business opportunity statutes. You CANNOT say you do “not intend to preempt” and at the same time set your threshold at $1. And what about the 46 states that have some form of anti-pyramid statute (citations available upon request) that, while outlawing pyramids and endless chains, permit - expressly - or by custom and usage - the required purchase of an at-cost, non-commissionable sales or starter kit by a multilevel participant? Did you intend to preempt any of those 46 state statutes? Well, with your $1 threshold, you preempted ALL 46 of them. This underlying premise of this proposed rule – namely – that the Federal Trade Commission does not intend to preempt state laws - is so flawed and so erroneous, that the only solution is to withdraw the proposed rule completely - and not put forth another version until the Federal Trade Commission understands and states with some reasonable semblance of accuracy, how the rule will work in harmony with existing state laws. Submitted by: Gerald P. Nehra Attorney at Law