IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

FEDERAL TRADE COMMISSION,

Plaintiff,

V. 

KENNETH WRIGHT, individually,

Defendant.

Civil Action No.

STIPULATED ORDER FOR PERMANENT INJUNCTION AND FINAL JUDGMENT AGAINST KENNETH WRIGHT

Plaintiff, the Federal Trade Commission ("Commission"), has filed a 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 U.S.C. 53(b), charging defendant Kenneth Wright with violations of Section 5 and 12 of the FTC Act, 15 U.S.C. 45 and 52. The Commission, by and through its counsel, and defendant Kenneth Wright have agreed to the entry of this Stipulated Order for Permanent Injunction and Final Judgment by this Court in order to resolve all matters of dispute between them in this action. The Commission and Kenneth Wright have consented to entry of this Stipulated Order for Permanent Injunction and Final Judgment without trial or adjudication of any issue of law or fact herein.

NOW, THEREFORE, defendant Kenneth Wright and the Commission have requested the Court to enter this Stipulated Order for Permanent Injunction and Final Judgment. It is therefore ORDERED, ADJUDGED AND DECREED as follows:

FINDINGS

  1. This Court has jurisdiction over the subject matter of this case and all parties hereto.
  2. This is an action by the Commission instituted under Sections 5 and 13(b) of the FTC Act, 15 U.S.C. 45 and 53(b). Pursuant to Sections 5 and 13(b), the Commission has authority to seek the relief it has requested.
  3. Concurrently herewith, plaintiff filed its complaint for a permanent injunction and other equitable relief in this matter, pursuant to Section 13(b) of the FTC Act, 15 U.S.C. 53(b).
  4. Defendant Kenneth Wright has waived all claims under the Equal Access to Justice Act, 28 U.S.C. 2412, and all rights to seek judicial review or otherwise to challenge the validity of this Stipulated Order for Permanent Injunction and Final Judgment.
  5. Entry of this Order is in the public interest.
  6. This Stipulated Order for Permanent Injunction and Final Judgment does not constitute and shall not be interpreted to constitute either an admission by defendant Kenneth Wright or a finding by the Court that defendant Kenneth Wright has engaged in violations of the FTC Act.

DEFINITIONS

For purposes of this Stipulated Order for Permanent Injunction and Final Judgment, the following definitions shall apply:

  1. "Competent and reliable scientific evidence" shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.
  2. Unless otherwise specified, “defendant” shall mean Kenneth Wright, individually and his agents, representatives and employees, and those persons in active concert or participation with him who receive actual notice of this Order by personal service or otherwise, whether acting directly or through any corporation, subsidiary, division, or other device.
  3. "In or affecting commerce" shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. 44.

ORDER

I.

IT IS ORDERED that defendant, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of Eden’s Secret Nature’s Purifying Product or any substantially similar product in or affecting commerce, shall not represent, in any manner, expressly or by implication, that:

(a) Such product causes significant weight loss.

(b) Such product prevents or cures illnesses, including but not limited to premenstrual syndrome.

(c) Such product will cleanse the body of harmful toxins.

(d) Such product will purify the body’s blood supply.

For purposes of this Part, “substantially similar product” shall mean any herbal-based product that is substantially similar in ingredients, composition and properties.

II.

IT IS FURTHER ORDERED that defendant, directly or through any corporation, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any herbal-based product or program in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, about the benefits, performance, or efficacy of such product, unless, at the time the representation is made, respondent possesses and relies upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

III.

Nothing in this order shall prohibit defendant from making any representation for any drug that is permitted in labeling for such drug under any tentative final or final standard promulgated by the Food and Drug Administration, or under any new drug application approved by the Food and Drug Administration.

IV.

Nothing in this order shall be constituted as a waiver of defendant’s right to engage in speech protected by the First Amendment to the Constitution of the United States.

V.

IT IS FURTHER ORDERED that:

A. Defendant Kenneth Wright shall pay to the Federal Trade Commission by electronic funds transfer the sum the sum of fifty thousand dollars ($50,000) no later than five (5) days after the date of entry of this Stipulated Order by the Court. In the event of any default on any obligation to make payment under this Part, interest, computed pursuant to 28 U.S.C. 1961(a) shall accrue from the date of default to the date of payment.

B. The funds paid by defendant Kenneth Wright, pursuant to subpart A above, shall be paid into a redress fund administered by the Commission and shall be used to provide direct redress to purchasers of Eden’s Secret Nature’s Purifying Product. Payment to such persons represents redress and is intended to be compensatory in nature, and no portion of such payment shall be deemed a payment of any fine, penalty, or punitive assessment. If the Commission determines, in its sole discretion, that redress to purchasers is wholly or partially impracticable, any funds not so used shall be paid to the United States Treasury.

C. Notwithstanding any other provision of this Stipulated Order for Permanent Injunction and Final Judgment, defendant Kenneth Wright agrees that, if he fails to meet the payment obligations set forth in subpart A above, defendant Kenneth Wright shall pay the costs and attorneys fees incurred by the Federal Trade Commission and its agents in any attempts to collect amounts due pursuant to this Stipulated Order for Permanent Injunction and Final Judgment. Defendant Kenneth Wright further agrees that the facts as alleged in the Complaint filed with this Stipulated Order for Permanent Injunction and Final Judgment shall be taken as true in any subsequent litigation filed by the Federal Trade Commission to enforce its rights pursuant to this Stipulated Order for Permanent Injunction and Final Judgment, including but not limited to a nondischargeability complaint in any subsequent bankruptcy proceeding.

VI.

IT IS FURTHER ORDERED, that within three (3) business days after the date of entry of this Stipulated Order by the Court defendant Kenneth Wright shall submit to the Commission a truthful sworn statement in the form shown on Exhibit A of this Stipulated Order that shall reaffirm and attest to the truthfulness, accuracy and completeness of the respective financial statements signed by Kenneth Wright on May 20, 1997. The Commission's agreement to this Stipulated Order is expressly premised upon the financial condition of defendant Kenneth Wright as represented in the respective financial statements referenced above, which contain material information upon which the Commission relied in negotiating and agreeing upon this Stipulated Order for Permanent Injunction and Final Judgment. If, upon motion by the Commission, this Court finds that defendant Kenneth Wright failed to file the sworn statement required by this section, or filed a statement that failed to disclose any material asset, or materially misrepresented the value of any asset, or made any other material misrepresentation in or omission from his financial statements, the Commission may request that the judgment herein be reopened for the purpose of requiring additional monetary consumer redress or obtaining other equitable relief; provided, however, that in all other respects this judgment shall remain in full force and effect, unless otherwise ordered by this Court; and provided further, that proceedings instituted under this section are in addition to and not in lieu of any other civil or criminal remedies as may be provided by law, including, but not limited to, contempt proceedings, or any other proceedings the Commission may initiate to enforce this Stipulated Order for Permanent Injunction and Final Judgment.

VII.

IT IS FURTHER ORDERED that, in order to facilitate the Commission's monitoring of compliance with the provisions of this permanent injunction, defendant Kenneth Wright shall, for five (5) years after the date of entry of this Order:

A. Notify the FTC in writing, within thirty (30) days after service of this Order, of his current residence address and employment status, including the name and business address of his current employer(s), if any;

B. Notify the FTC in writing within thirty (30) days of any change in his residential address. Such notification shall include the defendant's new address and telephone number;

C. Notify the FTC in writing within thirty (30) days of any change in his employment status; such notice shall include the name, address and telephone number of the defendant's new employer, a statement of the nature of the business, and a statement of the defendant's duties and responsibilities in connection with the business;

D. Notify the FTC in writing at least thirty (30) days prior to the effective date of any proposed change in the structure of any business entity owned or controlled by defendant, such as creation, incorporation, dissolution, assignment, sale, creation or dissolution of subsidiaries, or any other changes that may affect compliance obligations arising out of this Order;

E. Upon seven (7) days notice from the FTC, permit duly authorized representatives of the FTC access during normal business hours to the offices of any company or any person under defendant's control, to inspect and copy all documents belonging to defendant and all documents of any company owned or controlled by defendant, in whole or in part, relating in any way to any conduct subject to this Order;

F. Refrain from interfering with duly authorized representatives of the FTC who wish to interview defendant's employers, agents, and employees (who may have counsel present) relating in any way to any conduct subject to this Order;

G. Upon thirty (30) days written notice by any duly authorized representative of the FTC, submit written reports (under oath, if requested) and produce documents with respect to any conduct subject to this Order; and

H. Appear on fifteen (15) days notice for deposition with respect to any conduct subject to this Order.

Provided further, that the FTC may otherwise monitor defendant's compliance with this Order by all lawful means available, including the use of investigators posing as consumers, potential investors, suppliers and other entities.

VIII.

IT IS FURTHER ORDERED that defendant shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission for inspection and copying:

A. All advertisements and promotional materials containing the representations;

B. All materials that were relied upon in disseminating the representations; and

C. All tests, reports, studies, surveys, demonstrations, or other evidence in their possession or control that contradict, qualify, or call into question the representation, or the basis relied upon for the representation, including complaints and other communications with consumers or with governmental or consumer protection organizations.

IX.

IT IS FURTHER ORDERED that all notices required of defendant by this Order shall be made to the following address: Federal Trade Commission, Regional Director, 55 East Monroe, Suite 1860, Chicago, IL 60603 or such other address as Plaintiff shall specify.

X.

IT IS FURTHER ORDERED that, within sixty (60) days after the date of entry of this Order, defendant shall file a report with the Commission setting forth the manner and form in which he has complied with this Order.

XI.

IT IS FURTHER ORDERED that each party to this Stipulated Order for Permanent Injunction and Final Judgment hereby agrees to bear its own costs and attorney fees incurred in connection with this action; provided, however, in the event that the Federal Trade Commission initiates proceedings to enforce the provisions of this Stipulated Order for Permanent Injunction and Final Judgment and provided further the Court determines that defendant Kenneth Wright has violated any term or provision of this Stipulated Order for Permanent Injunction and Final Judgment, the defendant Kenneth Wright shall pay the costs and attorney fees incurred by the Federal Trade Commission in connection with proceedings to enforce this Stipulated Order for Permanent Injunction and Final Judgment.

XII.

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for all purposes.

SO ORDERED, this _______ day of __________, 1997, at ______.

______________________
United States District Judge

The parties agree and stipulate to entry of the foregoing Order for Permanent Injunction and Final Judgment.

For the FEDERAL TRADE COMMISSIONFor the DEFENDANT

_________________________
RUSSELL W. DAMTOFT
MARY ELIZABETH TORTORICE
CHARULATA B. PAGAR
Attorneys for Plaintiff
Federal Trade Commission
55 East Monroe Street, Suite 1860
Chicago, IL 60603
(312) 353-8156

 

_________________________
ROBERT E. ARMSTRONG
Gronek & Armstrong
Attorney for Defendant
Kenneth Wright
233 South Wacker
98th Floor
Chicago, Illinois 60606
(312)655-1800

DEFENDANT

_________________________
KENNETH WRIGHT, Individually