Federal District Court Opinions
FED. TRADE COMM. v. SUNNY HEALTH NUTRITION TECHNOL.,
(M.D.Fla. 11-30-2006) FEDERAL TRADE COMMISSION, Plaintiff,
v. SUNNY HEALTH NUTRITION TECHNOLOGY & PRODUCTS, INC. and
SUNNY SIA; Defendants. Case No. 8:06-cv-2193-T-24EAJ.
United States District Court, M.D. Florida, Tampa Division.
November 30, 2006
WILLIAM BLUMENTHAL, General Counsel, JANET M. EVANS, MARY
L. JOHNSON, Federal Trade Commission, Washington, D.C.,
ATTORNEYS FOR PLAINTIFF.
STIPULATED FINAL ORDER FOR PERMANENT INJUNCTION AND
SETTLEMENT OF CLAIMS FOR MONETARY RELIEF AGAINST SUNNY
HEALTH NUTRITION TECHNOLOGY & PRODUCTS, INC. AND SUNNY SIA
SUSAN BUCKLEW, District Judge
Plaintiff, the Federal Trade Commission (“FTC” or
“Commission”) filed a Complaint for Permanent Injunction
and Other Equitable Relief (“Complaint”) against defendants
Sunny Health Nutrition Technology & Products, Inc., which
also has done business as SHN Tech, Inc., and Sunny Sia,
(together, “defendants”) pursuant to Section 13(b) of the
Federal Trade Page 2 Commission Act (“FTC Act”), 15 U.S.C.
§ 53(b), alleging violations of Sections 5(a) and 12
of the FTC Act, 15 U.S.C. §§ 45(a) and 52.
Defendants agree to the entry of the following Stipulated
Final Order for Permanent Injunction and Settlement of
Claims for Monetary Relief (“Order”) to resolve the
allegations set forth in the Complaint. The Court, being
advised in the premises, finds:
FINDINGS
1. This Court has jurisdiction over the subject matter of
this case and jurisdiction over all parties. Venue in the
Middle District of Florida is proper.
2. The Complaint states a claim upon which relief can be
granted, and the Commission has the authority to seek the
relief it has requested.
3. The acts and practices of defendants were and are in or
affecting commerce, as defined in Section 4 of the FTC Act,
15 U.S.C. § 44.
4. Defendants waive all rights to seek judicial review or
otherwise challenge or contest the validity of this Order.
Defendants also waive any claim that they may have held
under the Equal Access to Justice Act, 28 U.S.C. §
2412, concerning the prosecution of this action to the date
of this Order.
5. This action and the relief awarded herein are in
addition to, and not in lieu of, other remedies as may be
provided by law.
6. Each party shall bear its own costs and attorneys’ fees.
7. Entry of this Order is in the public interest. Page 3
8. Defendants, without admitting or denying the allegations
of the Commission’s Complaint, stipulate and agree to entry
of this Order under Section 13(b) of the FTC Act, 15 U.S.C.
§ 53(b).
9. Pursuant to Federal Rule of Civil Procedure 65(d), the
provisions of this Order are binding upon defendants, and
their officers, agents, servants, representatives,
employees, and all other persons or entities in active
concert or participation with them, who receive actual
notice of this Order by personal service or otherwise.
10. Nothing in this Order obviates the defendants’
obligations to comply with Sections 5 and 12 of the Federal
Trade Commission Act, 15 U.S.C. §§ 45 and 52.
11. This Order resolves only claims against the named
defendants and does not preclude the Commission from
initiating further action or seeking any remedy against any
other persons or entities, including without limitation
persons or entities who may be subject to portions of this
Order by virtue of actions taken in concert or
participation with defendants, and persons or entities in
any type of indemnification or contractual relationship
with defendants.
12. This Order was drafted jointly by the Commission and
defendants and reflects the negotiated settlement of the
parties.
13. The paragraphs of this Order shall be read as the
necessary requirements for compliance and not as
alternatives for compliance and no paragraph serves to
modify another paragraph unless expressly so stated. Page
4
ORDER
DEFINITIONS
For purposes of this Order, the following definitions
shall apply:
1. “Defendants” means:
A. Sunny Health Nutrition Technology & Products, Inc.
(“SHN”), which also has done business as SHN Tech, Inc., a
corporation, its divisions and subsidiaries, its
successors and assigns; and
B. Sunny Sia (“Sia”), individually and in his capacity as
a director or officer of SHN.
2. “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.
3. “Covered product” shall mean any dietary supplement,
food, or drug.
4. “Commerce” shall have the meaning set forth in Section 4
of the Federal Trade Commission Act, 15 U.S.C. § 44.
5. “Endorsement” shall have the meaning set forth in 16
C.F.R. § 255.0(b).
6. “Metatags” shall mean any word or words embedded in the
source code of an Internet website that may be used by an
Internet search engine in indexing websites for the purpose
of selecting sites in response to an Internet user’s search
request. Page 5
7. “Food” and “drug” shall have the meaning set forth in
Section 15 of the FTC Act, 15 U.S.C. § 55.
8. “Including” shall mean “including, without limitation.”
9. “HeightMax” shall mean HeightMaxTM Plus and HeightMaxTM
Concentrate dietary supplements and any other product
containing one or more of the ingredients in HeightMaxTM
Plus and HeightMaxTM Concentrate as currently sold that is
promoted to provide any height-related benefit.
10. “Liposan Ultra Chitosan Fat Blocker” shall mean
“Liposan Fat Blocker,” “Chitosan-based Sunny Health
Nutrition Fat Blocker,” “SHN’s Fat Blocker,” and any other
product containing one or more of the ingredients in
“Liposan Fat Blocker,” “Chitosan-based Sunny Health
Nutrition Fat Blocker,” or “SHN’s Fat Blocker” as currently
sold that is promoted to bind with fat lipids before they
can be absorbed into the bloodstream or cause weight loss.
11. “Osteo-Vite” shall mean “Osteo-Vite” and any other
product containing one or more of the ingredients in
“Osteo-Vite” as currently sold that is promoted to provide
a benefit to the bones or bone health.
12. The terms “and” and “or” in this Order shall be
construed conjunctively or disjunctively as necessary to
make the applicable phrase or sentence inclusive rather
than exclusive.
13. “Target product” shall mean HeightMaxTM Plus,
HeightMaxTM Concentrate, Liposan Ultra Chitosan Fat
Blocker, and Osteo-Vite. Page 6
14. “Preferential search engine display” shall mean any
program in which an individual Internet site or URL: 1)
appears as a sponsored link or sponsored site in search
engine results; 2) can pay for a higher ranking in a search
results list, with the result that relevancy measures alone
do not dictate its rank; or 3) can pay to be included in a
search engine’s index, or pool, of sites available for
display as search results, when that Internet site or URL
might not otherwise have been included, or might not have
been included at a particular point in time.
CONDUCT PROHIBITIONS
I.
PROHIBITED REPRESENTATIONS FOR HEIGHTMAX PRODUCTS
IT IS HEREBY ORDERED that defendants, directly or through
any corporation, partnership, subsidiary, division, trade
name, or other device, and their officers, agents,
servants, representatives, employees, and all persons or
entities in active concert or participation with them who
receive actual notice of this Order, by personal service or
otherwise, in connection with the manufacturing, labeling,
advertising, promotion, offering for sale, sale, or
distribution of HeightMax or any other covered product, in
or affecting commerce, are hereby permanently restrained
and enjoined from making any representation, in any manner,
expressly or by implication, including through the use of
the name “HeightMax” or any other product name or
endorsement, through the use of metatags, or through
preferential search engine display, that any such product:
Page 7
A. Increases height in users over what they would achieve
without the product;
B. Causes users to grow an additional 2 to 3 inches, or
any other amount, in 6 months or any other period of time;
C. Has been the subject of clinical tests proving that
the product:
1. Increases the height of teenagers and young adults;
and
2. As compared to persons who do not use the product,
when used for 6 months, causes a 10% to 25% gain in height
and when used for more than a year causes a 20% to 35%
gain in height or causes any other percentage gain in
height in any period of time; and/or
D. Increases lean body mass and reduces body fat,
unless the representation is true, nonmisleading, and, at
the time it is made, defendants possess and rely on
competent and reliable scientific evidence that
substantiates the representation.
II.
PROHIBITED REPRESENTATIONS FOR LIPOSAN ULTRA CHITOSAN FAT
BLOCKER
IT IS FURTHER ORDERED that defendants, directly or through
any corporation, partnership, subsidiary, division, trade
name, or other device, and their officers, agents,
servants, representatives, employees, and all persons or
entities in active concert or participation with them who
receive actual notice of this Order, by personal service or
otherwise, in connection with the manufacturing, labeling,
advertising, promotion, offering for sale, sale, or
distribution of Liposan Ultra Chitosan Fat Blocker or any
other covered product, in or affecting commerce, are hereby
permanently restrained and enjoined from Page 8 making any
representation, in any manner, expressly or by implication,
including through the use of a product name or endorsement,
through the use of metatags, or through preferential search
engine display, that such product:
A. Enables users to lose weight;
B. Causes weight loss by binding with fat lipids before
they can be absorbed into the bloodstream; and/or
C. Is supported by studies proving that individuals
taking the product will lose an average of 8%, or any
other amount, of their body weight in a 4-week period or
any other time period,
unless the representation is true, nonmisleading, and, at
the time it is made, defendants possess and rely on
competent and reliable scientific evidence that
substantiates the representation.
III.
PROHIBITED REPRESENTATIONS FOR OSTEO-VITE
IT IS FURTHER ORDERED that defendants, directly or through
any corporation, partnership, subsidiary, division, trade
name, or other device, and their officers, agents,
servants, representatives, employees, and all persons or
entities in active concert or participation with them who
receive actual notice of this Order, by personal service or
otherwise, in connection with the manufacturing, labeling,
advertising, promotion, offering for sale, sale, or
distribution of Osteo-Vite or any other covered product, in
or affecting commerce, are hereby permanently restrained
and enjoined from making any representation, in any manner,
expressly or by implication, including through the use of a
product name or Page 9 endorsement, through the use of
metatags, or through preferential search engine display,
that such product:
A. Increases bone mineral density by up to 9%, or any
other amount, in 18 months, or any other period of time;
and/or
B. Is safe or has no adverse side effects or toxicity,
unless the representation is true, nonmisleading, and, at
the time it is made, defendants possess and rely on
competent and reliable scientific evidence that
substantiates the representation.
IV.
PROHIBITED REPRESENTATIONS FOR COVERED PRODUCTS
IT IS FURTHER ORDERED that defendants, directly or through
any corporation, partnership, subsidiary, division, trade
name, or other device, and their officers, agents,
servants, representatives, employees, and all persons or
entities in active concert or participation with them who
receive actual notice of this Order, by personal service or
otherwise, in connection with the manufacturing, labeling,
advertising, promotion, offering for sale, sale, or
distribution of any covered product, in or affecting
commerce, are hereby permanently restrained and enjoined
from making any representation, in any manner, expressly or
by implication, including through the use of a product name
or endorsement, through the use of metatags, or through
preferential search engine display, about the benefits,
performance, safety, side effects, or efficacy of any
covered product unless the representation Page 10 is
true, nonmisleading, and, at the time the representation is
made, defendants possess and rely upon competent and
reliable scientific evidence that substantiates the
representation.
V.
PROHIBITED REPRESENTATIONS ABOUT PERSONS PROVIDING
ENDORSEMENTS
IT IS FURTHER ORDERED that defendants, directly or through
any corporation, partnership, subsidiary, division, trade
name, or other device, and their officers, agents,
servants, representatives, employees, and all other persons
or entities in active concert or participation with them
who receive actual notice of this Order, by personal
service or otherwise, in connection with the manufacturing,
labeling, advertising, promotion, offering for sale, sale,
or distribution of any covered product in or affecting
commerce, are hereby permanently restrained and enjoined
from making any representation, in any manner, expressly or
by implication, including through the use of metatags, or
through preferential search engine display, about an
endorser’s existence, experience, expertise, training,
education, or qualifications, unless such representation is
true and nonmisleading and the endorsement reflects the
opinions, findings, beliefs, or experience of the endorser.
VI.
PROHIBITED REPRESENTATIONS ABOUT TESTS OR STUDIES
IT IS FURTHER ORDERED that defendants, directly or through
any corporation, partnership, subsidiary, division, trade
name, or other device, and their officers, agents, Page
11 servants, representatives, employees, and all persons
or entities in active concert or participation with them
who receive actual notice of this Order, by personal
service or otherwise, in connection with the manufacturing,
labeling, advertising, promotion, offering for sale, sale,
or distribution of any covered product, in or affecting
commerce, are hereby permanently restrained and enjoined
from misrepresenting, in any manner, expressly or by
implication, including through the use of metatags, or
through preferential search engine display, the existence,
contents, validity, results, conclusions, or
interpretations of any test, study, or research.
VII.
FDA APPROVED CLAIMS
IT IS FURTHER ORDERED that:
A. Nothing in this Order shall prohibit the defendants
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; and
B. Nothing in this Order shall prohibit the defendants
from making any representation for any product that is
specifically permitted in labeling for such product by
regulations promulgated by the Food and Drug
Administration pursuant to the Nutrition Labeling and
Education Act of 1990. Page 12
VIII.
COOPERATION WITH FTC COUNSEL
IT IS FURTHER ORDERED that defendants SHN and Sia shall,
in connection with this action or any subsequent
investigation related to or associated with the
transactions or the occurrences that are the subject of the
FTC’s Complaint, cooperate in good faith with the FTC and
appear or cause its officers, employees, representatives,
or agents to appear at such places and times as the FTC
shall reasonably request, after written notice, for
interviews, conferences, pretrial discovery, review of
documents, and for such other matters as may be reasonably
requested by the FTC. If requested in writing by the FTC,
defendants SHN and Sia shall appear or cause its officers,
employees, representatives, or agents to appear and provide
truthful testimony in any trial, deposition, or other
proceeding related to or associated with the transactions
or the occurrences that are the subject of the Complaint,
without the service of a subpoena.
IX.
MONETARY JUDGMENT AND CONSUMER REDRESS
IT IS FURTHER STIPULATED AND ORDERED that:
A. Subject to the conditions set forth in Subparagraphs
B, C, D, and E of this Part, judgment in the amount of
Three Hundred Seventy-Five Thousand Dollars ($375,000) is
hereby entered against defendants, jointly and severally,
which shall be paid within ten (10) business days after
entry of this Stipulated Final Order, by electronic funds
transfer into an account to be designated by Page 13
the Commission in accord with directions provided by the
Commission. Defendants relinquish all dominion, control,
and title to the monies transferred to the FTC, and agree
that all legal and equitable title to said monies is
vested in the Commission, for use according to the terms
of this Order. Defendants shall make no claim to or demand
for the return of the funds, directly or indirectly,
through counsel or otherwise.
B. In the event of any default on any obligation to make
payment under this Order, interest, computed pursuant to
28 U.S.C. § 1961(a), shall accrue from the date of
default to the date of payment. In the event such default
continues for ten (10) calendar days beyond the date a
payment is due, the entire unpaid amount shall immediately
become due and payable. Defendants shall be jointly and
severally liable for all payments required by this Order
and any interest on such payments.
C. All funds paid pursuant to this Order shall be
deposited into a fund administered by the Commission or
its agent to be used for equitable relief, including but
not limited to consumer redress, and any attendant
expenses for the administration of such equitable relief.
In the event that direct redress to consumers is wholly or
partially impracticable or funds remain after redress is
completed, the Commission may apply any remaining funds
for such other equitable relief (including consumer
information remedies) as it determines to be reasonably
related to the defendants’ practices alleged in the
Complaint. Page 14 Any funds not used for such equitable
relief shall be deposited to the United States Treasury
as disgorgement. Defendants shall have no right to
challenge the Commission’s choice of remedies under this
Part. Defendants shall have no right to contest the manner
of distribution chosen by the Commission.
D. The Commission’s agreement to this Order, requiring
that the defendants pay less than the full amount of
consumer injury, is expressly premised upon the
truthfulness, accuracy, and completeness of their sworn
financial statements and supporting documents submitted to
the Commission, namely:
1. The documentation submitted January 4, 2006, as
amended on April 14, 2006, including the federal income
tax returns for SHN from 2002-2004, the federal income tax
return for Sunny Sia from 2002, and the federal income tax
returns for Sunny Sia and Nataliya Sia from 2003-2004;
2. The documentation submitted January 23, 2006,
including sales of the target products and advertising
costs incurred in making such sales;
3. The documentation submitted April 14, 2006, as amended
May 16, 2006, including the individual financial statement
of Sunny Sia, the individual financial statement of
Nataliya Sia, the corporate financial statement of SHN,
the federal income tax returns for SHN from 2002-2004, the
federal income tax return for Sunny Sia from 2002, and
the Page 15 federal income tax returns for Sunny Sia and
Nataliya Sia from 2003-2004;
4. The written information submitted May 15, 2006,
including sales data for the target products and
describing certain assets of Sunny Sia and SHN;
5. The documentation submitted May 16, 2006, including
the corporate financial statement of SHN, the individual
financial statement of Sunny Sia, the individual financial
statement of Nataliya Sia, the personal balance sheets for
Sunny Sia dated December 31, 2005; the balance sheets for
SHN dated December 31, 2005; and the corporate income
statement for SHN reflecting six months ending December
31, 2005; and
6. The written information submitted May 26, 2006 and
June 16, 2006, describing certain personal assets of Sunny
Sia.
Such financial statements and supporting documents
contain material information upon which the Commission
relied in negotiating and agreeing to this Order.
E. If, upon motion by the Commission, this Court finds
that the defendants have failed to disclose any material
asset of defendants, or materially misstated the value of
any of the defendants’ assets in the financial statements
and related documents described above, or have made any
other material misstatement or omission in the financial
statements and related documents described above, the
Court shall enter judgment against the defendants, jointly
and severally, in Page 16 the amount of One Million
Nine Hundred Thousand Dollars ($1,900,000) in U.S.
currency, representing the estimated loss to consumers,
minus any payments previously made under Subparagraph A of
this Part IX, which amount shall be immediately due and
payable, and interest computed at the rate prescribed
under 28 U.S.C. § 1961, as amended, shall
immediately begin to accrue on the unpaid balance. For the
purpose of this Part IX, defendants waive any right to
contest any of the allegations in the Complaint filed in
this action.
F. In accordance with 31 U.S.C. § 7701, the
defendants are hereby required, unless they have done so
already, to furnish the Commission their respective
taxpayer identifying numbers (social security numbers or
employer identification numbers) which shall be used for
the purposes of collecting and reporting on any delinquent
amount arising out of the defendants’ relationship with
the government.
G. Defendants agree that the facts as alleged in the
Complaint filed in this action shall be taken as true for
the purpose of a nondischargeability complaint in any
bankruptcy proceeding.
H. Proceedings under this Part are in addition to, and
not in lieu of, any civil or criminal remedies that may be
provided by law, including any other proceedings the
Commission may initiate to enforce this Order. Page 17
X.
ACKNOWLEDGMENT OF RECEIPT OF ORDER
IT IS FURTHER ORDERED that each defendant, within five (5)
business days of receipt of this Order as entered by the
Court, shall submit to the Commission a truthful sworn
statement acknowledging receipt of this Order.
XI.
COMPLIANCE MONITORING
IT IS FURTHER ORDERED that, for the purpose of monitoring
and investigating compliance with any provision of this
Order,
A. Within ten (10) days of receipt of written notice from
a representative of the Commission, SHN and Sia each shall
submit additional written reports, sworn to under penalty
of perjury; produce documents for inspection and copying;
appear for deposition; and/or provide entry during normal
business hours to any business location in such
defendant’s 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 lawful means,
including but not limited to the following: Page 18
1. obtaining discovery from every person, without further
leave of court, using the procedures prescribed by
Fed.R.Civ.P. 30, 31, 33, 34, 36, and 45;
2. posing as consumers and suppliers to: SHN or Sunny
Sia, SHN’s or Sia’s employees, or any other entity managed
or controlled in whole or in part by SHN or Sia, without
the necessity of identification or prior notice; and
C. SHN and Sia 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 lawful use of compulsory process, pursuant
to Sections 9 and 20 of the FTC Act, 15 U.S.C.
§§ 49, 57b-1, to obtain any documentary
material, tangible things, testimony, or information
relevant to unfair or deceptive acts or practices in or
affecting commerce (within the meaning of 15 U.S.C.
§ 45(a)(1)).
XII.
COMPLIANCE REPORTING BY DEFENDANT(S)
IT IS FURTHER ORDERED that, in order that compliance with
the provisions of this Order may be monitored: Page 19
A. For a period of five (5) years from the date of entry
of this Order,
1. Sunny Sia shall notify the Commission of the
following:
a. Any changes in residence, mailing addresses, and
telephone numbers of Sia, within ten (10) days of the date
of such change;
b. Any changes in employment status (including
self-employment) of Sia and any change in the ownership of
Sia in any business entity, within ten (10) days of the
date of such change. Such notice shall include the name
and address of each business that Sia is affiliated with,
employed by, creates or forms, or performs services for; a
statement of the nature of the business; and a statement
of Sia’s duties and responsibilities in connection with
the business or employment; and
c. Any changes in Sia’s name or use of any aliases or
fictitious names; and
2. SHN and Sunny Sia shall notify the Commission of any
changes in corporate structure of SHN or any business
entity that Sia directly or indirectly control(s), or has
an ownership interest in, 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 entity; the creation or Page 20 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 SHN or Sia learns less than thirty
(30) days prior to the date such action is to take place,
SHN or Sia 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,
SHN and Sunny Sia shall provide a written report to the
FTC, sworn to under penalty of perjury, setting forth in
detail the manner and form in which they have complied and
are complying with this Order. This report shall include,
but not be limited to:
1. For Sunny Sia:
a. The then-current residence address, mailing addresses,
and telephone numbers of Sia;
b. The then-current employment and business addresses and
telephone numbers of Sia, a description of the business
activities of each such employer or business, and the
title and responsibilities of Sia, for each such employer
or business; and
c. Any other changes required to be reported under
Subparagraph A of this Part. Page 21
2. For all defendants:
a. A copy of each acknowledgment of receipt of this
Order, obtained pursuant to Part XIV(D); and
b. Any other changes required to be reported under
Subparagraph A of this Part.
C. For the purposes of this Order, defendants shall,
unless otherwise directed by the Commission’s authorized
representatives, mail all written notifications to the
Commission to:
Associate Director for Enforcement
Bureau of Consumer Protection
Federal Trade Commission
600 Pennsylvania Ave., NW, Washington, D.C. 20580
Re: FTC v. Sunny Health Nutrition Technology & Products,
Inc. and Sunny Sia, Civil Action No. 8:06-cv-2193-T-24EAJ
D. For purposes of the compliance reporting and
monitoring required by this Order, the Commission is
authorized to communicate directly with defendants.
XIII.
RECORD KEEPING PROVISIONS
IT IS FURTHER ORDERED that, for a period of eight (8)
years from the date of entry of this Order, SHN and Sunny
Sia, in connection with the manufacturing, advertising,
labeling, marketing, promotion, offering for sale, sale, or
distribution of a covered product, and their agents,
employees, officers, corporations, successors, and assigns,
and those persons Page 22 in active concert or
participation with them who receive actual notice of this
Order by personal service or otherwise, are hereby
restrained and enjoined from failing to create and retain
the following records:
A. Accounting records that reflect the cost of goods
sold, revenues generated, and the disbursement of such
revenues;
B. 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;
C. Customer files containing the names, addresses, phone
numbers, dollar amounts paid, quantity of items purchased,
and description of items purchased, to the extent such
information is obtained in the ordinary course of
business;
D. Complaints and refund requests (whether received
directly, indirectly or through any third party) and any
responses to those complaints or requests; and
E. Copies of all sales scripts, training materials,
advertisements, or other marketing materials.
F. All records and documents necessary to demonstrate
full compliance with each provision of this Order,
including but not limited to, copies of Page 23
acknowledgments of receipt of this Order, required by Part
X, and reports submitted to the FTC pursuant to Part XII.
G. 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,
or other evidence that confirm, contradict, qualify, or
call into question the accuracy of such claim or the
efficacy of such covered product.
XIV.
DISTRIBUTION OF ORDER BY DEFENDANT(S)
IT IS FURTHER ORDERED that, for a period of five (5) years
from the date of entry of this Order, defendants shall
deliver copies of the Order as directed below:
A. Corporate Defendant: SHN shall deliver a copy of this
Order to all of its principals, officers, directors, and
managers. SHN also shall deliver copies of this Order to
all of its employees, agents, and representatives who
engage in conduct related to the subject matter of the
Order. For current personnel, delivery shall be within (5)
days of service of this Order upon defendant. For new
personnel, delivery shall occur prior to their assuming
their responsibilities. Page 24
B. Individual Defendant Sunny Sia as Control Person: For
any business that Sia controls, directly or indirectly, or
in which Sia has a majority ownership interest, Sia shall
deliver a copy of this Order to all principals, officers,
directors, and managers of that business. Sia shall also
deliver copies of this Order to all employees, agents, and
representatives of that business who engage in conduct
related to the subject matter of the Order. For current
personnel, delivery shall be within (5) days of service of
this Order upon defendant. For new personnel, delivery
shall occur prior to their assuming their
responsibilities.
C. Sia as employee or non-control person: For any
business where Sia is not a controlling person of a
business but is otherwise directly or indirectly engaged
in the business of advertising, marketing, or selling
foods, drugs, or dietary supplements, Sia shall deliver a
copy of this Order to all principals and managers of such
business before engaging in such conduct.
D. SHN and Sia shall secure a signed and dated statement
acknowledging receipt of the Order, within thirty days of
delivery, from all persons receiving a copy of the Order
pursuant to this Part. Page 25
XV.
RETENTION OF JURISDICTION
IT IS FURTHER ORDERED that this Court shall retain
jurisdiction of this matter for purposes of construction,
modification, and enforcement of this Order.
SO ORDERED: