UNITED STATES OF AMERICA

                                               FEDERAL TRADE COMMISSION

 

____________________________________                                       

)           FILE NO.  022-3069

)

In the Matter of                                                                        )          

)           AGREEMENT CONTAINING

ROAD TO HEALTH, INC.                                                                 )           CONSENT ORDER

a corporation, and                                                        )

)

RUTH L. O’SULLIVAN,                                                        )

a/ka/ Bonnie O’Sullivan,                                               )          

individually and as an officer                              )

of the corporation, and                                                  )          

)

DALE MAXWELL,                                                                             )

an individual.                                                                             )

____________________________________)

 

The Federal Trade Commission has conducted an investigation of certain acts and practices of proposed respondents Road to Health, Inc., Ruth L. O’Sullivan a/k/a Bonnie O’Sullivan, individually and as an officer of the corporation, and Dale Maxwell.  Proposed respondents are willing to enter into an agreement containing a consent order resolving the allegations contained in the attached draft complaint.  Therefore,

 

IT IS HEREBY AGREED by and between Road to Health, Inc., and Ruth L. O’Sullivan, a/ka/ Bonnie O’Sullivan, individually and as an officer of the corporation, and Dale Maxwell, and counsel for the Federal Trade Commission that:

 

1.                  a) Respondent Road to Health, Inc., is a Nevada corporation with its principal office or place of business at 1135 Terminal Way, Suite 209, Reno, Nevada 89502-7080.

 

b) Respondent Ruth L. O’Sullivan, a/k/a Bonnie O’Sullivan, is a resident of California.  Her business address is the same as that of the corporate respondent.

 

c) Respondent Dale Maxwell is a resident of California.  For purposes of this Order, his business address is the same as that of the corporate respondent.

 

2.                  Proposed respondents admit all the jurisdictional facts set forth in the draft complaint.

 

3.                  Proposed respondents waive:

 

a.         Any further procedural steps;

b.         The requirement that the Commission's decision contain a statement of findings of fact and conclusions of law; and

 

c.         All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement.

 

4.                  This agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission.  If this agreement is accepted by the Commission, it, together with the draft complaint, will be placed on the public record for a period of thirty (30) days and information about it publicly released.  The Commission thereafter may either withdraw its acceptance of this agreement and so notify proposed respondents, in which event it will take such action as it may consider appropriate, or issue and serve its complaint (in such form as the circumstances may require) and decision in disposition of the proceeding.  Provided, however, pursuant to Section 2.34(c) of the Commission’s Rules, the Commission retains the discretion to issue a complaint and a Final Decision and Order, incorporating the order contained in a consent agreement, before seeking public comment. Unless directed otherwise by the Commission, such Decision and Order will be final upon service.

 

5.                  This agreement is for settlement purposes only and does not constitute an admission by proposed respondents that the law has been violated as alleged in the draft complaint, or that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.  Provided, however, that in the event of any subsequent litigation to collect amounts due pursuant to this order, including but not limited to a nondischargeability complaint in any bankruptcy proceeding, respondents agree that the facts as alleged in the Commission’s complaint in this action shall be taken as true. 

 

6.                  This agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may, without further notice to proposed respondents, (1) issue its complaint corresponding in form and substance with the attached draft complaint and its decision containing the following order in disposition of the proceeding, and (2) make information about it public.  When so entered, the order shall have the same force and effect and may be altered, modified, or set aside in the same manner and within the same time provided by statute for other orders.  The order shall become final upon service.  Delivery of the complaint and the decision and order to proposed respondents’ addresses as stated in this agreement by any means specified in Section 4.4(a) of the Commission's Rules shall constitute service.  Proposed respondents waive any right they may have to any other manner of service.  The complaint may be used in construing the terms of the order.  No agreement, understanding, representation, or interpretation not contained in the order or in the agreement may be used to vary or contradict the terms of the order.

 

7.                  Proposed respondents have read the draft complaint and consent order.  Respondents understand that they may be liable for civil penalties in the amount provided by law and other appropriate relief for each violation of the order after it becomes final.

 

                                                                     ORDER

 

                                                               DEFINITIONS

 

For purposes of this order, 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.                  “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

 

3.                  A requirement that a respondent “notify the Commission,” “file with the Commission” or “deliver to the Commission” shall mean that the respondent shall send the necessary information via first-class mail, costs prepaid, to the Associate Director for Division of Enforcement, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C.  20580.  Attention: In the Matter of Road to Health, Inc.

 

4.                  “Person” shall mean a natural person, organization or other legal entity, including a partnership, corporation, proprietorship, association, cooperative, or any other group acting together as an entity.

 

5.                  Unless otherwise specified, “respondents” shall mean Road to Health, Inc., Ruth O’Sullivan, individually and as an officer of the corporation, and Dale Maxwell, and each of the above’s agents, representatives, and employees.

 

6.                  “Electronic therapy device” shall mean any device that contains a magnet of any kind or produces an electric current of any kind, purporting to relieve the symptoms of, treat, mitigate, cure, heal or alleviate any disease or health condition, including but not limited to the Zapper.

 

7.                  “Food,” “drug,” and “device” shall mean as  “food,” “drug,” and  “device” are defined in Section 15 of the Federal Trade Commission Act, 15 U.S.C. § 55.

 

8.                  “Covered product or service” shall mean any food, dietary supplement, drug, device, or health-related service or program.

 

 

                                                                          I.

 

IT IS HEREBY ORDERED that respondents, directly or through any partnership, corporation, subsidiary, division, trade name, or other device, including franchisees, licensees, or distributors, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any electronic therapy device or any covered product or service in or affecting commerce, shall not make any representation, in any manner, expressly or by implication:  

 

1.                  That any such product or service is effective in (1) treating or curing cancer, leukemia, tuberculosis,  AIDS, anthrax, or bubonic plague; (2) treating or preventing bacterial infections; or (3) treating or preventing viral infections; 

 

2.                  That any such product or service is effective in the mitigation, treatment, prevention, or cure of any disease or illness;

 

3.                  That any such product or service kills viruses, bacteria or parasites in the body; or

 

4.                  About the health benefits, performance, safety, or efficacy of any such product or service,

 

unless, at the time the representation is made, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation.

 

 

                                                                         II.

 

Nothing in this order shall prohibit respondents from making any representation for any drug that is permitted in labeling for such product under any tentative final or final standard promulgated by the Food and Drug Administration, or under any new medical device application approved by the Food and Drug Administration.  Nor shall it prohibit respondents 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.

 

 

III.

 

IT IS FURTHER ORDERED that respondents shall:

A.        Within seven (7) days after service of this order upon respondents, deliver to the Commission a list, in the form of a sworn affidavit, of all consumers who purchased from respondents a  Zapper, Colloidal Silver Generator, P.A.R.-134 Body Soak, Freeze Dried Black Walnut Hull, or 21 Day Tumor Reduction Program, on or after January 1, 1999.  Such list shall include each consumer’s name and address, and, if available, the telephone number and email address of each consumer, and the full purchase price, including shipping, handling, and taxes, of the product(s) purchased from respondents.

 

2.                  Within thirty (30) days after service of this order upon respondents, send by certified mail, with postage prepaid, an exact copy of the notice attached hereto as Attachment A, showing the date of mailing, to each consumer who purchased a Zapper, Colloidal Silver Generator, P.A.R.-134 Body Soak, Freeze Dried Black Walnut Hull, or 21 Day Tumor Reduction Program, from respondents between January 1, 1999, and the date of service of this order.  This mailing shall not include any other document.

 

IV.

 

IT IS FURTHER ORDERED that respondents shall refund the full purchase price of the Zapper, Colloidal Silver Generator, P.A.R.-134 Body Soak, Freeze Dried Black Walnut Hull, and 21 Day Tumor Reduction Program, including shipping and handling and any accessories and applicable taxes, to each consumer whose initial request for a refund is received by respondents within ninety (90) days after the date the notice required by Part III.B. of this order is mailed to consumers, under the following terms and conditions:

 

1.                  If respondents’ diligent inquiry reasonably substantiates the purchaser's claim of purchase or the purchaser provides proof of purchase, including but not limited to any of the following: return of goods or packaging, canceled check[s], credit card invoice[s], or receipt[s], the refund shall be paid within fifteen (15) business days of respondents’ receipt of the refund request.

 

2.                  If the purchaser makes a timely request for a refund but neither of the conditions of Subpart A is satisfied, respondents shall advise the purchaser, within fifteen (15) business days of receipt of the request for refund, that respondents will provide a prompt refund if the purchaser completes and returns to respondent, within fifteen (15) days of receipt of the notice, a declaration of purchase, which the respondents shall provide together with a stamped and addressed return envelope.  The declaration shall be substantially in the form of the declaration attached hereto as Attachment B.  The refund shall be paid within fifteen (15) business days of respondents’ receipt of the purchaser's completed declaration.

 

Refund requests shall be sent to Road to Health, Inc., 1135 Terminal Way, Suite 209, Reno, Nevada 89502.

 

 

V.

 

IT IS FURTHER ORDERED that respondents shall, no later than one hundred and eighty (180) days after the date of service of this order, deliver to the Commission a monitoring report, in the form of a sworn affidavit.  This report shall specify the steps respondents have taken to comply with the terms of Parts III and IV of this order and shall state, without limitation:

 

1.                  The name and address of each purchaser to whom respondents sent the notice attached hereto as Attachment A as required under Part III;

 

2.                  The name and address of each purchaser from whom respondents received a refund request;

 

3.                  The date on which each request was received and the amount of the refund requested;

 

4.                  The amount of the refund provided by respondents to each such purchaser;

 

5.                  The status of any disputed refund request and the identification of each purchaser whose refund request is disputed, by name, address, and amount of the claim; and

 

6.                  The total amount of refunds paid by respondents.

 

 

                                                                         VI.

 

IT IS FURTHER ORDERED that respondent Road to Health, Inc., and its successors and assigns, and respondents Ruth L. O’Sullivan and Dale Maxwell shall, for ten (10) 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:

 

7.                  All advertisements and promotional materials containing the representation;

 

8.                  All materials that were relied upon in disseminating the representation; and

 

9.                  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.

 

 

                                                                        VII.

 

IT IS FURTHER ORDERED that respondent Road to Health, Inc., and its successors and assigns, and respondents Ruth L. O’Sullivan and Dale Maxwell shall deliver a copy of this order to all current and future principals, officers, directors, and managers, and to all current and future employees, agents, and representatives having responsibilities with respect to the subject matter of this order, and shall secure from each such person a signed and dated statement acknowledging receipt of the order.  Respondents shall deliver this order to current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities.  Respondents shall maintain and upon request make available to the Commission for inspection and copying each such signed and dated statement.

 

 

VIII.

 

IT IS FURTHER ORDERED that respondent Road to Health, Inc., and its successors and assigns, and respondents Ruth L. O’Sullivan and Dale Maxwell shall, for a period of five (5) years following  the date of entry of this order, send a copy of  this order to any distributor of any covered product or service and shall secure from each such distributor a signed and dated statement acknowledging receipt of the order.  Respondents shall maintain and upon request make available to the Commission for inspection and copying each such signed and dated statement.  For purposes of this Part, “distributor” shall mean any purchaser or other transferee of any covered product or service who acquires such product or service from respondent, with or without valuable consideration, who: (1) is known by respondents to have sold or offered to sell such product or service to other sellers or to consumers, including but not limited to individuals, retail stores, or catalogs, or (2) orders twenty (20) or more such units of any such product or service in any three month period.

 

 

                                                                         IX.

 

IT IS FURTHER ORDERED that respondent Road to Health, Inc., and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent, such as dissolution, assignment, sale resulting in the emergence of a successor corporation, or the creation or dissolution of subsidiaries or any other change in respondent that may affect compliance obligations arising out of the Order.

 

 

X.

 

IT IS FURTHER ORDERED that respondents Ruth O’Sullivan and  Dale Maxwell, within five (5) days of entry of this order, shall each notify the Commission of (1) his or her residence address and mailing address; (2) telephone number(s); (3) if applicable, the names of his or her employer and supervisor(s); and (4) his or her duties and responsibilities.

 

 

                                                                         XI.

 

IT IS FURTHER ORDERED that respondents Ruth O’Sullivan and  Dale Maxwell, for a period of ten (10) years after the date of entry of this order, shall each notify the Commission of (1) any changes in residence address, mailing address, or business address; (2) the discontinuance of current business or employment; and (3) affiliation with any new business or employment.  Notice of changes in employment status shall include: (1) the new employer’s name, address and telephone number; (2) the full names of the employer’s principals; (3) if applicable, the names of respondent’s supervisors, and (4) a description of the employer’s activities, and respondent’s duties and responsibilities.

 

 

                                                                        XII.

 

IT IS FURTHER ORDERED that respondent Road to Health, Inc., and its successors and assigns, and respondents Ruth L. O’Sullivan and Dale Maxwell shall, within sixty (60) days after the date of service of this order, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which respondents have complied and are complying with this order.

 

 

                                                                       XIII.

 

This order will terminate twenty (20) years from the date of its issuance, or twenty (20) years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a

complaint will not affect the duration of:

 

A.        Any Part in this order that terminates in less than twenty (20) years;

 

1.                  This order’s application to any respondent that is not named as a defendant in such complaint; and

 

C.        This order if such complaint is filed after the order has terminated pursuant to this Part.

 

Provided, further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

 

 

Signed this                  day of __________, 2001.  

                        

 

 

ROAD TO HEALTH, INC.

 

 

____________________________

by:  RUTH L. O’SULLIVAN,

President         

 

 

____________________________

RUTH L. O’SULLIVAN, individually and as an officer of the corporation

 

 

 

____________________________

DALE MAXWELL

 

 

____________________________

MICHAEL MILGROM

Counsel for the Federal Trade Commission