Stipulated Final Order for Permanent Injunction and Monetary Relief Paradise Garage | ||||
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© 2003 Brian F. Schreurs
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MIDDLE DISTRICT OF NORTH CAROLINA
___________________________________ ) FEDERAL TRADE COMMISSION, ) ) Plaintiff, ) CIVIL ACTION ) NO. 1:01CV00126 v. ) ) ) SPEEDWAY MOTORSPORTS, INC., and ) Judge Bullock OIL-CHEM RESEARCH CORP., ) ) ) ) Defendants. ) ___________________________________)
Plaintiff, the Federal Trade Commission ("FTC" or "Commission"), filed a Complaint for permanent injunction and other relief against Speedway Motorsports, Inc., and Oil-Chem Research Corp. pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b). Defendants deny the FTC's allegations. The Commission and Defendants have agreed to the entry of the following Stipulated Final Order for Permanent Injunction in settlement of the Commission's complaint against Defendants. The Court, being advised in the premises, finds:
1. This Court has jurisdiction of the subject matter and of the parties. 2. The Complaint states a claim upon which relief may be granted against Speedway Motorsports, Inc. ("Speedway"), and Oil-Chem Research Corp. ("Oil-Chem") under Sections 5(a) and 13(b) of the Federal Trade Commission Act, 15 U.S.C. §§ 45(a) and 53(b). 3. Venue is proper as to all parties in the Middle District of North Carolina. 4. The activities of Speedway and Oil-Chem are in or affecting commerce, as defined in the FTC Act, 15 U.S.C. § 44. 5. Defendants deny the Commission's allegations and nothing herein shall be construed as an admission or finding of liability or misrepresentation by Defendants. With respect to the applicable standard for evaluating Defendants' conduct under the FTC Act, Defendants contend that the applicable standard is the "reasonable basis" standard. Defendants deny that the applicable standard is the "competent and reasonable scientific evidence" standard. Defendants contend that zMAX produces results through a number of unique properties not found in other products. 6. Speedway and Oil-Chem have waived all rights that may arise under the Equal Access to Justice Act, 20 U.S.C. § 2412, amended by Pub. L. 104-121, 110 Stat. 847, 863-64 (1996). 7. This action and the relief awarded herein are in addition to, and not in lieu of, other remedies as may be provided by law. 8. Each party shall bear its own costs and attorneys' fees. 9. Entry of this Order is in the public interest. 10. Pursuant to Federal Rule of Civil Procedure 65(d), the provisions of this Order are binding upon Defendants, and their officers, agents, servants, and 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.
For the 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 have 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, "Defendants" shall mean:
3. "zMAX" shall mean the aftermarket motor vehicle product known as the zMAX Power System, or any product of substantially similar composition marketed for use in motor vehicles. 4. A requirement that any Defendant "notify the Commission" or "file with the Commission" shall mean that the Defendant shall send the necessary information via first class mail, costs prepaid, to the Associate Director for Enforcement, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20508. Attn: FTC v. Speedway Motorsports, Inc., et. al., (M.D. N.C.). 5. The term "including" in this Order shall mean "without limitation." 6. The terms "and" and "or" in this Order shall be constructed conjunctively or disjunctively as necessary, to make the applicable phrase or sentence inclusive rather than exclusive.
IT IS HEREBY ORDERED that Defendants, directly or through any corporation, partnership, subsidiary, division, or other device, and their officers, agents, servants, and 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 zMAX, or any other product for use in any motor vehicle, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication, that such product:
unless at the time the representation is made, Defendants possess and rely upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.
IT IS FURTHER ORDERED that Defendants, directly or through any corporation, partnership, subsidiary, division, or other device, and their officers, agents, servants, and 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 product, service or program, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, the existence, contents, validity, results, conclusions or interpretations of any test, study, or research.
IT IS FURTHER ORDERED that Defendants, directly or through any corporation, partnership, subsidiary, division, or other device, and their officers, agents, servants, employees, and attorneys, 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 product, service or program, in or affecting commerce, shall not misrepresent, in any manner, expressly or by implication, that endorsements or testimonials reflect:
For purposes of this Part, "endorsement" shall mean as defined in 16 C.F.R. §§ 255.0(b).
IT IS FURTHER ORDERED that Defendants shall pay refunds to purchasers of zMax in the amount of $1,000,000.00, in accordance with the provisions of this Part. Administrative expenses will be borne by Defendants in addition to this amount.
For purposes of this Part, "purchaser" shall mean any person who has purchased zMax and who has not previously received a full refund of the purchase price.
IT IS FURTHER ORDERED that Defendants, for a period of five (5) years after the last date of dissemination of any representation covered by this Order, shall maintain and upon request make available to the Commission for inspection and copying:
IT IS FURTHER ORDERED that Defendants, for a period of five (5) years after the date of service of this Order, shall deliver a copy of this Order to all current and future officers and directors, and to all managers, 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. Defendants shall deliver this Order to current personnel within thirty (30) calendar days after the date of service of this Order, and to future personnel within thirty (30) calendar days after the person assumes such position or responsibilities. Defendants shall maintain and upon request make available to the Commission for inspection and copying each such signed and dated statement for a period of five (5) years after such statement is signed.
IT IS FURTHER ORDERED that Defendants shall, for a period of five (5) years, notify the Commission at least thirty (30) calendar days prior to any change in either corporation 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 corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this Order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided, however, that, with respect to any proposed change in either corporation about which Defendants learn less than thirty (30) calendar days prior to the date such action is to take place, they shall notify the Commission as soon as is practicable after obtaining such knowledge.
IT IS FURTHER ORDERED that Defendants shall, within sixty (60) calendar days after the service of this Order, file with the Commission a report, in addition to any initial report, in writing, setting forth in detail the manner and form in which they have complied with this Order. Defendants have submitted an initial compliance report dated December 23, 2002 describing the means by which they will comply with Parts I-III of this Order. The staff has sent a letter dated December 26, 2002 responding to Defendants' initial compliance report.
IT IS FURTHER ORDERED that the Commission is authorized to monitor the compliance of Defendants with this Order by all lawful means, including but not limited to the following means:
IT IS FURTHER STIPULATED AND ORDERED that, within fifteen days after service of this Order, Defendants shall submit to the Commission a truthful sworn statement, in the form shown on Attachment D, that shall acknowledge receipt of this Order.
IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for purposes of construction, modification, and enforcement of this Order.
IT IS SO ORDERED, this _____ day of _____________, 2002 in Greensboro, North Carolina. UNITED STATES DISTRICT JUDGE
Forwarding and Return Postage Guaranteed: [address of consumer refund administrator] Window Envelope [The following statement is to appear in a box, on the left hand side of the envelope in red, in extra large, bold type face] ATTENTION: IMPORTANT REFUND INFORMATION INSIDE
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MIDDLE DISTRICT OF NORTH CAROLINA
___________________________________ ) FEDERAL TRADE COMMISSION, ) ) Plaintiff, ) CIVIL ACTION ) NO. 1:01CV00126 v. ) ) ) SPEEDWAY MOTORSPORTS, INC., and ) Judge Bullock OIL-CHEM RESEARCH CORP., ) ) ) ) Defendants. ) ___________________________________)
William R. Brooks, being duly sworn, hereby states and affirms: 1. My name is William R. Brooks. I am a citizen of the United States and am over the age of eighteen. I have personal knowledge of the matters discussed in this declaration, and if called as a witness, I could and would competently testify as to the matters stated herein. I am Vice-President and Chief Financial Officer of defendant Speedway Motorsports, Inc., and Director and Vice-President of defendant Oil-Chem Research Corp. 2. My business address is ____________________________________ My current business telephone number is ________________________. 3. On (date) _________________, I received a copy of the Stipulated Final Order and Settlement of Claims for Monetary Relief as to Defendants Speedway Motorsports, Inc., and Oil-Chem Research Corp., which was signed by the Honorable Frank Bullock, United States District Court Judge for the Middle District of North Carolina. A true and correct copy of the Order that I received is appended to this Affidavit. I hereby declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on (date) ________________, at (city, state) _______________, ______. William R. Brooks STATE OF NORTH CAROLINA COUNTY OF ______________ BEFORE ME this day personally appeared William R. Brooks, who being first duly sworn, deposes and says that he has read and understands the foregoing statement and that he has executed the same for the purposes contained therein. SUBSCRIBED AND SWORN TO before me this _____ day of _____________, 2002, by William R. Brooks. He is personally known to me or has presented (state identification) ______________________ as identification. Print Name
NOTARY PUBLIC
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