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UNITED STATES OF AMERICA BEFORE FEDERA TRAE COMMISSION OFFICE OF ADMINISTRATIVE LAW JUGES In the Maller of BASIC RESEARCH, LLC a limited liability company; G. WATERHOUSE, L. a limted liability corporation KLEIN-BECKER USA, LLC a limited liability company; NUTRSPORT, LLC, a limited liability company; SOY AGE DEROGIC LAORATORI, LLC a 1imited liability company; D..ket N.. 9318 BAN, LLC, a I1rnited liability corpation. also doing business as BASIC RESEACH, L. OW BASIC RESEARCH, L.L.C. BASIC RESEARCH, A.G. WATERHOUSE KLIN-BECKER USA, NUTRA SPORT, and SOV AGE DERMALOGIC LABORATORIS, PUBLIC DOCUMENT DENNIS GAY individualy and as an offcer of the limited liability corporations. DANIEL B. MOWREY, Ph. Also doing busines:i as AMRICAN PHYTOTHRAY RESEARCH LABORATORY, and MITCHL K. FRDLAER Respondents. RESPONDENT MITCHELL K. FRDLANER' S REPLY TO COMPLAINT COUNSEL'S OPPOSITION TO RESPONDENTS' MOTIONS FOR A MORE DEFINITE STATEMENT AND MOTION FOR LEAVE TO FILE SAME. WI CERTIFICATE OF SERVICE AND CEKIUICATE OF ELECTRONIC FIING Docket No. 9318 Respndent Mitchell K. Friedlander ("Respondent Friedlander ), herby files ths Reply to Complaint Counsel's Opposition to Resondents' Motions for a More Deftnite Statement ("Opposition ), and in support state as follows. INTRODUCTION In its Opposition, Complaint Counsel essentially argues that lhe complaint fied against Respondent Friedlader is clear and concise enough under 16 C. R. 1l for Resondent Friedlander to ascerain the pratices alleged to violate the Federal Trae Commission Act. Complaint Counsel, however, employs ever-shll legal tenns of ar, and vague, subjective wording that frtrates Respondent Friedlander s abilty to understad how the adverisements are being intCIreted by the Commission, and leaves the ultimate decision of definig the natur of the charges against Respondent Friedander to the Admnistrative Law Judge, not Complaint Counsel. Such a practice necessari1y means the coplait is defective and fail8 to satisfy Complaint Counsel's statutory burden. RELEVANT l'ACrS On June 28, 2004, Respondent Friedlander filed his Motion to Dismss Complaint for Lack of Definiteness ("Motion to Dismiss ) because Complaint Counel's complaint failed (0 defie key elements of its operative aUegations and was therfore fatally defecive. These key clements included the ter "Raid," "Substantial VisibJy Obvious;' " CauSe$" and Reasonable Basis." As a result of the indefiniteness of these tenus, Respondent Friedlander asserted tbat he was unble to apreciate with "reasonable definiteness of the type of acts or practices alleged to be in violation of the law" under 16 C. R. 3.11(c). On July 8, 2004, Complaint Counel fied their Opposition to Respondent Friedlander Motion to Dismiss. Although the document was captioned "Complait Counsel's Opposition to Page 2 of9 Docket No. 93 I 8 Respndents' Motions fOf a More Defite Statement," Complaint Counel noted that it was directing its opposition "to both Resondents ' Motion for a More Defmite Statement and pro se Respndent Mr. Friedlander s Motion to Dismiss Complaint for Lak of Definiteness:' See, Oposition, fn. 1. The Opposition atvanced several arguments to support the propriety of the complaint including the contention that it is in compliance with 16 C. R. 3. , and tbat the vagueness of the lega1 tenns can be remeded by researh or discovery. However. neither argwent Cur the flaws highlghted in Respondent Friedander s Motion to Dimiss. II. ARGUMENT Respondent Friedlander stads accus of cerai deceptive practict:s as set fort in the complaint. Complaint Counsc) has taen the position that Respondent Friedaner s Motion to Dismiss should be denied because the tennology and staar set fort in the complaint ar so weH understood as to not requir furcr definition. For example, the Opposition suggests that Respondents should be aware of the definitions of the tens "substantial raid," "visibly obvious" and "causes" because the accused adversements employ similar language. Morever, Complait Counsel argues tilt discovery will cure any ambiguity in the complait. With re!qect to the ten "reasnable basis " Complait CoWleJ has aserted that the Adm$tratve Law Judge will inevitably deide what is meant by these words. Complaint CounseJ, however, is attempting to side-st both tbe duty to properly arculate the interretation of the advertsements, and the standads agaist which the Respondent Friedlander s conduct can be measured. To frae a defense in th$ case, Respondent Friedlander must fit undertad, with clarty, what the Commission believes the advertising at jssue mems. and second, what lega Page 3 of9 Docket No. 9318 benchmarks he stands accuse ofvjolating. Litigaton is inhertly a compartive anlysis. The accusing pary asserts a violation of a known standard and the defending pary is left to explain why the arculated standad was not breahed or violated. Her, tht compartive anysis begins with the Commisions interpretation of the advertising and ends with a detenination as to wheter such adverising was lawful. As the accusing par in ths case. Complaint ('..unsel must therefore arculate with clarty Respondent Friedlander s behavior as well as those standads that it claims Respndent Friedlaner has violated. In the absence of such paricularity, Complaint Counel wil have the from to shift its theories upon a whim and Respondent Friedlander wil be ftstrted in hi ability to prear and present a defense. The Meaning Of The Terms "Rapi "Substantia!," "Visibly Obvious" And "Caules" Are Amurphous Terms Subject To Multiple Meanings And Must Be Bettr Defied The complaint agwnst Respondet Friedander alleges that the accused adversing expressly Qf impliedly conveys that the products in queston wi1l "Cawe" fat IQS8 that wi1 be Rapid Substantial" and/or "Visibly Obvious." Basoo on the fact that (i) these terms do not appear in the accued adversing; (ii) no definitjons of these tens are provided; an (iii) an undertandig of these tens is abolutely necessar to evaluate the appropriate level of support needed for the advertisi.ng, Respondent Friedlander moved to dismiss the complaiI1l. In TCspnse, Complaint Counsel essentially argues that the aced advertisements either use the same1 or similar ters, and as such, thcir meags should be undersood. See Opposition, page 8. For example, Complait Counsel contends that "Substantial" and " Rapid" are dea becaus the te "signficaL" appear in the accused adversing as weU as a col1ection of words tbat imply that fat loss wil be quick and/or fast. respecvely. See Oposition, page 9- It is respectfully pointe out that none of the accused adverisements used these exact ter. Page 4 of9 Docket No. 9318 10. Using similar reasg, C.Qmplaint Counl asserts th the terms "Visibly Obvious" and 'Causes .. arc "derived" tram Respondents' advertiseents. In other words, Complait Counl is suggestig th Respondent Friedlader alrey knows precisely wbat "Rapid Substantial:' " Causes " and " Visibly Obvious'" mean bas on the usage of simi1ar ters in the acused adverements. It would therefore logically follow that Resondent Friedlander s answer to the chages against him may be predicated on what he believes these words mean. Respondent Friedlander resectfully reuests clafication as to whelhr ths is what Complait Counsel intended. , on the other hand, the Commission is. in fact, I'ponsble for deterng these meanings, Respondent Friedlander mU5t be advised of such meaings. Otherse. Resondent Friedlander is left to guess andlor accurtely predict what those defmitions wm be. Even Respondent Friedlander were inlined to guess or predict such meag.o;, the tens in question are subjective, relative ter!i providing no adequate benchmark, no gudane as to what is objectionable, and no adequate notification of the acts of whkh Responden Friedlader stands accused. Complaint Counel contention that fuer defiition is unecessar is mislacd. At prest, Respondent Friedlaner is not awar of whether "Substatial" fat loss concers the loss of5, 50, 100 pounds oemore; wheer "Rapid" fat loss concer loss over the coure of one day, one week, Qne month, or more; or whethe "Visibly Obvious" fat loss mea visible to lhc subject or other paries. Thus, Complait Counsel's contention tht further definition is With respect to the ten "Causs " Complant Counsel mistakenly assmnes the objt:l,uon is predicated on a lega causation arguent See Oposition, page 10 citing, Pal3grafv. Long Island Railrod Co. 248 NY 339 (1928). To the contr, the objection is predicated on the fact that the tenn is susceptible to multiple meanngs. In lhe- context of effcacy claims for example, it is possible that a "Cause" may be contrbutory or exclusive caus. PageS of9 Docket No. 9318 unnecessary 1S tantaount to contending that Respondent Friedlander s anwer would be the same regardless of whether "Substantial" and "Rapid" meant 5 pounds per week. or 50 pounds per week, or otherwise. Complait Counel fuer argus that additional innnation concernng the definitions of these tcms may be asceraied through discovery. Respondent Friedlander repectfully notes that, assung the Commission has intereed the impJicd meangs of advertsements, it is not possible to depose the Comssion underthe aplicable rules. 16 C.F.R. 93.33(c). Accoringly, Complait Counse1 must prvide adequate definitons for the tenns SubstantiaJ Rapid Causes" and "Visibly Obviou" and clafy whether such definitions ar binding upon the Commission. Otherse, the complai should be dismissed as being fatally defective. The Term "Reasonable Basis" Is Not Adequately Defied Even asswng, argndo that th foregoing tenns wer aduately defIned, the complat alleges that the Respondent Friedlander lacked a "reasonable basis" for the reprentaton. The Oposition state that the meanng of "reasonable basis . . . has been established over time thugh jursprdence and other materials:' See Opposition. page 7. The Opsition, however, then cites varous authority in support afthe conclusion Iballhe reasnable bMis requient is "deterined on a case-by-cas bass" such thi "ths Cour will detenine the meaing durg the coure of the proceedings. See Opposition, page 7. The flaw in Complaint Counel's logic is self-evident. If. as their Opposition contends the meaing of the phre ''reasonable basis " is "well-etablished" it cannot simultaeously be the case that "this Court win detenjne the meaning during the course of the proeedings. See Opsition. page 8. To the contry. such logic establishes tht the phre is not well-defmed. Page 6 of9 Docket No. 9318 Moreover, if the Administrative Law Judge is left to determine the standard's meag, Complaint Counel has essentially shifed to the Cour the buren of infonning Respondents of what standard they allegedly failed to meet. In its Oposition, Complaint Counel repeatedly contends that it has met the mimn pleadings standas required under FTC law. Yet. if the pleading stadars mean anytg, they must reuie a complaint to set fort not just Respondents' behavior. but how that behavior violates the law." Otherse, Respodent Friedander has been given the impossible task of predicting, in his anwer and going forwar, at what point their behavior allegedly became unlawful Until Complaint Counsel defies the paricula of what substantiation was needed 10 consttute a "reasonable basis" for the challenged advertsements in this case. Respondent Friedlander is unble to evaluate, defend and preare their cae. Indee Complait Counsel's own authority establishes tht the COnmssion bear the burden of allegig and proving in each case the amount of substatiation required to constitute a reasonable basis." FOT example, the Opposition cites Pfner Inc.. 81 F. C. 23 (1972) in ths regard. See Oposition. page 8. With respet to simple elas of effcacy, PfIZer holds tht the Commission itself may identify the approriate level of substantialion for ad tht do not expresly Of impliedy claim a parcular level of substatiation. Thompson Medical Co. v. FTC. 791 F.2d 189, 194 (D. Cir. I986). cert. denied 479 U.S. 1086, 107 S.C!. 1289 94 L.Ed. 146 (1987) (emphass added). With respect to claims that ar more specH'i. the advertiser must possess the level of proof claimed in the ad, however , (i)f the clai is more general, but nevereless constitutes an establislent claim, the FTC wil specif the natu an extent of substatiation that will support the claim:' Thompson Medical Co. 791 F.2d at 194 (emhais added). Page 7of9 Docket No. 9318 Thus, in this case, if Complaint Counsel believes that a "reasonable ba6ls" reuir parcular types and amounts of information, they should be required to allege the same in its complaint. With these paicular, Respondent Friedlander can commence his defense with a clea undertandig of the alleged shortcomings of the adversement substatiation. In the absence of such pariculan, Complaint Counsel will reai fre to argue, in the face of whatever proofs are offer tht a "reasonable basis" in this case requires something more than what has been offered. Re:pondent Friedlander should not be left to defend agaist a moving taget and the complaint should therfore state, up front. the benchmark agaist which Complait Counsel wil ask ths Cour to measure the adequacy of Respondent Friedlander s adversing substantiation. IV. CONCLUSION Based on the foregoing, Respondent Friedander respetfuly reuests the Administrtive Law Judge dismss the complait based on Camptaint Counel' s failur to adequately define the operative allegations therein. Alteratively, Respondent Friedhmder respecfully reques.ts that the Admstrtive Law Judge require Complaint Counl to amend its complaint in order to better defme the operive aHegations therein, specifically, the ters " Rapid Substatial:' Visibly Obvious;' ''' Causes'' and "Reasnale Basis. MOTION FOR LEAVE TO FILK REPLY TO OPPOSITION Respondent Friedlander believes that Complait Counsel' s Opsition raises new issues iTom those present in his Motion to Dismiss. The iNtant Reply adds these issues. Accrdgly, RcsJXndent Friedtader respectfully requests pemrssion for leave to fie same, or to join the additional Respndent5' Motion in this regard , and tht the Adminstrtive Law Judge consider the foregoing prior to ruling. Page 8 of9 Docket No. 9318 CERTIFICATE OF SERVICE I HEREBY CERTIF that a tre and correct copy of the foregoing was provided to the following paries ths 13th day of July, 2004 as follows: (1) The original and one (2) copies by hand deliver to Donad S. Clark, Secreary, Federal Trade Commission, Room H-159, 600 Pennsylvana Avenue, N. , Washigton, D. 20580; (2) One (1) electronic copy via e-mail attachment in Adobe il " pdf' fannt to the Secrery of the I' rc at Secretar ftc. l!ov (3) Two (2) copi.. by had delivery to Administrative Law Judge D. Michael Chappell, Federal Trade Commission, Room H-I06, 600 Pensylvaa Avenue N. Washingtn, D.C. 20580; (4) One 0) copy via e mal attachment in Adabel! " pdf' formt to Comission Complaint Coune(, Laurn Kapin Joshua S. Milard, Robin Richaron, and Laur Schneider, all care of lkapin(fJtc.gov with one (1) paper courcsy copy via U. S. Postal Serce to Laeen Kapin. Bureau of Consumer Prtection, Feder1 Trade Conusion. Suite NJ-2122, 600 Pennsylvania Avenue, N.W.. Washingtn, D.C., 20580; (5) One (1) copy via U. S. Postl Serce to Elaine Kolish, Associate Dirtor in th Bureau ofCommmer Prtection, Federl Trade Commission, 600 Pennsylvania Avenue, N. Wasingtn, D.C. 20580 (6) One (1) copy each via United States Postal Serce, searately, 10 Basic Resarh LLC. A.G. Waterouse, LLC, Klein-Becker, LLC, Nul1sport, LLC. Savage Denogic Laboratories, LLC, BAN, LLC. Denis Gay, an Daniel n. Mowrey, Ph. , eah c/o the Compliance Deparent, Basic Researh, LLC, 5742 West Harld Gatty Drive, Salt Lae City, Utah 84116. CERTIFICATION FOR ELECTRONIC FIING I FURTHER CERTIFY that the electronic version of the foregoing is a tre and caneel copy of the original docment being filed this same day of July, 13 2004 via hand deliver with the Offce of the Secretar, Room H- I's9. Fooeral Trae Commssion, 600 Penylvana Avenue, , Washingtn, D.C. 20580. Page 9 of9 Mitchell K. Friedlander c/o Compliance Depaeat 5742 West Harld Getty Drve Sall Lake City, Utah 84116 Telephone: (801) 414,1800 facsimile: (801) 517,7108 Pro Se Respondent