UNITI~D STATES DISTRICT COURT

EASTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

,"

qvc, INc.,

Defendant/Third-Party Plaintiff,

v.

VITAQUEST INTERNATIONAL: INC.,

et al.,

Third-Party Defendants.

Civil Action No. 04-1.276

(The Honorable John P. Fullam)

CONSENT DECREE

WHEREAS: Plaintiff, the United States of America, filed its Complaint in this action ~or

monetary civil penalties, consumer redress, injunctive and other reliefpursuam to 15 U,S.C.

§§ 45(a), 45(/), 52, 53(b), and 56(a) against defendant QVC0 Inc. ("QVC")~ alleging violations of

the Order e~atered by the Federal Trade Commission ("FTC".or "Commission") on June 14,

2000, in a Commission proceeding bearing Docket No. C-3955~ .and Section 5(a) of the FTCAet,

15 U,S.C. §

WHEREAS, plaintiff and defendant have been represented by counsel and have agreed to

the entry of this Consent Decree by this Courl to resolve all matters of dispute between the

plaintiff and defendant, and to.satisfy all monetary claims asserted by the plaintiff, with respect to

the conduct of defendant alleged in the Complaint in thfs action, without trial or further
adjudication of any issue of fact or law and without defendant admittir~g liabihty for any of tha

matters alleged in the Complairft;

THEREFOR.E, on the joint motion of plaintiff and defendartt, it is hereby ORDERED,

ADJUDGED, and DECR~ED as follows:

1, This Court has jurisdiction over the subjeot matter and the parties.

2, The Complaint state, s a claim upon which relief may be granted against defendant under

Seetiom 5(a), 5(/), t2, 13~b) and i6(~) of the l~ederal Trade " .C, ommissiou ACt

U.S.C. §§ 45(a), 45(/), 52, 53~) and

3. The following definition shall apply to this Consent Decree: "Commission’s Order"

means the FTC Order inFTC Docket No. C-3955 (2000), a copy of which is attached hereto as

Exhibit A and made a part of this Order.

L

CITII~ PENAL,TY

IT.IS FURTHER ORDERF~D that:

A. Pursuant to Section 5(/) of the FTC Act, 15 U.S.C. § 45(/), defendant QVC shall

pay a monetary civil penalty of One Million, Five Hundred Thousand Dollars

(~1,500,000).

B. Defendant QVC shall make the payments required by Subpar~ A of this Part,

.within five (5) days agtcr the date of entry of this Order byeleetroni¢ fund transfer

in accordance with the instructions provided by: The Office of Consumer

Litigation, Civil Division, U.S. Department of Justice, Washington, D.C’. 20530.

In the event of any default in payment, which default eontinu~ for ten (10) days

beyond the due date of payment, the entire unpaid penal~y, together with interest

2
as computed pursuant to 28 U,S.C. § 1961 from the date of default to the date of

payment, shall immediately become due and payable.

CONSUMER R~DRF~S

~T ]~S FURTI~R OR~.ERED tha~ no later than five (5) days after the date of entry of

tiffs Consent Decry, defendant QVC shall pay to the Commission the sum of Six .Million Dollars

($6,000,000) under the following terms and conditions:

A. The payment shall be made by wire transfer or certified or cashier’s check made

payable to the Federal Trade Commission.

B, .In the event of any default on any obligation to make payment under this Part,

which default continues for ten (I0) days beyond the due date of payment, the

entire unpaid amount, together with interest as computed pursuant to 28 U,S.C.

§ 1961 from the date of default to the date of payment, shall immediately become

due and payable.

C. :All. funds paid pursuant to.this Part shall be deposited i~to a fund. administered by

the Commission or its agent to be used for equitable relief, including but not

limited to Consumer redress for consumers who purchased from defendant any of

the products specified in paragraph II.D,!,, ~ and any attendant expenses for

the administration, of any redress fund. In the event that direct redress to

comumers 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 information remedies) as it determines tb be reasonably

related to defendant QVC’s practices a!leged in the Complaint. Any funds not

3
applied by the Commission for such equitable r~lief shall be deposited to the

Un~d States ~ ~ equable ~sgo~m~nt. D~f~dmt QVC sh~! ~w no

d~t ~ c~l~ng~ ~ Commission’s choi~ of~m~s ~d~ ~is P~. No

portion of~y pa~ems ~d~r ~is P~ shall ~ d~emed a

p~a~, pu~w ~ssm~nt, or forfeiture.

Wi~in sJ~ (60) ~ys ~om ~c da~ ofen~ of~s Cons~t D~, d~f~nd~t

QV~ m~t:

1. Compile a mailing list idenfi~ing e~h person who p~

follow~g products ~om QVC, d~ng ~c ~dod from J~ 14, 2000,

through ~e date ofen~ oftMs Cogent D~:

f.

g;

h.

i.

j.

k.

Bee-Alive Feel G-ood 90 Day System

Bee-Alive Sweet Energy Royal Jelly

Bee-Alive Pure Royal Jelly

Bee-Alive 10 Piece Pick-Me-Up Formula

For Women Only Zero Fat

For Women Only Advarteed Zero Fat

 ̄For Women Only Zero Fat Ultra

For Women Only Zero Carb

For Women Only Advaneed Zero Carb

For Women Only 30 Day Weight Control System

All Lite Bites products

Lipofaetor Target Lotion

Lipofaetor Target Spray

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2. .Include on the list the p~rson’s name and last known address, the name

and quantity of product(s) purchased, the total cost of the product(s)

purchased, 0rid any refunds or credit previously provided; and

3. Provide Commission staffwith a copy of the mailing list in a mutually

agreeable eleer~’onie form on (I) a product-by-produ~t basis and (2) an

overall basis.

HI.

PROHIB~ION AGAINST VIOLATING COMMISSION’S ORDER

FF 1[$ [¢URTtIER ORDI~R~D that defendam QVC, and its successors and assigns, and

their officers, agents, r~pre.sentatives, and employees, and all persons in active concert or

participation wffh them who receive actual notice of this Consent Decree by p~rsonal service or

otherwise, directly or through any corporation, subsidiary, division, or other device, are h~reby

permanently enjoined from violating.any provision of the Commission’s Order as modified in the

manner provided inPart IV of this Consent Decree.

IV.

FIF l[S $’URTHER ORDERED that, defendant QVC shall consent to: reOl~ning of the

proceeding in FTC Docket No._C-3955; waiver of it~ rights under the show came procedures set

forth in Section 3:/.2(’o) of the Commission’s Rul~s of:Practice, 16 C.F.R. § 3.72(b); and

modification of the.Commission’s O~er as follows:

A. By renumbering. Parts It, HI, IV, V, VI, VII, VIII, and IX as Parts [II, IV, V, VI,

VI!, VIII, IX, and X, respectively;

B. By adding a new Part II of the Commission’s Order that reads as follows:
IT IS FURTHER ORDERED that msponden~ directly or

through any corporation, subsidiary, division or other device, in

conneotion with the manufacturing, labeling, advertising,

promotion, offering for sale, sale, o~" distribution of Lipofaetor or

any other drug or cosmetic, ss "drug" and "cosmetic" are defined

in Section 15 of the Federal Trade Commission Act, in or affecting

commerce, are hereby permanently enjoined from making any

rep~sentatio.n, in-any manner, expressly or by implication,

indluding, but not limited.to, through the use Of before-and-after

depictions, or endorsements thai suoh product:

A. Eliminates or reduces cellulite; or

Causes measurable inch loss from usea’s’ oa-ms, thighs,

abdomens, or other targeted areas of the body,

unless, at the time the representation is made, respondent possesses

and relies upon competent and reliable seieutifie evidence t.hal

substantiates the representation.

Co By replaoing the current language in the newly designated Part X with the

following:

This Order will .termiu~te.twenty (20) years from the date this order,

as modified, is issued, or twenty years from the most.recent date

that the United States or the Federal Trade Commission files a

complaint (with or without an aeeompmaying consent decree) in

federal court alleging any violation of the order, whichever comes

later;, p..~vided~ however, that the filing of such a eomplainl will

not affect the duration of:

Ao Any Part in t:his order that terminates in less thma twenty

(20) years;

6
This order’s application to any respondent that is not named

as a defendant in such complaint; and

This order if such complaint is filed after the order has

t~Tminated pv.rsuant to this Part.

provideA~ further, that if such complaint is dismissed or a fedvral

court rules that the respondent did not violate any provision of the

order, and the dismissal or ruling is either not appe~led or upheld

on appeal, then the order wit! t~tminatc according to this Part as

though the complaint had never be~n filed, except that the order

will not terminate Imtween 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.

DISTKtBUTION OF CONSENT DECREE BY DEFENDANT

liT ~S FURTHER ORDERED that. defendant QVC, and its succ.e~sors and assigns, shall,

within thlrty (30) days after the date of.entry of this Consent Decree, provide a copy of the .

COmmission’s Order, as modified in the manner provided in Part IV, and a copy of this Consent

Decree to each of its officers, and to all personnel, whether such persons are designated as

employees, consulters, independent eontraotors, vendor representatives, or otherwise, involved

~n the advertising or promotion of any product covered by the Commission’s Order, as modified

in the manner provided in Part IV. Defendant Q¥C shall provide a copy of the Commission’s

Order, as modified in the manner provided in Part IV, and this Consent Decree to future

personnel within thirty (30) days after the person assumes such position or responsibilities.

Within ten (10) d~ys of complying with this paragraph, each defendant shall provide.the

ASsociate Director for Enforcement, Bureau of Consumer Protection, Federal Trade

Commission, Washington, DC 20580, an affidavit setting forth ~he fact and manner of its

7
compliance, including the name and title of each person to whom a copy of the Commission’s

Order, as modified in the manner provided in Part IV, and a copy of the Consent Decree has been

provided.

VI.

RECORD-KEEPING PROVISIONS

IT IS FURTHER ORDERED that, for a period of five (5) years from the date of entry

of this Consent Decree, defendant QVC, and its successors and assigns, shall maintain and, upon

request, make available to the Commission, copies of all business records demonstrating

compliance with the terms and provisions of this Consent Decree.

VII.

CONTINUING JURISDICTION

IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for

purposes of construction, modification, and enforcement of this Consent Decree.

JUDGMENT IS THEREFORE ENTERED in favor of plaintiff and against defendant,

pursuant to all the terms and conditions recited above.

Dated this date of ,2009

John P. Fullam

United States District Judge

13130273,DOC

8
The parties, by their respective counsel, hereby consent to th~ terms and conditions of the

Consent Decree as set forth abow and consent to the entry thereof. Defendant waives any rights

that may arise under the Equal Access to Justice Act, 28 U.S.C. § 2412, amended bY Pub. L, I04-

121, 1 I0 Star. 847, 863-63 (1996),

FOR THE UNITED STATES OF AMEP, JCA:

JEFFREY S. BUCHOLTZ

Acting Assistant At*omey 3enera!

Civil Division

United States Department of Justice

PATRICK MEEHAN

United Stat~s Attorney

Eastern District of Pennsylvania

JOSEPH TRAUTWEIN

Assistant United States Attorney

615 Chestnut Stremt

Suite 1250

Philadelphia, PA 19106

EUGENE M. THIKOLF

Director

KE2krN~. TI JOST

Deputy DirectOr

Of:flee of Consumer Litigation

MARK L. JOSEPHS

Trial Attorney

Office of Consumer Litigation

Civil Division

U.S. Departmem of Justice

:Washington,. D~C. 20530

(202)305-3630

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FOR. THE FEDERAL TRADE COMMISSION:

JAMES A. KOHM

Associate Director forEnforcement

ROBERT KAYE

Assis’mnt Director for Entbroemenl

.MARK MORELLI

Atlomey

Division of Enf~roement

Bureau of Consumer Protection

600 Pennsylvania Avenue, N.W.

Federal Trade Commission

Washington, D.C. 20580

(202) 326-2601

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FOR THE DEFENDANT:

QVC, INC.

By:

LAWRE~, ’

Oeneral o~sel

By:

ALAN K, PALMER

Kaye Seholer, LLP

901 Fifteenth Sti~et, N.W,

Washington, D.C. 20005

(202) 682-3536

Attorneys for Defendant QVC, Inc.
CERTIFICATE OF SERVICE

I hereby certify that on this 20th day of February, 2009, a true copy of the Consent Decree

was served by electronic filing on the following parties:

David M. Howard, Esq.

Cira Centre

2929 Arch Street

Philadelphia, PA 19104-2808

Alan Palmer, Esq.

Kaye Scholer LLP

901 1.5th Street, N.W., Suite 1100

Washington, DC 20005

Attorneys for Defendant/Third-Party Plaintiff QVC, Inc.

Matthew J. Siembieda, Esq.

Matthew Lee, Esq.

BlaNc Rome LLP

One Logan Square

Philadelphia, PA 19103-6988

Attorneys for Third-Party Defendant Nutrition 21, Inc.

Edward Gross, Esq.

Riker Danzig Scherer Hyland& Perretti, LLP

New Jersey Office at Headquarters Plaza

One Speedwell Avenue

Morristown, NJ 07692-1981

Attorneys for Third-Party Vitaquest International, Inc.

Christopher R. Mellott, Esq.

Randolph Stuart Sergent, Esq.

Venable LLP

Two Hopkins Plaza

Suite 1800

Baltimore, MD 21201-2978

Attorneys for Third-Party Defendants Bee-Alive, Inc. and

Madeline Balletta
Matthew J. Borger, Esq.

Klehr, Harrison, Harvey, Branzburg & Ellers LLP

260 South Broad Street

Suite 400

Philadelphia, PA 19102

Attorneys for Fourth-Party Defendant Marvin Segal

/s MARK L. JOSEPHS

Mark L. Josephs