FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 4/21/2021 | OSCAR NO. 601242 | PUBLIC

__________________________________________ 

PUBLIC 

UNITED STATES OF AMERICA 

FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

) 

In the Matter of 

Health Research Laboratories, LLC, 

 a limited liability company, 

Whole Body Supplements, LLC, 

 a limited liability company, and 

Kramer Duhon, 

 individually and as an officer of 

 Health Research Laboratories, LLC, 

 and Whole Body Supplements, LLC, 

Respondents. 

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) Docket No. 9397 

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__________________________________________) 

ORDER GRANTING IN PART AND DENYING IN PART 

RESPONDENTS’ MOTION TO ENTER NEW SCHEDULING ORDER OR, IN THE 

ALTERNATIVE, TO TRANSFER CASE TO THE COMMISSION 

I. 

On March 31, 2021, Respondents Health Research Laboratories, LLC (“HRL”), 

Whole Body Supplements, LLC (“WBS”), and Kramer Duhon (collectively, “Respondents”) 

filed a Motion to Enter New Scheduling Order or, in the Alternative, Transfer Case to the 

Commission (“Motion”). Federal Trade Commission (“FTC” or “Commission”) Complaint 

Counsel filed an opposition on April 9, 2021 (“Opposition”). For the reasons set forth below, 

Respondents’ request to transfer this matter to the Commission is GRANTED, and their 

request to enter an order for a schedule and other provisions for proposed findings of fact, 

conclusions of law and legal briefing before the Commission is DENIED. 

II. 

On March 30, 2021, Respondents filed an Amended Answer pursuant to FTC Rule 

3.12(b)(2).1 Rule 3.12(b)(2) states: 

If the respondent elects not to contest the allegations of fact set forth in the 

complaint, the answer shall consist of a statement that the respondent admits 

1 Respondents’ motion under Rule 3.15(a) for leave to amend their Answer was granted on March 10, 2021. 
 

 

 

 

 

FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 4/21/2021 | OSCAR NO. 601242 | PUBLIC

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all of the material allegations to be true. Such an answer shall constitute a 

waiver of hearings as to the facts alleged in the complaint, and together with 

the complaint will provide a record basis on which the Commission shall issue 

a final decision containing appropriate findings and conclusions and a final 

order disposing of the proceeding. In such an answer, the respondent may, 

however, reserve the right to submit proposed findings of fact and conclusions 

of law under § 3.46. 

16 C.F.R. § 3.12(b)(2). 

Respondents’ Amended Answer states: 

Pursuant to 16 CFR § 3.12(b)(2), Respondents elect not to contest the 

allegations of fact set forth in the complaint. Respondents admit all of the 

material allegations to be true. Pursuant to 16 CFR § 3.12(b)(2), Respondents 

reserve the right to submit proposed findings of fact and conclusions of law. 

Respondents’ Amended Answer also includes one legal defense, which challenges the 

constitutionality of the FTC’s administrative process.2

Respondents contend that, having admitted the allegations of the Complaint, pursuant 

to Rule 3.12(b)(2), the Complaint and the Amended Answer form the record for this case, no 

further discovery or expert reports are necessary, and the case is now ripe for decision. 

Respondents ask the Administrative Law Judge (“ALJ”) to issue an amended Scheduling 

Order that eliminates all pending discovery and other pre-trial deadlines in the existing 

Scheduling Order and replaces them with a schedule and other conditions for submitting 

proposed findings of fact, proposed conclusions of law, and legal briefing. Respondents 

request in the alternative that the ALJ immediately transfer this case to the Commission for a 

final decision and order disposing of the matter, in accordance with Rule 3.12(b)(2). 

Complaint Counsel asserts that Respondents’ Amended Answer only narrows the 

disputed factual and legal issues in this case, that the issue of appropriate relief remains 

outstanding, and that an initial decision must be prepared. Complaint Counsel further argues 

that it is permitted to seek discovery relevant to scope of relief; specifically, “fencing-in” 

2 Respondents’ legal defense states: 

The FTC’s administrative process violates the Fifth Amendment to the United States 

Constitution because it seeks to deny Respondents of property and rights without due process 

of law. Further, the FTC receives its authority through Article II of the United States 

Constitution. The FTC’s structure violates and is inconsistent with Article II of the United 

States Constitution because the Commissioners and the Administrative Law Judges (“ALJs”) 

can only be removed by the President for “inefficiency, neglect of duty, or malfeasance in 

office,” which means that the Commissioners and the ALJs are not subject to the supervision 

and authority of the President. 

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FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 4/21/2021 | OSCAR NO. 601242 | PUBLIC

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relief,3 and notes that, on April 6, 2021, the ALJ ordered the Respondents to produce 

responsive documents, a privilege log, and supplemental interrogatory answers. See Order 

Granting Complaint Counsel’s Motions to Compel (Apr. 6, 2021). Complaint Counsel further 

notes that it has filed a motion with the Commission requesting that the Commission postpone 

the evidentiary hearing in this matter in order to allow Complaint Counsel additional time to 

conduct discovery. 

Complaint Counsel argues that, under the circumstances, it is inappropriate to 

eliminate all discovery and prehearing deadlines and replace them with deadlines for 

proposed findings of fact and conclusions of law, as requested by Respondents. Complaint 

Counsel further argues that Respondents’ alternative request to immediately transfer the case 

to the Commission for final decision is contrary to the Rules of Practice and relevant 

precedent. 

On April 13, 2021, after the Motion and Opposition herein were submitted, 

Respondents submitted a Stipulation as to Fencing-in Relief, which stated: “Respondents 

hereby stipulate and agree that the Initial Decision of the ALJ can include whatever ‘fencing 

in’ relief is permitted by statute and requested in the Complaint” (“Stipulation”).

4 

Respondents reiterated their position in a recent filing regarding the Order Granting 

Complaint Counsel’s Motions to Compel, issued April 6, 2021, stating: “Respondents have no 

objection to a blanket prohibition on disseminating or causing to be disseminated any 

advertising or promotional materials for any supplements that makes any representations 

regarding health or disease.” Respondents’ Motion to Partially Reconsider [April 6, 2021] 

Order Granting Complaint Counsel’s Motions to Compel at 7 (emphasis in original). 

Respondents have made the same statement directly to the Commission. See Respondents’ 

Motion to Extend Time to Respond to Complaint Counsel’s Motion to Reschedule 

Evidentiary Hearing Date, filed April 16, 2021, Exhibit A at 6 (“Respondents have agreed to a 

blanket prohibition on disseminating or causing to be disseminated any advertising or 

promotional materials for any supplements that makes any representations regarding health or 

disease” and that Respondents have decided to “give the FTC whatever permissible ‘fencing 

in’ relief has been requested in the Complaint”). 

3 “‘Fencing-in’ relief refers to provisions in a final Commission order that are broader in scope than the conduct 

that is declared unlawful.” In re Telebrands Corp., 2005 FTC LEXIS 178, at **4 n.3 (Sept. 19, 2005) (citing 

FTC v. Colgate-Palmolive Co., 380 U.S. 374, 395 (1965); Kraft, Inc. v. FTC, 970 F.2d 311, 326 (7th Cir. 1992)). 

“A common form of ‘fencing-in’ relief is a ‘multiproduct’ prohibition that bars the respondent from using its 

deceptive trade practice to sell not only the product that was the subject of the enforcement action, but all 

products sold by the respondent. Such multi-product orders are justified where the respondent’s deceptive 

practice was serious or deliberate, easily transferrable to the sale of other products, and/or where there is a 

history of prior violations.” In re ECM BioFilms, Inc., 2015 FTC LEXIS 22, at *629-30 (Jan. 28, 2015) 

(collecting cases). 

4 While Respondents’ Stipulation refers to relief that may be included in the “Initial Decision of the ALJ,” as 

discussed further infra, Rule 3.12(b)(2) contemplates expedited proceedings involving only a final decision and 

final order. The wording of the Rule does not contemplate an evidentiary hearing or fact-finding by an ALJ and 

does not contemplate or provide for an initial decision. 

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FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 4/21/2021 | OSCAR NO. 601242 | PUBLIC

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III. 

Complaint Counsel’s argument that Rule 3.12(b)(2) contemplates an evidentiary 

hearing and an initial decision by an ALJ is unsupported. Complaint Counsel cites cases in 

which, after submission of an answer under Rule 3.12(b)(2), an initial decision was issued by 

the ALJ, followed by a final decision and order from the Commission.5 However, Complaint 

Counsel overlooks the fact that these cases were decided under a previous version of Rule 

3.12(b)(2) that is no longer applicable. In 2009, the Commission changed its Rules of Practice 

to “eliminate the ALJ’s authority to render an initial decision when the allegations of the 

complaint are admitted or there is a default. In those cases, the Commission would issue a 

final decision on the basis of the facts alleged in the complaint.” 74 Fed. Reg. 1804, 1808 

(Jan. 13, 2009) (Interim final rules with request for comment). In addition, it should be noted 

that the exclusive use of the word “final” in the Rule, as in “final decision” and “final order,” 

is contrary to a conclusion that an initial decision is necessary or even possible under the 

Rule. The clear wording and plain meaning of the Rule is that “the Commission shall issue a 

final decision.” 16 C.F.R. § 3.12(b)(2). 

Moreover, as noted above, Rule 3.12(b)(2) states that the answer “shall constitute a 

waiver of hearings as to the facts alleged in the complaint, and together with the complaint 

will provide a record basis” for the Commission’s final decision and order. Although the 

language of the Rule does not expressly preclude consideration of evidentiary materials, the 

history of the Rule indicates an intent to limit the record to the pleadings. In explaining the 

2009 amendments to Rule 3.12(b)(2), the Commission stated that “the Commission would 

issue a final decision on the basis of the facts alleged in the complaint.” 74 Fed. Reg. at 1808. 

The Commission further noted that where the allegations are admitted pursuant to Rule 

3.12(b), there would be no evidence to hear or “voluminous record” to review, and therefore, 

it would be more “efficient for the Commission to issue a final opinion and order without the 

intermediate step of an ALJ’s initial decision.” 73 Fed. Reg. 58832, 58836 (Oct. 7, 2008) 

(Proposed Rules). According to the Commission, these “cases can be resolved more 

expeditiously without the intermediate step of an ALJ’s initial decision; the only issues in 

such cases are legal or policy ones . . . .” 74 Fed. Reg. at 1808-09.6 

Furthermore, Complaint Counsel’s assertion that the Amended Answer merely 

narrowed the issues in the case trivializes the significance of an answer under Rule 3.12(b)(2), 

which is a binding, judicial election not to contest any factual allegations of the Complaint 

and to admit all material allegations as true. In addition, to the extent that the scope of relief 

previously presented any factual dispute and justified an order compelling then-outstanding 

5 See In re Sir Carpet, Inc., 85 F.T.C. 190, 1975 WL 172194 (Feb. 6, 1975); In re Auslander Decorator 

Furniture, Inc., 83 F.T.C. 1542, 1974 WL 175916 (Apr. 23, 1974); In re New Home Sewing Center, 76 F.T.C. 

191, 1969 WL 101146 (Aug. 5, 1969); In re Market Fur Dressing Corp., 76 F.T.C. 101, 1969 WL 101378 (July 

24, 1969). 

6 In permitting Respondents’ Rule 3.12(b)(2) answer to include affirmative defenses, the ALJ reasoned in part 

that allowing an affirmative defense is not inconsistent with the Rule because, by definition, an affirmative 

defense admits underlying facts and presents only a question of law. See Order Granting Respondents’ Motion to 

Amend Answer (March 10, 2021) at 4. 

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FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 4/21/2021 | OSCAR NO. 601242 | PUBLIC

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discovery to support such relief,7 the only relief that Complaint Counsel has identified as 

requiring factual support is fencing-in relief and Respondents have since effectively agreed to 

this. It is also noteworthy that fencing-in relief is clearly contemplated in the Notice of 

Contemplated Relief submitted with the Complaint.8 

IV. 

Based upon Respondents’ Amended Answer, Respondents’ Stipulation, and 

Respondents’ further judicial affirmations that they do not object to fencing-in relief, this case 

is ripe for a final decision and order by the Commission under Rule 3.12(b)(2). The present 

record fails to demonstrate the existence of any factual issue requiring a determination. 

Therefore, discovery is moot. To retain the case under these circumstances would only cause 

delay and will frustrate the purpose of the Rule to expedite proceedings where, as here, the 

allegations of the Complaint are admitted. 

For all the reasons set forth herein, Respondents’ request to transfer this matter to the 

Commission for a final decision and order under Rule 3.12(b)(2) is GRANTED. The schedule 

and conditions for submission of proposed findings of fact and conclusions of law to the 

Commission, as permitted under Rule 3.12(b)(2), are matters for the Commission’s discretion. 

Accordingly, Respondents’ request for an order in that regard is DENIED. 

Rulings on motions currently pending before the ALJ are hereby held in abeyance and 

any and all pending discovery in this case is STAYED pending further proceedings before the 

Commission.

9 

ORDERED: 

D. Michael Chappell 

Chief Administrative Law Judge 

Date: April 20, 2021 

7 Respondents did not submit any opposition to Complaint Counsel’s motions to compel, which was also 

material to the decision to issue an order compelling discovery. 

8 The Notice of Contemplated Relief included with the Complaint sets forth, among other anticipated remedial 

provisions, prohibitions against Respondents’ making any representation that their products “cure, treat, 

mitigate, prevent, or reduce the risk of any disease”; any “representations about the health benefits, safety, 

efficacy, or the performance of Respondents’ products unless those representations are supported by competent 

and reliable scientific evidence”; or any “misrepresentations regarding tests, studies, or other research.” 

Complaint, Notice of Contemplated Relief at 14-15. 

9 The motions pending before the ALJ are Respondents’ Second Motion to Quash Subpoena to Former Legal 

Counsel, filed April 9, 2021, and Respondents’ Motion to Partially Reconsider [April 6, 2021] Order Granting 

Complaint Counsel’s Motions to Compel, filed April 13, 2021. 

5