PUBLIC

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Lina M. Khan, Chair 

Noah Joshua Phillips 

Rohit Chopra

Rebecca Kelly Slaughter

Christine S. Wilson

________________________________________________ 

In the Matter of

HEALTH RESEARCH LABORATORIES, LLC, DOCKET NO. 9397 

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.

________________________________________________ 

COMPLAINT COUNSEL’S REPLIES TO 

RESPONDENTS’ FINDINGS OF FACT AND CONCLUSIONS OF LAW

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I. Introduction

Once again, Respondents have chosen not to contest the facts proffered by Complaint 

Counsel or otherwise develop the factual record. The Commission ordered both parties to 

submit proposed findings of fact, conclusions of law, a brief addressing liability, defenses, and 

relief, as well as a proposed order. Order Directing Parties to Submit Proposed Findings of Fact 

and Conclusions of Law and Providing for Summary Decision Proceeding, at 4 (July 30, 2021) 

(“July 30 Order”). However, Respondents largely disregarded the Order and instead submitted 

proposed findings of fact and conclusions of law which merely reiterate their legal defenses and

narrow interpretation of Commission Rule 3.12(b)(2). 

Specifically, Respondents contend: (1) the Commission’s authority to enter a cease and 

desist order is limited to prohibiting alleged unlawful conduct; (2) the Commission’s structure 

violates Article II and Constitutional separation of powers; (3) the Commission’s multi-faceted 

roles violate Respondents’ right to due process under the Fifth Amendment of the U.S. 

Constitution; and (4) Rule 3.12(b)(2) forecloses the Commission from considering facts outside 

of the pleadings. The Commission considered and rejected the last two arguments. July 30

Order, at 3-4. For the reasons set forth in Complaint Counsel’s previous submissions1

 and 

briefly below, each of Respondents’ arguments is meritless. 

II. Replies to Respondents’ Proposed Findings of Facts

Complaint Counsel’s replies to Respondents’ Findings of Fact and Conclusions of Law 

are set forth below and organized to follow the proposed findings and conclusions. 

 

1 See Complaint Counsel’s Brief in Advance of Final Decision, at 20-21 (Aug. 20, 2021); Reply to Respondents’ 

Response to Complaint Counsel’s Statement of Additional Material Facts (June 21, 2021). 

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Proposed Finding No. 1. In the Complaint, Complaint Counsel alleges that Respondents 

have “disseminated or [have] caused to be disseminated advertising and promotional materials” 

for four supplements. 

Reply: Respondents’ proposed finding is incomplete and imprecise. The Complaint alleges

Health Research Laboratories, LLC (“HRL”) disseminated or caused to be disseminated 

advertising and promotional materials for Black Garlic Botanicals, The Ultimate Heart Formula, 

and Neupathic in the form of multi-page mailers sent to consumer residences and on company 

websites. Complaint ¶¶ 7, 11, 13. Whole Body Supplements, LLC (“WBS”) disseminated or 

caused to be disseminated advertising and promotional materials for BG18 in the form of multipage mailers sent to consumer residences and on company websites. Id. ¶9. The Complaint also

alleges Respondents “advertised, labeled, offered for sale, sold, and distributed, or caused to be 

distributed a number of dietary supplement products to consumers” including Black Garlic 

Botanicals, BG18, The Ultimate Heart Formula, and Neupathic. Id. ¶4. Respondents have 

admitted all of these material facts. Amended Answer (Mar. 30, 2021). 

Proposed Finding No. 2. In the Complaint, the Commission contends the statements in the 

advertisements and promotional materials for four supplements were “not substantiated at the 

time the representations were made.” 

Reply: Respondents’ proposed finding is inaccurate and imprecise. The Complaint alleges 

Respondents’ mailers for Black Garlic Botanicals, BG18, The Ultimate Heart Formula, and 

Neupathic contained a number of representations about the products’ efficacy in preventing, 

reducing the risk of, curing, treating, or mitigating cardiovascular disease, atherosclerosis, 

hypertension, or diabetic neuropathy that “were not substantiated at the time the representations

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were made.” Complaint ¶¶14-21. Respondents have admitted these material facts. Amended 

Answer (Mar. 30, 2021). 

Proposed Finding No. 3. Pursuant to 16 C.F.R. § 3.12(b), Respondents elected to admit the 

material facts in the Complaint.

Reply: Complaint Counsel agrees Respondents elected to admit all material facts in the 

Complaint pursuant to 16 C.F.R. § 3.12(b)(2). 

Proposed Finding No. 4. In a written stipulation filed with the Commission, Respondents 

further agreed to a prohibition on disseminating or causing to be disseminated any advertising or 

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

disease. 

Reply: Respondents do not clearly identify the stipulation referred to in this proposed 

finding.2 However, Complaint Counsel agrees that in Respondents’ June 1, 2021 submission to 

the Commission, they stated they “do not oppose 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’ Response to Complaint 

Counsel’s Statement of Additional Material Facts, at 7 (June 1, 2021) (original emphasis). 

 

2 Respondents filed a Stipulation with the Office of the Administrative Law Judges stipulating “the Initial Decision 

of the ALJ can include whatever ‘fencing in’ relief is permitted by statute and requested in the Complaint.” 

Respondents’ Stipulation as to “Fencing-In” Relief, at 1-2 (Apr. 13, 2021). In a later submission to the 

Commission, Respondents stated they did not oppose a cease and desist order prohibiting them from disseminating

advertising for the four supplements at issue or containing “fencing in relief directly related to the alleged deceptive 

acts or practices.” Respondents’ Response to Complaint Counsel’s Statement of Additional Material Facts, at 7

(June 1, 2021). 

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III. Replies to Respondents’ Proposed Conclusions of Law 

Proposed Conclusion No. 1. In an administrative proceeding under Section 5(b) of the FTC 

Act, the Commission is authorized to enter an order against Respondents “to cease and desist 

from using such method of competition or such act or practice” referenced in the Complaint. 15 

U.S.C. § 45(b). 

Reply: Complaint Counsel agrees Respondents’ selective quotation from 15 U.S.C. § 45(b) 

is accurate. However, Respondents’ contention that the Commission’s statutory authority is 

limited to ordering them to cease and desist from unlawful conduct specifically alleged in the 

Complaint is inconsistent with the text of 15 U.S.C. § 45(b), relevant legislative history, and 

well-established case law recognizing the Commission’s authority to include affirmative relief 

and fencing-in relief in administrative orders. See Complaint Counsel’s Brief in Advance of 

Final Decision, at 7-9; 13-18 (Aug. 20, 2021); Reply to Respondents’ Response to Complaint 

Counsel’s Statement of Additional Facts, at 6-8 (June 21, 2021). 

Proposed Conclusions Nos. 2-6 

Proposed Conclusion No. 2. Under 16 C.F.R. § 3.12(b)(2), the Complaint and the Amended 

Answer in this case 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.” 

16 C.F.R. § 3.12(b)(2). 

Proposed Conclusion No. 3. Respondents’ Amended Answer had the effect of dispensing 

with a hearing in this case and removing the proceedings to the Commission for determination of 

a final order. 16 C.F.R. § 3.12(b)(2). 

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Proposed Conclusion No. 4. 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). 

Proposed Conclusion No. 5. 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). 

Proposed Conclusion No. 6. In explaining the 2009 amendments to Rule 3.12(b)(2), the 

Commission also stated that 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. 

Reply to Nos. 2-6: The Commission has already determined it can consider evidence outside 

of the pleadings relevant to disputed issues following Respondents’ Rule 3.12(b)(2) admissions. 

July 30 Order, at 3 (“Where, as here, issues regarding the choice of remedy remain in the case 

despite the admissions in the answer, it is appropriate to look to established evidence outside the 

pleadings to resolve the dispute.”). The Commission’s conclusion is consistent with the Rule’s 

text, which states the pleadings “provide a record basis” for the Commission’s decision rather 

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than the exclusive basis for that decision. 16 C.F.R. § 3.12(b)(2) (emphasis added). In addition, 

the Rule specifies the answer operates as “a waiver of hearings as to the facts alleged in the 

complaint” rather than all hearings and allows parties to submit proposed findings of fact which 

would be unnecessary if fact-finding was strictly limited to pleading content. Id.3 

Respondents cite previous Federal Register statements related to the amendment of Rule 

3.12(b)(2), but those also do not preclude the Commission from considering facts outside the 

Complaint. July 30 Order, at 3. The commentary statements were “not meant to limit the 

Commission’s authority or to address every circumstance that may arise.” Id. 

Proposed Conclusion No. 7. The structure of the Commission, under which the 

Commissioners can be removed by the President only for inefficiency, neglect, or malfeasance, 

violates Article II of the Constitution and the Constitution’s separation of powers. See Seila Law 

LLC v. Consumer Financial Protection Bureau, 140 S. Ct. 2183, 2193 (2020) (“The President’s 

power to remove – and thus supervise – those who wield power on his behalf follows from the 

text of Article II, was settled by the First Congress, and was confirmed in the landmark decision 

Myers v. United States, 272 U.S. 52 (1926).”). 

Reply: The Supreme Court specifically rejected this constitutional argument in Humphrey’s 

Executor v. United States, 295 U.S. 602 (1935) and upheld the removal provisions applicable to 

Commissioners. Further, subsequent decisions have reinforced the fact that Humphrey’s 

Executor remains good law. See Complaint Counsel’s Brief in Advance of Final Decision, at 20-

21.4 

 

3 See July 30 Order, at 3. 

4 The Supreme Court’s decision in Myers v. United States, 272 U.S. 52 (1926) established that Congress may not 

condition the removal of a federal officer on Senate “advice and consent,” but did not address the question of 

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Proposed Conclusion No. 8. The FTC’s combined role of prosecutor, trial judge, jury, and 

appellate court in these administrative proceedings violates Respondents’ rights under the Due 

Process Clause of the Fifth Amendment to the United States Constitution. Minimal due process 

requires “notice of the factual basis” of the Government’s assertions “and a fair opportunity to 

rebut the Government’s factual assertions before a neutral decisionmaker.” Hamdi v. Rumsfeld, 

542 U.S. 507, 533 (2004). Any use of the findings of fact – which are decided without adequate 

due process before a neutral decisionmaker – to deprive Respondents of property in a later action 

under 15 U.S.C. § 57b violates the Due Process Clause of the Fifth Amendment. See 15 U.S.C. 

§ 57b(c). 

Reply: As the Commission has previously recognized, Respondents’ argument that the 

Commission’s combined investigative and adjudicative roles violate their due process rights is 

contrary to well-established Supreme Court precedent in Withrow v. Larkin, 421 U.S. 35 (1975). 

July 30 Order, at 3-4; see also Complaint Counsel’s Brief in Advance of Final Decision, at 20 

(Aug. 20, 2021). 

Moreover, Respondents have had ample notice of the factual allegations in this 

proceeding and decided not to dispute them when given multiple opportunities to do so. 

Respondents had an opportunity to contest the Complaint, but filed their Amended Answer 

instead. The Commission afforded Respondents the opportunity to challenge Complaint 

Counsel’s Statement of Additional Material Facts, but they elected not to confirm or deny the 

truth of any of these facts—or propose any additional facts for the Commission to consider. 

Order For Further Proceedings Before the Commission, at 3 (May 14, 2021); see also ECM

BioFilms, Inc. v. FTC, 851 F.3d 599, 618 (6th Cir. 2017) (finding “elaboration over the course of 

 

whether Congress can limit the President’s own removal power to some level of “good cause” which was later 

considered in Humphrey’s Executor. 

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the proceedings sufficient to provide notice”); L.G. Balfour Co. v. FTC, 442 F.2d 1, 18-19 (7th 

Cir. 1971) (holding that respondent had adequate notice because, “[a]s the Commission case 

against petitioners unfolded, there was a reasonable opportunity to know the claims of the 

opposing party and to meet them”) (internal quotations omitted). The fact Respondents chose 

not to develop the factual record in this matter obviously does not mean they did not have notice 

of the factual allegations and an opportunity to respond. It means Respondents made a strategic 

decision not to fully participate in the process provided. 

Finally, Respondents’ constitutional challenge to provisions in 15 U.S.C. § 57b(c) 

making the Commission’s findings of fact conclusive in a hypothetical future enforcement action 

brought under 15 U.S.C. § 57b is premature. July 30 Order, at 4 n.2 (“We need not address the 

constitutionality of provisions about possible future review or enforcement actions because it is 

not raised by the issues presently before us.”). 

Dated: September 10, 2021 Respectfully submitted, 

s/ Elizabeth J. Averill 

 Elizabeth J. Averill

 Jonathan Cohen 

 Federal Trade Commission

 600 Pennsylvania Ave, NW, CC-9528 

 Washington, DC 20580 

 (202) 326-2993 (Averill); -2551 (Cohen) 

 Eaverill@ftc.gov; Jcohen2@ftc.gov 

 (202) 326-3197 (facsimile) 

 Complaint Counsel 

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CERTIFICATE OF SERVICE

I certify that I served a copy of Complaint Counsel’s Replies to Respondents’ Findings of 

Fact and Conclusions of Law today via electronic mail. 

Joel Reese

Joshua Russ 

Reese Marketos LLP

750 N. Saint Paul St., Suite 600 

Dallas, TX 75201 

Joel.reese@rm-firm.com

Josh.russ@rm-firm.com

I also served one electronic copy via the Administrative E-Filing System and one electronic 

courtesy copy to the Office of the Secretary via email to ElectronicFilings@ftc.gov. 

I served one electronic courtesy copy via email to the Office of the Administrative Law Judge: 

The Honorable D. Michael Chappell 

Administrative Law Judge 

600 Pennsylvania Ave, N.W., Room H-110 

Washington, DC 20580 

 s/ Elizabeth J. Averill 

Elizabeth J. Averill 

Federal Trade Commission

 600 Pennsylvania Ave, NW, CC-9528 

 Washington, DC 20580 

 (202) 326-2993; eaverill@ftc.gov

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