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UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

FEDERAL TRADE COMMISSION, 

Plaintiff, Docket No. 

v. 

SKECHERS U.S.A., INC., d/b/a SKECHERS, Judge 

Defendant. 

STIPULATED FINAL JUDGMENT AND ORDER 

FOR PERMANENT INJUNCTION AND OTHER EQUITABLE RELIEF 

Plaintiff, the Federal Trade Commission (Commission or FTC), filed a Complaint for 

Permanent Injunction and Other Equitable Relief against Skechers U.S.A., Inc., pursuant to 

Section \3(b) of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 53(b), alleging 

deceptive acts or practices and false advertisements in violation of Sections 5(a) and 12 of the 

FTC Act, 15 U.S.C. §§ 45(a) and 52. 

The Commission and Defendant have stipulated to the entry of this Stipulated Final 

Judgment and Order for Permanent Injunction and Other Equitable Relief (Order) in settlement 

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of the Commission's allegations against Defendant. The Court, having been presented with this 

Order, finds as follows: 

FINDINGS 

I. This Court has jurisdiction over the subject matter of this case and over all parties. 

Venue in the United States District Court for the Northern District of Ohio is proper. 

2. The Complaint states a claim upon which relief can be granted, and the 

Commission has the authority to seek the relief it has requested. 

3. The activities of the Defendant, for purposes of this Order, are in or affecting 

"commerce," as defined in Section 4 of the FTC Act, 15 U.S.C. § 44. 

4. This Order is for settlement purposes only, and does not constitute and shall not 

be interpreted to constitute an admission by Defendant or a finding that the law has been violated 

as alleged in the Complaint, or that the facts alleged in the Complaint, other than jurisdictional 

facts, are true. 

5. Defendant waives all rights to seek judicial review or otherwise challenge or 

contest the validity of this Order. Defendant also waives any claim that it may have held under 

the Equal Access to Justice Act, 28 U.S.c. § 2412, concerning the prosecution of this action to 

the date of this Order. 

6. This action and the relief awarded herein are in addition to, and not in lieu of, 

other remedies as may be provided by law. 

7. This Order reflects the negotiated agreement of the parties. 

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8. The parties shall jointly be deemed the drafters of this Order; the rule that any 

ambiguity in a contract shall be construed against the drafter of the contract shall not apply to this 

Order. 

9. Nothing in this Order obviates the obligation of Defendant to comply with 

Sections 5 and 12 of the FTC Act, 15 U.S.c. §§ 45 and 52. 

10. The Commission's action against Defendant is an exercise of the Commission's 

police or regulatory power as a governmental unit. 

11 . The paragraphs of this Order shall be read as the necessary requirements of 

compliance and not as alternatives for compliance, and no paragraph serves to modify another 

paragraph unless expressly so stated. 

12. Each party shall bear its own costs and attorneys' fees. 

13. Entry of this Order is in the public interest. 

Unless otherwise specified, 

ORDER 

DEFINITIONS 

I. "Defendanf' means Skechers U.S.A., Inc., doing business as Skechers, and its 

successors and assigns. 

2. "Skechers Toning Footwear" means, collectively, Shape-ups, Resistance 

Runner, Shape-ups Toners, and Tone-ups. 

3. "Commerce" is as defined in Section 4 of the FTC Act, 15 U.S.c. § 44. 

4. "Adequate and well-controlled human clinical study" means a clinical study 

that is randomized, controlled (including but not limited to controlled for dietary intake iftesting 

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for weight loss or a reduction in body fat), blinded to the maximum extent practicable, uses an 

appropriate measurement tool or tools, and is conducted by persons qualified by training and 

experience to conduct and measure compliance with such a study. 

5. "Covered Producf' means Skechers Toning Footwear, and any other footwear 

that purports to improve or increase muscle tone, muscle strength, muscle activation, overall 

circulation, or aerobic conditioning, and/or that purports to result in increased calorie bum, 

weight loss, loss of body fat or improvement or reduction in body composition. 

6. "Class Action Notice" means notice to consumers of a class action settlement. 

7. "Class Action Settlement Administrator" means a third-party agent or 

administrator appointed by a court in a class action to implement the claims and settlement 

process of a class action settlement. 

8. "Consumer Claim Form" means a form that consumers who purchased any 

Covered Product use to seek payment in a class action settlement. 

9. "Notice Administrator" means a third-party agent or administrator appointed by 

a court in a class action to implement the Class Action Notice and related requirements of a class 

action settlement. 

10. "Notice Plan" means the plan for providing Class Action Notice. 

II. "Settlement Claim Procedures and Claim Calculation Protocol" means an 

agreement in a class action settlement, used by a Class Action Settlement Administrator (1) to 

review, address, implement, and process claims for payment submitted pursuant to a class action 

settlement, and (2) to otherwise implement the terms of the claims process in a class action 

settlement. 

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12. "Endorsemenf' is as defined in 16 C.F.R. § 255.0(b). 

13. The term "including" in this Order means "including without limitation." 

14. The terms "and" and "or" in this Order shall be construed conjunctively or 

disjunctively as necessary, to make the applicable phrase or sentence inclusive rather than 

exclusive. 

I. 

PROHIBITED REPRESENTATIONS: 

STRENGTHENING CLAIMS 

IT IS ORDERED that Defendant, directly or through any corporation, partnership, 

subsidiary, division, trade name, or other device, and its officers, agents, servants, 

representatives, employees, and all 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 

Covered Product in or affecting commerce, is hereby permanently restrained and enjoined from 

making, or assisting others in making, directly or by implication, including through the use of a 

product name, endorsement, depiction, or illustration, any representation that such product is 

effective in strengthening muscles unless the representation is non-misleading and, at the time of 

making such representation, Defendant possesses and relies upon competent and reliable 

scientific evidence that substantiates that the representation is true. For purposes of this Section, 

competent and reliable scientific evidence shall consist of at least one adequate and wellcontrolled human clinical study of the Covered Product that conforms to acceptable designs and 

protocols, is of at least six-weeks duration, and the result of which, when considered in light of 

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the entire body of relevant and reliable scientific evidence, is sufficient to substantiate that the 

representation is true. 

II. 

PROHIBITED REPRESENTATIONS: WEIGHT LOSS CLAIMS 

IT IS FURTHER ORDERED that Defendant, directly or through any corporation, 

partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants, 

representatives, employees, and all 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 

Covered Product, in or affecting commerce, is hereby permanently restrained and enjoined from 

making, or assisting others in making, directly or by implication, including through the use of a 

product name, endorsement, depiction, or illustration, any representation that such product causes 

weight loss unless the representation is non-misleading and, at the time of making such 

representation, Defendant possesses and relies upon competent and reliable scientific evidence 

that substantiates that the representation is true. For purposes of this Section, competent and 

reliable scientific evidence shall consist of at least two adequate and well-controlled human 

clinical studies of the Covered Product, conducted by different researchers, independently of 

each other, that conform to acceptable designs and protocols and whose results, when considered 

in light of the entire body of relevant and reliable scientific evidence, are sufficient to 

substantiate that the representation is true. 

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Ill. 

PROHIBITED REPRESENTATIONS: 

OTHER HEALTH OR FITNESS-RELATED CLAIMS 

IT IS FURTHER ORDERED that Defendant, directly or through any corporation, 

partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants, 

representatives, employees, and all 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 

Covered Product in or affecting commerce, is hereby permanently restrained and enjoined from 

making, or assisting others in making, directly or by implication, including through the use of a 

product name, endorsement, depiction, or illustration, any representation, other than 

representations covered under Section I and/or Section II of this Order, about the health or fitness 

benefits of any Covered Product, including but not limited to, representations regarding caloric 

expenditure, calorie bum, blood circulation, aerobic conditioning, muscle tone, and muscle 

activation, unless the representation is non-misleading and, at the time of making such 

representation, Defendant possesses and relies upon competent and reliable scientific evidence 

that is sufficient in quality and quantity based on standards generally accepted in the relevant 

scientific fields, when considered in light of the entire body of relevant and reliable scientific 

evidence, to substantiate that the representation is true. For purposes of this Section, competent 

and reliable scientific evidence means tests, analyses, research, or studies that have been 

conducted and evaluated in an objective manner by qualified persons and are generally accepted 

in the profession to yield accurate and reliable results. 

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IV. 

PROHmITED REPRESENTATIONS 

REGARDING TESTS OR STUDffiS 

IT IS FURTHER ORDERED that Defendant, directly or through any corporation, 

partnership, subsidiary, division, trade name, or other device, and its officers, agents, servants, 

representatives, employees, and all 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 

Covered Product in or affecting commerce, is hereby permanently restrained and el1ioined from 

misrepresenting, or assisting others in misrepresenting, in any manner, directly or by implication, 

including through the use of any product name, endorsement, depiction, or illustration, the 

existence, contents, validity, results, conclusions, or interpretations of any test, study, or research, 

including but not limited to misrepresenting that wearing any Covered Product will result in a 

quantified percentage or an amount of muscle activation, toning, or strengthening. 

v. 

MONETARY JUDGMENT AND CONSUMER REDRESS 

IT IS FURTHER ORDERED that: 

A. Judgment is hereby entered in favor of the Commission and against Defendant in 

the amount of Forty Million Dollars ($40,000,000). 

B. Defendant is ordered to pay this judgment by depositing Forty Million Dollars 

($40,000,000) into an interest-bearing escrow account ("Escrow Account") no 

later than fifteen (15) days after entry of this Order. A representative of the 

Commission and Defendant shall execute an Escrow Agreement no later than 

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seven (7) days after entry nfthe Order, which shall provide instructions to the 

Escrow Agent consistent with the terms of this Order. The money deposited into 

the Escrow Account and all interest thereon (collectively, "Escrow Funds") shall be 

administered by BMC Group ("Escrow Agent") in accordance with the terms of this 

Order and the Escrow Agreement. 

1. The Escrow Agent's acceptance of the deposited judgment amount into the 

Escrow Account shall constitute the Escrow Agent's agreement to comply 

with the terms of this Order and consent to the jurisdiction of this Court. 

2. All reasonable expenses incurred by the Escrow Agent to administer the 

Escrow Account and disburse Escrow Funds shall be paid from the 

Escrow Funds upon approval of a representative of the Commission, and 

such approval shall not be unreasonably withheld. Such payments shall be 

based on invoices, and shall be paid timely and on a rolling basis as they 

become due. 

C. Defendant relinquishes all dominion, control, and title to the Escrow Funds to the 

fullest extent permitted by law. Defendant shall make no claim to or demand for 

return of the Escrow Funds, directly or indirectly, through counselor otherwise. 

D. All Escrow Funds shall be used for equitable relief including, but not limited to, 

consumer redress and attendant expenses for administration of the Escrow 

Account, and for administration of consumer redress, as set forth herein, including in 

Subparagraphs E and F below. If direct redress to consumers is wholly or partially 

impracticable or if Escrow Funds remain after redress is completed, the 

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Commission may apply all remaining Escrow Funds for such other equitable relief 

(including consumer information remedies) as it determines to be reasonably 

related to Defendant's practices alleged in the Complaint Any Escrow Funds not 

used for such equitable relief, as set forth herein, including in Subparagraphs E 

and F below, shall be deposited to the U.S. Treasury as disgorgement No portion 

of any payment under the judgment herein shall be deemed a payment of any fine, 

penalty, or punitive assessment 

E. Consumer redress that would otherwise be conducted by the Commission using 

the Escrow Funds pursuant to Subparagraph D may be instead conducted through 

prompt, court-approved resolution of one or more private class action lawsuits 

against the Defendant, provided however, that a representative ofthe Commission 

must approve of each of the following components of any such class action 

resolution: 

I. the Class Action Settlement Administrator submitted for court approval in 

the class action(s), with the Class Action Settlement Administrator being 

required to handle consumer information in a manner that is consistent 

with the Commission's privacy and data security policies and practices; 

2. the Notice Administrator submitted for court approval in the class 

action(s); 

3. The Class Action Notice and the Notice Plan submitted for court approval 

in the class action(s); 

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4. The Consumer Claim Form submitted for court approval in the class 

action(s); and 

5. The Settlement Claim Procedures and Claim Calculation Protocol initially 

submitted and any changes subsequently submitted for court approval in 

the class action(s). 

Where approval is required by a representative of the Commission, such approval 

shall not be unreasonably withheld and shall be timely provided. 

F. If the conditions in Subparagraph E are met and no Termination Events occur, as 

defined in Subparagraph G, and pursuant to the instructions of the Escrow 

Agreement, the Escrow Agent shall release Escrow Funds in accordance with the 

Settlement Claim Procedures and Claim Calculation Protocol to pay the 

reasonable expenses necessary to provide notice to potential claimants in the class 

action(s); reasonable administrative expenses, including the costs of and expenses 

incurred by the Class Action Settlement Administrator and Notice Administrator; 

and disbursements to valid claimants. Such payments shall be based on invoices 

and shall be paid timely and on a rolling basis as they become due. Escrow Funds 

shall not be used to pay any other fees, costs, or expenses associated with 

resolution of the class action(s), including but not limited to attorneys' fees, 

litigation expenses, or incentive payments to the class representatives. 

G. The Commission may, at its sole discretion, terminate the obligations under 

Subparagraphs E and F, if: 

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L A settlement agreement and preliminary approval order containing the 

terms outlined in Subparagraph E is not submitted to the court within 

thirty (30) days after entry of this Order; or 

2. The Notice Administrator has not completed publication notice pursuant to 

the Notice Plan within eight (8) months after entry of this Order; or 

3. The Class Action Settlement Administrator has not begun accepting 

claims from eligible claimants within eight (8) months after entry of this 

Order; or 

4. The disbursement of Escrow Funds to eligible claimants has not begun 

within one (1) year after entry ofthis Order; or 

5. The court fails to approve or approves something that is materially 

different in Subparagraphs E.I-5 than what is approved by a representative 

of the Commission; or 

6. The Class Action Settlement Administrator is, for any reason, replaced, 

and a representative of the Commission does not approve the next Class 

Action Settlement Administrator agreed to by the Parties to the class 

action(s) and recommended for approval to the court in the class action(s), 

with such approval by a representative of the Commission to be timely 

provided and not to be unreasonably withheld; or 

7. The Notice Administrator is, for any reason, replaced, and a representative 

ofthe Commission does not approve the next Notice Administrator agreed 

to by the Parties to the class action(s) and recommended for approval to 

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the court in the class action(s), with such approval by a representative of 

the Commission to be timely provided and not to be unreasonably 

withheld 

(collectively, "Termination Events"). A representative of the Commission shall, 

consistent with Subparagraph F, authorize the Escrow Agent to use Escrow Funds 

to pay all valid costs and expenses incurred up to the date of the Termination 

Event. 

H. If a Termination Event occurs and the Commission elects, at its sole discretion, to 

terminate the obligations under Subparagraphs E and F, then: 

1. The Commission shall have sole discretion regarding the use ofthe 

remaining Escrow Funds in accordance with Subparagraph D, and the 

Escrow Agent shall only release Escrow Funds in accordance with 

instructions from a representative of the Commission; 

2. The Commission may, at its sole discretion, continue to work with the 

Class Action Settlement Administrator and Notice Administrator; and 

3. Within fourteen (14) days of receipt ofa written request from a 

representative of the Commission, Defendant shall provide the following 

information in accordance with instructions provided by a representative 

of the Commission: 

a) A list of all consumers who purchased any Covered Product 

directly from Defendant during the relevant time period, provided 

such information is kept in the regular course of business; and 

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b) Subject to court approval in the class actiones), any information 

that Defendant, its agents, or the Class Action Settlement 

Administrator have regarding the class action claims. 

c) Defendant, its agents, or the Class Action Settlement Administrator 

shall confer with a representative of the Commission concerning 

the manner, format, and production of the list and information 

transmitted. 

I. If Escrow Funds remain after payment of all claims and expenses as part of 

redress conducted in accordance with resolution of the class actiones) as provided 

in Subparagraphs E and F, then the Commission shall have sole discretion 

regarding the use ofthe remaining Escrow Funds in accordance with 

Subparagraph D, and the Escrow Agent shall only release Escrow Funds in 

accordance with instructions from a representative of the Commission. 

J. The total amount of all payment obligations incurred herein shall not exceed the 

total amount of Escrow Funds. 

K. Defendant shall have no right to challenge any actions the Commission or its 

representatives may take pursuant to Subparagraphs D, G, H, and I. 

L. Defendant agrees that the facts as alleged in the Complaint filed in this action, and 

only for purposes of this Order, shall be taken as true without further proof in any 

bankruptcy case or subsequent civil litigation pursued by the Commission to 

enforce its rights to any payment or money judgment pursuant to this Order, 

including, but not limited to, a nondischargeability complaint in any bankruptcy 

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case. Defendant further stipulates and agrees, for purposes of this Order, that the 

facts alleged in the Complaint establish all elements necessary to sustain an action 

pursuant to Section 523(a)(2)(A) ofthe Bankruptcy Code, 11 U.S.C. 

§ 523(a)(2)(A), and that this Order shall have collateral estoppel effect for such 

purposes. 

M. In accordance with 31 U.S.C. § 7701, Defendant is hereby required, unless it has 

done so already, to furnish to the Commission its taxpayer identifying number, 

which shall be used for the purposes of collecting and reporting on any delinquent 

amount arising out of Defendant's relationship with the government. 

N. In the event of default on Defendant's obligation to make payment under this 

Order, interest, computed pursuant to 28 U.S.C. § 1961(a), shall accrue from the 

date of default to the date of payment. 

VI. 

COMPLIANCE MONITORING 

IT IS FURTHER ORDERED that, for the purpose of monitoring and investigating 

compliance with any provision of this Order: 

A. Within fourteen (14) days of receipt of written notice from a representative of the 

Commission, Defendant shall submit additional written reports, which are true 

and accurate and sworn to under penalty of peIjury; produce documents for 

inspection and copying; appear for deposition; and provide entry during normal 

business hours to any business location in Defendant's possession or direct or 

indirect control to inspect the business operation. 

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B. In addition, the Commission is authorized to use all other lawful means, 

including, but not limited to: 

I. Obtaimng discovery from any person, without further leave of the court, 

using the procedures prescribed by Fed. R. Civ. P. 30, 3 1,33,34,36,45 

and 69; and 

2. Having its representatives pose as consumers and suppliers to Defendant, 

its employees, or any other entity managed or controlled in whole or in 

part by Defendant, without the necessity of identification or prior notice. 

C. Defendant shall permit representati ves of the Commission to interview any 

employer, consultant, independent contractor, representative, agent, or employee 

who has agreed to such an interview, relating in any way to any conduct subject to 

this Order. The person interviewed may have counsel present. 

Provided however, that nothing in this Order shall limit the Commission's lawful 

use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 

15 U.S.C. §§ 49, 57b-l, to obtain any documentary material, tangible things, 

testimony, or information relevant to unfair or deceptive acts or practices in or 

affecting commerce (within the meaning of IS U.S.C. § 45(a)(I)). 

VII. 

COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that, in order that compliance with the provisions of this 

Order may be monitored: 

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A. For a period of three (3) years from the date of entry of this Order, Defendant shall 

notifY the Commission of any changes in the corporate structure of Defendant or 

any business entity that Defendant directly or indirectly controls, or has an 

ownership interest in, that may affect compliance obligations arising under this 

Order, including but not limited to: incorporation or other organization; 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; or a 

change in the business name or address, at least thirty (30) days prior to such 

change, provided tllat, with respect to any such change in the business entity 

about which Defendant learns less than thirty (30) days prior to the date such 

action is to take place, Defendant shall notifY the Commission as soon as is 

practicable after obtaining such knowledge. 

B. One hundred eighty (180) days after the date of entry of this Order, Defendant 

shall provide a written report to the FTC, which is true and accurate and sworn to 

under penalty of peJjury, setting forth in detail the manner and form in which it 

has complied and is complying with this Order. This report shall include, but not 

be limited to: 

1. A copy of each acknowledgment of receipt of this Order, obtained 

pursuant to the Section titled "Distribution of Order"; and 

2. Any other changes required to be reported under Subsection A of this 

Section. 

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C. Defendant shall notify the Commission of the filing of a bankruptcy petition by 

Defendant within fifteen (15) days of filing. 

D. For the purposes of this Order, Defendant shall, unless otherwise directed by the 

Commission's authorized representatives, send by ovemight courier (not the U.S. 

Postal Service) all reports and notifications required by this Order to the 

Commission, to the following address: 

Associate Director for Enforcement 

Federal Trade Commission 

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

Re: FTC v. Skecllers, Matter No. 

Provided tllat, in lieu of overnight courier, Defendant may send such reports or 

notifications by first-class mail, but only if Defendant contemporaneously sends 

an electronic version of such report or notification to the Commission at: 

DEBrief@ftc.gov. 

E. For purposes of the compliance reporting and monitoring required by this Order, 

the Commission is authorized to communicate directly with Defendant unless or 

until Defendant directs the Commission to communicate with it through its 

outside legal counsel and identifies the name and contact information for said 

counsel. All communications to Defendant related to this Order should go to the 

General Counsel of Skechers at Defendant's corporate headquarters, with a copy 

to Daniel Petrocelli, O'Melveny & Myers LLP, 1999 Avenue of the Stars, 

7th Floor, Los Angeles, CA 90067. 

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VIII. 

RECORDKEEPlNG 

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

of this Order, Defendant is hereby restrained and enjoined from failing to create and retain the 

following records: 

A. Accounting records that reflect the cost of the Covered Product, revenues 

generated for the Covered Product, and, to the extent such records are created and 

maintained in the ordinary course of business, the disbursement of such revenues; 

B. Personnel records accurately reflecting: the name, address, and telephone number 

of each person employed in any capacity by such business, including as an 

independent contractor; that person's job title or position; the date upon which the 

person commenced work; and the date and reason for the person's termination, if 

applicable; provided however, that with respect to those persons covered by this 

Subsection whose employment has terminated, personnel records need only be 

retained for three (3) years from the date of tennination; 

C. Records accurately reflecting: the name, address, and telephone number of each 

reseller or retailer ofthe Covered Product; the dollar amounts paid; and the 

identification and quantity of items purchased; 

D. Customer files containing the names, addresses, telephone numbers, dollar 

amounts paid, quantity of Covered Product purchased, and description of items or 

services purchased, to the extent such information is obtained in the ordinary 

course of business; 

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E. Complaints and refund requests relating to any Covered Product (whether 

received directly or indirectly, such as through a third-party) and any responses to 

those complaints or requests; 

F. Copies of all advertisements, promotional materials, sales scripts, training 

materials, Web sites, or other marketing materials utilized in the advertising, 

marketing, promotion, offering for sale, sale, or distribution of any Covered 

Product. For purposes of this provision, keeping one representative copy of all 

non-identical materials referenced in this provision is sufficient for compliance; 

G. All materials that were relied upon in making any representations contained in the 

materials identified in Subsection F above, including all documents evidencing or 

referring to the accuracy of any claim therein or to the benefits, performance, or 

efficacy of any Covered Product, including, but not limited to, all tests, reports, 

studies, demonstrations, or other evidence that confirms, contradicts, qualifies, or 

calls into question the accuracy of any claim regarding the benefits, performance, 

or efficacy of any products covered by this Order, including complaints and other 

communications with consumers or with governmental or consumer protection 

agencies; 

H. Records accurately reflecting the name, address, and telephone number of each 

laboratory engaged in the development or creation of any testing obtained for the 

purpose of advertising, marketing, promoting, offering for sale, selling, or 

distributing any Covered Product; and 

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I. All records and documents necessary to demonstrate full compliance with each 

provision of this Order, including, but not limited to, copies of acknowledgments 

of receipt of this Order required by the Sections titled "Distribution of Order" and 

"Acknowledgment of Receipt of Order" and all reports submitted to the FTC 

pursuant to the Section titled "Compliance Reporting." 

IX. 

DISTRIBUTION OF ORDER 

IT IS FURTHER ORDERED that, for a period of three (3) years from the date of entry 

of this Order, Defendant shall deliver copies of the Order as directed below: 

A. Defendant shall deliver a copy of this Order to: (1) each of its principals, officers, 

and directors having decision-making authority with respect to the subject matter 

of the Order; (2) all of its employees, agents, and representatives having primary 

responsibilities with respect to the subject matter of the Order; and (3) any 

business entity resulting from any change in structure set forth in Subsection A of 

tile Section titled "Compliance Reporting." For current personnel, delivery shall 

be within seven (7) days of entry of this Order. For new personnel, delivery shall 

occur prior to their assuming their responsibilities. For any business entity 

resulting from any change in structure set forth in Subsection A of the Section 

titled "Compliance Reporting," delivery shall be at least fourteen (14) days prior 

to the change in structure. 

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B. Defendant must secure a signed and dated statement acknowledging receipt ofthe 

Order, within thirty (30) days of delivery, from all persons receiving a copy of the 

Order pursuant to this Section. 

X. 

NOTIFICATION OF ORDER 

IT IS FURTHER ORDERED that Defendant shall send no later than fifteen (15) days 

after entry of this Order, by first-class mail, postage paid and return receipt requested, or by 

courier service such as FedEx with signature proof of delivery, an exact copy of the notice 

attached hereto as Attachment A, showing the date of mailing, to each reseller and retailer who 

purchased or otherwise received any Covered Product directly from Defendant and who 

continues to market any Covered Product. The notice required by this Section shall not include 

any other document or enclosures and may be sent to the principal place of business of each such 

reseller or retailer. 

XI. 

ACKNOWLEDGMENT OF RECEIPT OF ORDER 

IT IS FURTHER ORDERED that Defendant, within seven (7) business days of receipt 

of this Order as entered by the Court, shall submit to the Commission a truthful sworn statement 

acknowledging receipt of this Order. 

XII. 

RETENTION OF JURISDICTION 

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

purposes of construction, modification, and enforcement of this Order. 

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July 12, 2012 s/ James S. Gwin

Case: 1:12-cv-01214-JG Doc #: 5 Filed: 07/12/12 23 of 27. PageID #: 131

SO ORDERED: 

Dated: _________ _ 

SO STIPULATED AND AGREED: 

ATTORNEYS FORPLAINTWF 

FEDERAL TRADE COMMISSION: 

LARISSA L. BUNGO 

(Ohio Bar 0066148) 

DANA C. BARRAGATE 

(Ohio Bar 0065748) 

MICHAEL MILGROM 

(Ohio Bar 0012959) 

CHRISTOPHERD. PANEK 

(Ohio Bar 0080016) 

Federal Trade Commission 

East Central Region 

1111 Superior Avenue, Suite 200 

Cleveland, Ohio 44114 

Phone (216) 263-3403 (Bungo) 

Fax: (216) 263-3426 

Ibungo@ftc.gov 

dbarragate@ftc.gov 

mmilgrom@ftc.gov 

cpanek@ftc.gov 

United States District Judge 

Page 23 0[27 
Case: 1:12-cv-01214-JG Doc #: 5 Filed: 07/12/12 24 of 27. PageID #: 132

SO STIPULATED AND AGREED: 

FOR DEFENDANT: 

SKECHERS U.S.A., INC., d/b/a Skechcrs 

ooJ.C 

DAVID WEINBERG 

Executive Vice President 

SKECHERS U.S.A., INC., d/b/a Skecher 

228 Manhattan Beach Boulevard 

Manhattan Beach, CA 90266 

Page 24 of27 
Case: 1:12-cv-01214-JG Doc #: 5 Filed: 07/12/12 25 of 27. PageID #: 133

SO STIPULATED AND AGREED: 

DEFENDANT'S OUTSIDE COUNSEL: 

O'Melveny & Myers LLP 

1999 Avenue of the Stars, 7th Floor 

Los Angeles, CA 90067 

Phone: (310) 553-6700 

Fax: (310) 246-6779 

dpetrocelli@omm.com 

jbarker@omm.com 

makane@omm.com 

Page 25 of27 
Case: 1:12-cv-01214-JG Doc #: 5 Filed: 07/12/12 26 of 27. PageID #: 134

SO STIPULATED AND AGREED: 

DEFENDANT'S 

655 Fiftee th eet, N.W. 

Washington, D.C. 20005-5793 

Phone: (202) 879-5000 

Fax: (202) 879-5200 

tim.muris@kirkland.com 

Page 26 of27 
Case: 1:12-cv-01214-JG Doc #: 5 Filed: 07/12/12 27 of 27. PageID #: 135

ATTACHMENT A 

[On Skechers U.S.A., Inc., Letterhead] 

[Insert Date] 

[ Addressee] 

Dear Skechers U.S.A., Inc., Retail Business Partner: 

In response to a lawsuit by the Federal Trade Commission (FTC) and separate lawsuits 

brought by a group of state attorneys general, Skechers has agreed to stop making certain claims 

for the following footwear products: Shape-ups, the Resistance Runner, Toners, and Tone-ups. 

Although we dispute the charges, to settle the FTC's and the states' cases against us, 

Skechers has agreed to stop using advertising or promotional materials claiming that any of our 

footwear products can: 

• Improve or increase muscle tone and muscle strength; 

• Improve or increase overall circulation or aerobic conditioning; 

• Result in increased weight loss or loss of body fat; and/or; 

• Result in improvement or reduction in body composition. 

In addition to the above, Skechers has agreed to stop using advertising or promotional 

materials claiming that the Resistance Runner improves or increases muscle activation. 

Please talee these three steps immediately: 

(1) If you have materials on display (POS, posters, etc.) that include 

any of these claims, please remove them. 

(2) Where these claims appear on boxes, please cover them with 

stickers that Skechers will provide. 

(3) Ifinserts in boxes or footwear hangtags include any of these 

claims, please remove them. 

We are actively pursuing additional studies in the marketplace. We look forward to 

sharing these details with you as they become available. 

You can find out more about the settlement at www.ftc.gov. Please call [Insert name and 

telephone numbers ofthe responsible Skechers U.S.A., Inc., Attorney or Officer.] if you have any 

questions. 

Skechers thanks you for your business and greatly appreciates your cooperation in this 

matter. 

Sincerely, 

Skechers U.S.A., Inc. 

Page 27 of27