FEDERAL TRADE COMMISSION | OFFICE OF THE SECRETARY | FILED 3/04/2021 | OSCAR NO. 600886 | Page 1 of 6 | PUBLIC

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PUBLIC 

UNITED STATES OF AMERICA 

BEFORE THE 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. 

DOCKET NO. 9397 

COMPLAINT COUNSEL’S SUPPLEMENTAL OPPOSITION TO 

RESPONDENTS’ MOTION TO AMEND 

Effectively conceding their original motion’s near-certain failure, Respondents now 

waive certain affirmative defenses to address one of three insurmountable obstacles to the relief 

they seek. Previously, through a proposed amended answer citing Rule 3.12(b)(2), Respondents 

claimed they no longer contest certain unspecified Complaint allegations while asserting 

affirmative defenses and without unequivocally admitting particular facts. See No. 600668 (Feb. 

12, 2021). However, as Complaint Counsel’s opposition explained, Respondents’ approach 

failed for several reasons: (1) Respondents may not assert affirmative defenses at all; (2) 

Respondents must admit allegations unequivocally; and (3) Respondents may not dispute 

particular allegations by arguing that this action is moot and contrary to the public interest. See 

No. 600771 (Feb. 24, 2021). Respondents subsequently withdrew only some of their affirmative 

defenses—those concerning mootness and the public interest, see No. 600784 (Feb. 25, 2021). 

This maneuver, addressing only one of their motion’s three fatal defects, must fail. 

Importantly, Complaint Counsel’s opposition to Respondents’ original motion identified 

the two continuing flaws—the presence of affirmative defenses and the failure to unequivocally 

admit facts. Respondents’ silence on these problems speaks volumes. With a few additional 
 

 

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sentences, Respondents could have easily withdrawn all of their affirmative defenses and stated 

unequivocally that the Complaint’s allegations are true. Respondents’ refusal to do so 

demonstrates that they do not unequivocally accept that all of the Complaint’s material 

allegations are true.1

 Because Respondents’ disingenuous nolo contendre approach violates both 

the spirit and the letter of Rule 3.12(b)(2), their motion must be denied. 

Background 

Shortly before the current dispute concerning Rule 3.12(b)(2), Respondents moved to 

force Complaint Counsel to accept a “contested stipulated cease-and-desist order.” See No. 

600441 (Jan. 13, 2021). The ALJ rejected Respondents’ “novel” request made without “any case 

or other precedent.” No. 600607 (Feb. 1, 2021) at 3. When that failed, Respondents moved to 

amend their answer through a proposed amendment that asserted five affirmative defenses (some 

of which themselves make multiple arguments). Importantly, many of these defenses preserve 

Respondents’ right to challenge facts found through these proceedings as not binding on the 

basis that the administrative process that produces the factfinding is allegedly unconstitutional or 

otherwise unlawful. For instance, Respondents asserted that these proceedings violate the Fifth 

Amendment because they “seek[] to deny Respondents of property and rights without due 

process of law.” No. 600668, Ex. 1 at 2. Respondents further contend that these proceedings 

violate the separation of powers because “the Commissioners and the ALJs are not subject to the 

supervision and authority of the President.” Id. Respondents also assert, among other things, 

that “de novo review of the ALJ’s factual findings” violates the Constitution and the 

Administrative Procedure Act (“APA”), and that they object to “any findings” that allegedly 

exceed the Commission’s statutory authority. See id. Respondents also claimed that this matter 

is moot, and contrary to the public interest. See id. Finally, Respondents accompanied their 

1

 Perhaps recognizing that their unwillingness to withdraw all of their affirmative 

defenses and otherwise admit facts unequivocally means their motion still must fail, Respondents 

also leave unaddressed Complaint Counsel’s alternative argument that, should Respondents’ 

motion be granted, it should be granted only upon conditions. Potential conditions are only 

germane if Respondents have satisfied Rule 3.12(b)(2), which they have not. 

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proposed answer with a motion explaining their choice “not to contest” unspecified allegations 

(rather than outright admitting their truth), see No. 600668 at 3, and suggesting that, if 

Respondents had greater resources, or a “fair, impartial [and] constitutional” process, they would 

demonstrate that the Complaint’s allegations are actually false, see id. at 3. 

As noted above, Complaint Counsel identified multiple fatal problems with Respondents’ 

proposed answer, including that Rule 3.12(b)(2) does not permit affirmative defenses or an 

equivocal nolo contendre position. With their new gambit destined to fail, Respondents waived 

their mootness and public interest defenses and “agree[d] not to assert these particular 

affirmative defenses in any future answer[.]” No. 600784 at 1. However, Respondents’ waiver 

does not specify whether it applies only to “future answers” in this proceeding, and regardless, 

Respondents still assert their myriad due process, separation of powers, and APA defenses. 

Accordingly, Respondents still reserve the right to assert constitutional and statutory challenges 

to any fact the ALJ and Commission ultimately find. 

Argument 

I. Respondents Improperly Assert Affirmative Defenses. 

Respondents seek to amend their answer pursuant to Rule 3.12(b)(2), a section that 

makes no provision for defenses. Rather, Rule 3.12(b)(1)(i)—which applies to “answer[s] in 

which the allegations of a complaint are contested”—provides that the answer must contain “[a] 

concise statement of the facts constituting each ground of defense[.]” 

Notably, if Respondents could assert defenses under Rule 3.12(b)(2), there would be little 

difference between subsections (b)(1) and (b)(2), making subsection (b)(2) largely surplusage. 

Cf. Freeman v. Quicken Loans, Inc., 566 U.S. 624, 635 (2012) (noting that the law “favors that 

interpretation which avoids surplusage”). Nothing prevents Respondents seeking leave to amend 

under Rule 3.12(b)(1) with an answer that includes “[s]pecific admissions . . . of each fact 

alleged in the complaint,” id. at 3.12(b)(1)(ii), along with whatever “defenses” Respondents 

identify, id. at 3.12(b)(1)(i). If this tribunal granted leave under those circumstances, then the 

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litigation would simply proceed to trial. In short, Respondents should not be permitted to meld 

two distinct subsections. Because subsection (b)(2) does not allow defenses, Respondents’ 

attempt to proceed under that subsection must be denied. 

II. Respondents Have Not Unequivocally Admitted That the Complaint’s Allegations 

Are True. 

Rule 3.12(b)(2) requires “formal concessions in the pleadings,” also known as “judicial 

admissions. See, e.g., Keller v. United States, 58 F.3d 1194, 1199 n.8 (7th Cir. 1995) (defining 

judicial admissions). Notably, judicial admissions are a unique class of admission distinct from 

“the discovery device known as ‘requests for admissions.’” 22A FED. PRAC. & PROC. EVID. § 

5194 (2d ed. 2020). In fact, the Rules recognize that Rule 3.12(b)(2) admissions have unique 

attributes, including forming the basis for Commission factfinding that binds a respondent in 

subsequent proceedings. Specifically, Rule 3.32(c) permits discovery admissions to be 

withdrawn or modified under certain circumstances, and specifies that discovery admissions may 

not be used against a party “in any other proceeding.” In contrast, Rule 3.12(b)(2) contains no 

comparable features and allows the admissions to “provide a record basis on which the 

Commission shall issue a final decision containing appropriate findings,” which “shall be 

conclusive” upon the respondent. See 15 U.S.C. § 45(c). The binding nature of the facts this 

tribunal and the Commission will find based on 3.12(b)(2) judicial admissions is critical: they 

are not genuinely binding if Respondents can challenge them on constitutional or statutory 

grounds. Consequently, because Rule 3.12(b)(2) serves to create a record to support conclusive 

factfinding that binds a respondent in future proceedings, permitting affirmative defenses that 

seek to render that factfinding subject to future constitutional and statutory challenge is 

incompatible with the Rule. 

The requirement that judicial admissions be “unequivocal” underscores the point. See, 

e.g., Teleglobe Commc’ns Corp., 493 F.3d 345, 377 (3d Cir. 1977) (“[A]dmissions must be 

unequivocal.”). The purpose of Rule 3.12(b)(2) is to permit respondents to admit allegations 

because they accept them as “true,” thereby making them an appropriate basis for “conclusive” 

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findings of fact pursuant to 15 U.S.C. § 45(c). Admissions that Respondents reserve the right to 

dispute are not admissions at all, let alone the unequivocal judicial admissions that Rule 

3.12(b)(2) requires. Furthermore, as discussed above, Respondents continue to suggest that they 

decline to contest the facts at issue solely for financial or strategic reasons. This exacerbates 

Respondents’ equivocation and the Commission’s corresponding inability to use Respondents’ 

nolo contendre plea as a basis for conclusive, binding factfinding. In short, because Respondents 

have not unequivocally admitted facts, their proposed answer fails to satisfy Rule 3.12(b)(2). 

Conclusion 

For all the foregoing reasons, Respondents’ motion should be denied. 

Respectfully submitted, 

s/ Jonathan Cohen 

 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 Supplemental Opposition to 

Respondents’ Motion to Amend on counsel for the Respondents on March 4, 2021 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/ Jonathan Cohen 

 Jonathan Cohen 

 Federal Trade Commission

 600 Pennsylvania Ave, NW, CC-9528 

 Washington, DC 20580 

 (202) 326-2551; jcohen2@ftc.gov 

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