UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

 

 ) 

In the Matter of ) Agreement Containing Consent Order

 ) 

YOLO Colorhouse, LLC, ) 

a limited liability company. ) File No. 1623082 

 ) 

 ) 

 ) 

The Federal Trade Commission (“Commission”) has conducted an investigation of certain 

acts and practices of YOLO Colorhouse, LLC (“Proposed Respondent”). The Commission’s 

Bureau of Consumer Protection (“BCP”) has prepared a draft of an administrative Complaint 

(“draft Complaint”). BCP and Proposed Respondent, through their duly authorized officers, 

enter into this Agreement Containing Consent Order (“Consent Agreement”) to resolve the 

allegations in the attached draft Complaint through a proposed Decision and Order to present to 

the Commission, which is also attached and made a part of this Consent Agreement. 

IT IS HEREBY AGREED by and between Proposed Respondent and BCP, that:

1. The Proposed Respondent is YOLO Colorhouse, LLC, a limited liability company with its 

principal office or place of business at 519 NE Hancock St. # B, Portland, Oregon 97212. 

2. Proposed Respondent neither admits nor denies any of the allegations in the Complaint, 

except as specifically stated in the Decision and Order. Only for purposes of this action, 

Proposed Respondent admits the facts necessary to establish jurisdiction. 

3. Proposed Respondent waives: 

a. Any further procedural steps;

b. The requirement that the Commission’s Decision contain a statement of findings of fact 

and conclusions of law; and 

c. All rights to seek judicial review or otherwise to challenge or contest the validity of the 

Decision and Order issued pursuant to this Consent Agreement. 

4. This Consent Agreement will not become part of the public record of the proceeding unless 

and until it is accepted by the Commission. If the Commission accepts this Consent Agreement, 

it, together with the draft Complaint, will be placed on the public record for 30 days and 

information about it publicly released. Acceptance does not constitute final approval, but it 

serves as the basis for further actions leading to final disposition of the matter. Thereafter, the
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Commission may either withdraw its acceptance of this Consent Agreement and so notify

Proposed Respondent, in which event the Commission will take such action as it may consider 

appropriate, or issue and serve its Complaint (in such form as the circumstances may require) 

and decision in disposition of the proceeding, which may include an Order. See Section 2.34 of 

the Commission’s Rules, 16 C.F.R. § 2.34.

5. If this agreement is accepted by the Commission, and if such acceptance is not subsequently 

withdrawn by the Commission pursuant to Commission Rule 2.34, the Commission may, 

without further notice to Proposed Respondent: (1) issue its Complaint corresponding in form 

and substance with the attached draft Complaint and its Decision and Order; and (2) make 

information about them public. Proposed Respondent agrees that service of the Order may be 

effected by its publication on the Commission’s website (ftc.gov), at which time the Order will 

become final. See Rule 2.32(d). Proposed Respondent waives any rights it may have to any 

other manner of service. See Rule 4.4.

6. When final, the Decision and Order will have the same force and effect and may be altered, 

modified, or set aside in the same manner and within the same time provided by statute for other 

Commission orders.

7. The Complaint may be used in construing the terms of the Decision and Order. No 

agreement, understanding, representation, or interpretation not contained in the Decision and 

Order or in this Consent Agreement may be used to vary or contradict the terms of the Decision 

and Order.

8. Proposed Respondent agrees to comply with the terms of the proposed Decision and Order

from the date it signs this Consent Agreement. Proposed Respondent understands that it may be 

liable for civil penalties and other relief for each violation of the Decision and Order after it 

becomes final.

YOLO Colorhouse, LLC

By:_________________________________

Puji Sherer 

President

Date:__________________

FEDERAL TRADE COMMISSION

By:_________________________________

Robert M. Frisby

Attorney, Bureau of Consumer Protection

Date:__________________
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COUNSEL TO PROPOSED RESPONDENT:

By: ________________________________

Michael Cohen

Schwabe Williamson & Wyatt, P.C.

Date:__________________

APPROVED:

By: ________________________________

James A. Kohm

Associate Director, Enforcement Division

Date:__________________

By: ____________________________

Thomas B. Pahl, Acting Director

Bureau of Consumer Protection

Date:__________________
1623082 

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Maureen K. Ohlhausen, Acting Chairman 

Terrell McSweeny

 

 ) 

In the Matter of ) Decision and Order

 ) 

YOLO Colorhouse, LLC ) Docket No. Ca limited liability company. ) 

 ) 

 ) 

 ) 

DECISION

The Federal Trade Commission (“Commission”) initiated an investigation of certain acts and 

practices of the Respondent named above in the caption. The Commission’s Bureau of 

Consumer Protection (“BCP”) prepared and furnished to Respondent a draft Complaint. BCP 

proposed to present the draft Complaint to the Commission for its consideration. If issued by the 

Commission, the draft Complaint would charge the Respondent with violations of the Federal 

Trade Commission Act.

Respondent and BCP thereafter executed an Agreement Containing Consent Order (“Consent 

Agreement”). The Consent Agreement includes: 1) statements by Respondent that it neither 

admits nor denies any of the allegations in the Complaint, except as specifically stated in this 

Decision and Order (“Order”), and that only for purposes of this action, Respondent admits the 

facts necessary to establish jurisdiction; and 2) waivers and other provisions as required by the 

Commission’s Rules. 

The Commission considered the matter and determined that it had reason to believe that 

Respondent has violated the Federal Trade Commission Act, and that a Complaint should issue 

stating its charges in that respect. The Commission accepted the executed Consent Agreement 

and placed it on the public record for a period of 30 days for the receipt and consideration of 

public comments. The Commission duly considered any comments received from interested 

persons pursuant to Section 2.34 of its Rules, 16 C.F.R. § 2.34. Now, in further conformity with 

the procedure prescribed in Rule 2.34, the Commission issues its Complaint, makes the 

following Findings, and issues the following Order:
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Findings

1. The Respondent is YOLO Colorhouse, LLC, a limited liability company with its 

principal office or place of business at 519 NE Hancock St. # B, Portland, Oregon 97212.

2. The Commission has jurisdiction over the subject matter of this proceeding and over the 

Respondent, and the proceeding is in the public interest.

ORDER

Definitions

For purposes of this Order, the following definitions apply:

A. “Covered product” means any architectural coating applied to stationary structures, 

portable structures, and their appurtenances. 

B. “Volatile Organic Compound” (“VOC”) means any compound of carbon that participates 

in atmospheric photochemical reactions, but excludes carbon monoxide, carbon dioxide, 

carbonic acid, metallic carbides or carbonates, ammonium carbonate, and specific 

compounds that the EPA has determined are of negligible photochemical reactivity, 

which are listed at 40 C.F.R. Section 51.100(s).

C. “Emission” means any compound that is emitted or produced during application, curing, 

or exposure of a covered product.

D. “Trace” level of emission means:

1. A VOC has not been intentionally added to the covered product; 

2. Emission of the covered product does not cause material harm that consumers 

typically associate with emission, including harm to the environment or human 

health; and 

3. Emission of the covered product does not result in more than harmless

concentrations of any compound higher than would be found under normal 

conditions in the typical residential home without interior architectural coating.

E. “Respondent” means YOLO Colorhouse, LLC, and its successors and assigns.
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I. Prohibited Misleading and Unsubstantiated Representations

Regarding Emission and VOC Level of Covered Product

IT IS ORDERED that Respondent, and Respondent’s officers, agents, employees, and 

attorneys, and all other persons in active concert or participation with any of them, who receive 

actual notice of this Order, whether acting directly or indirectly, in connection with the 

manufacturing, labeling, advertising, promotion, offering for sale, or sale of any covered product 

must not make any representation, expressly or by implication, that the emission level of a 

covered product is zero, or that the VOC level of a covered product is zero, unless the 

representation is non-misleading, including that, at the time such representation is made, 

Respondent 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:

A. The covered product’s emission is zero micrograms per meter cubed and the covered 

product’s VOC content is zero grams per liter; or

B. The covered product does not emit or produce more than a trace level of emission. 

For purposes of this Provision, “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.

II. Prohibited Misleading and Unsubstantiated Representations 

Regarding Environmental and Health Claims

IT IS FURTHER ORDERED that Respondent, and Respondent’s officers, agents, 

employees, and attorneys, and all other persons in active concert or participation with any of 

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection 

with the manufacturing, labeling, advertising, promotion, offering for sale, or sale of any covered

product must not make any representation, expressly or by implication, including through the use 

of a product name, regarding:

A. The emission of the covered product;

B. The VOC level of the covered product; 

C. The odor of the covered product;

D. Any other health benefit or attribute of, or risk associated with exposure to, the 

covered product, including those related to VOC, emission, or chemical composition; 

or
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E. Any other environmental benefit or attribute of the covered product, including those 

related to VOC, emission, or chemical composition,

unless the representation is non-misleading, including that, at the time such representation is 

made, Respondent 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 Provision, “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.

III. Notice to Dealers and Distributors

IT IS FURTHER ORDERED that Respondent deliver as soon as practicable, but in no 

event later than 60 days after the effective date of this Order, a notice in the form shown in

Attachment A to all of Respondent’s dealers and distributors, and all other entities to which

Respondent provided point-of-sale advertising, including product labels, for any covered product

identified in Attachment A. The notice required by this paragraph must not include any

document or other enclosures other than those referenced in Attachment A.

IV. Means and Instrumentalities

IT IS FURTHER ORDERED that Respondent, and its officers, agents, employees, and 

attorneys, and all other persons in active concert or participation with any of them, who receive 

actual notice of this Order, whether acting directly or indirectly, in connection with the 

manufacturing, labeling, advertising, promotion, offering for sale, or sale of any covered product, 

must not provide to others the means and instrumentalities with which to make, directly or 

indirectly, expressly or by implication, including through the use of endorsements or trade 

names, any false, unsubstantiated, or otherwise misleading representation of material fact, 

including but not limited to any representation prohibited by Provision I or by Provision II

above. For purposes of this Provision, “means and instrumentalities” shall mean any 

information, including, but not necessarily limited to, any advertising, labeling, or promotional, 

sales training, or purported substantiation materials, for use by trade customers in their marketing 

of any covered product, in or affecting commerce.

V. Acknowledgments of the Order

IT IS FURTHER ORDERED that Respondent obtain acknowledgments of receipt of this 

Order:

A. Respondent, within 10 days after the effective date of this Order, must submit to the 

Commission an acknowledgment of receipt of this Order.

B. Respondent must deliver a copy of this Order to: (1) all principals, officers, directors, 

and LLC managers and members; (2) all employees, agents, and representatives who 
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participate in the subject matter of the Order; and (3) any business entity resulting from 

any change in structure as set forth in the Provision titled Compliance Report and 

Notices. Delivery must occur within 10 days after the effective date of this Order for 

current personnel. For all others, delivery must occur before they assume their 

responsibilities.

C. From each individual or entity to which Respondent delivered a copy of this Order,

Respondent must obtain, within 30 days after delivery, a signed and dated 

acknowledgment of receipt of this Order.

VI. Compliance Report and Notices

IT IS FURTHER ORDERED that Respondent make timely submissions to the 

Commission:

A. Sixty days after the issuance date of this Order, Respondent must submit a compliance 

report, sworn under penalty of perjury, in which Respondent must: (1) identify the 

primary physical, postal, and email address and telephone number, as designated points 

of contact, which representatives of the Commission may use to communicate with 

Respondent; (2) identify all of Respondent’s businesses by all of their names, telephone 

numbers, and physical, postal, email, and Internet addresses; (3) describe the activities of 

each business; (4) describe in detail whether and how Respondent is in compliance with 

each Provision of this Order, including a discussion of all of the changes the Respondent

made to comply with the Order and a copy of the notice sent to dealers and distributors; 

and (5) provide a copy of each Acknowledgment of the Order obtained pursuant to this 

Order, unless previously submitted to the Commission.

B. Respondent must submit a compliance notice, sworn under penalty of perjury, within 14 

days of any change in any designated point of contact or the structure of Respondent or 

any entity that Respondent has any ownership interest in or controls directly or indirectly 

that may affect compliance obligations arising under this Order, including the creation, 

merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that engages 

in any acts or practices subject to this Order.

C. Respondent must submit notice of the filing of any bankruptcy petition, insolvency 

proceeding, or similar proceeding by or against Respondent within 14 days of its filing.

D. Any submission to the Commission required by this Order to be sworn under penalty of 

perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by 

concluding: “I declare under penalty of perjury under the laws of the United States of 

America that the foregoing is true and correct. Executed on: _____” and supplying the 

date, signatory’s full name, title (if applicable), and signature.
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E. Unless otherwise directed by a Commission representative in writing, all submissions to 

the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by 

overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, 

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue 

NW, Washington, DC 20580. The subject line must begin: In re YOLO Colorhouse, 

Docket No. . 

VII. Recordkeeping

IT IS FURTHER ORDERED that Respondent must create certain records and retain each 

such record for 5 years. Specifically, Respondent must create and retain the following records: 

A. Accounting records showing the revenues from all goods or services sold; 

B. Personnel records showing, for each person providing services, whether as an employee 

or otherwise, that person’s: name; addresses; telephone numbers; job title or position; 

dates of service; and (if applicable) the reason for termination;

C. Records of all consumer complaints concerning the subject matter of the Order, including 

complaints involving representations covered by Parts I or II of the Order, whether 

received directly or indirectly, such as through a third party, and any response; 

D. A copy of each unique advertisement or other marketing material making a representation 

subject to this Order; 

E. For 5 years from the date of the last dissemination of any representation covered by this 

Order:

1. All materials that were relied upon in making the representation; and 

2. All tests, analyses, research, studies, or other evidence in Respondent’s 

possession, custody, or control that contradicts, qualifies, or otherwise calls into 

question the representation, or the basis relied upon for the representation, including 

complaints and other communications with consumers or with governmental or 

consumer protection organizations; and 

F. All records necessary to demonstrate full compliance with each provision of this Order, 

including all submissions to the Commission.
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VIII. Compliance Monitoring

IT IS FURTHER ORDERED that, for the purpose of monitoring Respondent’s compliance 

with this Order:

A. Within 10 days of receipt of a written request from a representative of the Commission, 

Respondent must submit additional compliance reports or other requested information, 

which must be sworn under penalty of perjury, and produce records for inspection and 

copying.

B. For matters concerning this Order, representatives of the Commission are authorized to 

communicate directly with Respondent. Respondent must permit representatives of the 

Commission to interview anyone affiliated with Respondent who has agreed to such an

interview. The interviewee may have counsel present.

C. The Commission may use all other lawful means, including posing through its 

representatives as consumers, suppliers, or other individuals or entities, to Respondent or 

any individual or entity affiliated with Respondent, without the necessity of identification 

or prior notice. Nothing in this Order limits the Commission’s lawful use of compulsory 

process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.

IX. Order Effective Dates

IT IS FURTHER ORDERED that this Order is final and effective upon the date of its 

publication on the Commission’s website (ftc.gov) as a final order. This Order will terminate 20 

years from the date of its issuance (which is stated at the end of this Order, next to the 

Commission’s seal), or 20 years from the most recent date that the United States or the 

Commission files a complaint (with or without an accompanying settlement) in federal court 

alleging any violation of this Order, whichever comes later; provided, however, that the filing of 

such a complaint will not affect the duration of:

A. Any provision in this Order that terminates in less than 20 years;

B. This Order’s application to any Respondent that is not named as a defendant in such 

complaint; and

C. This Order if such complaint is filed after the Order has terminated pursuant to this 

provision. 
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If such complaint is dismissed or a federal court rules that the Respondent did not violate any 

provision of the Order, and the dismissal or ruling is either not appealed or upheld on appeal, 

then the Order will terminate according to this provision as though the complaint had never been 

filed, except that the Order will not terminate between 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.

By the Commission.

Donald S. Clark

Secretary

SEAL:

ISSUED:
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Attachment A: Notice to Dealers and Distributors

[on Respondent letterhead]

[insert date]

IMPORTANT NOTICE ABOUT COLORHOUSE

ADVERTISING AND MARKETING MATERIALS

[insert addressee name]

[insert addressee address used in the ordinary course of business]

Dear Dealer or Distributor,

In response to a complaint from the Federal Trade Commission, YOLO Colorhouse, LLC has 

agreed to qualify its claims that its paints contain zero VOCs (volatile organic compounds) or 

other harmful emissions, to ensure that retailers and dealers avoid misleading consumers. We 

request that you immediately replace existing Colorhouse advertising and marketing materials 

with revised versions which include these qualifications. We have included appropriate 

materials for this purpose to affix to each can of Colorhouse paint in your possession. Enclosed 

are illustrations of how to properly place the stickers. 

The requirement to affix stickers is only needed if you currently have our product in your 

inventory. Please note that you will not have to add any stickers to any paint ordered or shipped 

after the date of this letter. 

We will make revised marketing materials available to you shortly. Should you have any 

questions about compliance with this notice, please contact [insert contact person]. In addition, 

you can obtain further information about the settlement by visiting www.ftc.gov and searching 

for “YOLO Colorhouse.”

Sincerely,

[name]

[title]