Exhart Environmental Systems, Inc

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IN THE MATTER OF EXHART ENVIRONMENTAL SYSTEMS, INC., ET AL. CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3384. Complaint, June 2, 1992--Decision, June 2, 1992 This consent order prohibits, among other things, a California-based company and its owners from representing that their electronic devices can eliminate, reduce the number of, or prevent the reentry of rodents unless they can substantiate such representations, and also prohibits them from stating that the devices are EPA-approved or waterproof, if that is not the case. In addition, the agreement requires the respondents to send a letter to all catalogue companies with which they have done business since January 1, 1990, informing them of the requirements of the order.

Appearances For the Commission: Eileen Harrington and David M. Torok. For the respondents: Ronald Gold, Murphy & Gold, Calabasas, CA.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, as amended, 15 U.S.C. 45 et seq., and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Exhart Environmental Systems, Inc. ("Exhart"), a corporation, and Isaac Weiser and Margaret Weiser, individually and as officers of said corporation (hereinafter collectively referred to as respondents), have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges as follows:

Complaint 115 F.T.C.

PARAGRAPH 1. Respondent Exhart Environmental Systems, Inc. is a California corporation with its office and principal place of business at 21525 Strathern Street, Canoga Park, California. PAR. 2. Respondents Isaac Weiser and Margaret Weiser are officers of Exhart. At all times relevant to this complaint, both Isaac Weiser and Margaret Weiser formulated, directed and controlled the business acts and practices of Exhart. Their business address is the same as that of respondent Exhart.

PAR. 3. Respondents are now and for some time in the past have been engaged in the promotion, manufacture, distribution, marketing, advertising and sale of various rodent control devices known as Go'pher5 1 3 3 4 2 841 1261 57 41 74.919159 It, Go'pher5 1 3 3 4 4 1096 1261 28 35 95.347755 It5 1 3 3 4 5 1135 1261 60 41 86.511215 IT, Molex or Gopher5 1 3 3 4 9 1610 1262 143 35 86.374329 Buster (hereinafter referred to as products), These products are purported to repel rodents from a specified area and prevent them from reappearing. PAR. 4. In the course and conduct of their business, respondents cause, and in the past have caused, said products to be transported from their place of business for sale to purchasers located in various states and territories of the United States and the District of Columbia. Respondents maintain, and at all times mentioned herein have maintained, a substantial course of trade in said products in or affecting commerce, as commerce is defined in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. 44. PAR. 5. In the further course and conduct of their business, respondents have at all times mentioned herein made numerous statements in writing, in various product packaging materials, instruction sheets and promotional materials prepared and/or disseminated by respondents for use in selling respondents’ products. Illustrative and typical, but not inclusive, of the statements employed as aforesaid are the following:

(a) {A]n5 1 4 1 1 3 930 2371 136 30 96.863152 effective5 1 4 1 1 4 1085 2379 98 21 96.990944 means5 1 4 1 1 5 1202 2376 29 24 96.988998 to5 1 4 1 1 6 1249 2370 43 30 96.925720 rid5 1 4 1 1 7 1309 2371 47 29 97.009674 thes 1 4 1 1 8 1374 2370 68 38 96.946030 yards 1 4 1 1 9 1461 2371 54 28 96.407509 ands 1 4 1 1 10 1534 2371 106 37 96.339668 gardens 1 4 1 1 11 1658 2370 34 29 96.466446 of5 1 4 1 1 12 1708 2370 141 39 96.619278 Gophers,5 1 4 1 1 13 1870 2370 118 29 96.129303 Ground4 1 4 1 2 0 654 2420 742 39 -1 5 1 4 1 2 1 654 2422 150 37 96.720802 Squirrels,5 1 4 1 2 2 817 2422 97 27 96.766548 Moles5 1 4 1 2 3 926 2421 55 28 96.850365 ands 1 4 1 2 4 993 2421 80 28 96.771988 others 1 4 1 2 5 1083 2420 163 37 96.282738 burrowing5 1 4 1 2 6 1258 2420 138 29 89.377274 rodents. (b) When5 1 4 2 1 3 938 2477 101 37 96.826050 placed5 1 4 2 1 4 1051 2477 28 28 96.826050 in5 1 4 2 1 5 1090 2477 46 28 96.911270 thes 1 4 2 1 6 1147 2476 118 37 95.636292 ground,5 1 4 2 1 7 1277 2476 45 29 95.636292 thes 1 4 2 1 8 1334 2476 150 29 97.005020 electronics 1 4 2 1 9 1497 2476 76 28 96.962250 stakes 1 4 2 1 10 1586 2476 120 29 97.001747 vibrates5 1 4 2 1 11 1718 2476 55 28 95.866203 ands 1 4 2 1 12 1784 2476 83 28 95.866203 emits5 1 4 2 1 13 1879 2485 16 19 96.991989 a5 1 4 2 1 14 1907 2476 81 28 96.937286 noise4 1 4 2 2 0 654 2524 1334 39 -1 5 1 4 2 2 1 654 2527 29 29 96.630821 in5 1 4 2 2 2 701 2527 33 28 96.926582 155 1 4 2 2 3 751 2526 108 29 96.401161 seconds 1 4 2 2 4 874 2525 133 29 96.198196 intervals5 1 4 2 2 5 1021 2525 119 38 96.764297 causing5 1 4 2 2 6 1155 2525 200 37 96.192215 underground5 1 4 2 2 7 1369 2525 130 29 96.465340 dwellers5 1 4 2 2 8 1514 2524 99 39 96.998375 within5 1 4 2 2 9 1627 2533 16 20 96.947586 a5 1 4 2 2 10 1657 2524 91 30 94.971878 40-505 1 4 2 2 11 1762 2524 31 29 96.849678 ft.5 1 4 2 2 12 1809 2524 137 29 96.493546 diameters 1 4 2 2 13 1960 2530 28 23 96.493546 to4 1 4 2 3 0 653 2573 82 29 -1 5 1 4 2 3 1 653 2573 82 29 88.899208 free. (c) Proven5 1 4 3 1 3 956 2629 137 27 96.509575 effective5 1 4 3 1 4 1105 2628 110 37 96.426384 against5 1 4 3 1 5 1226 2628 162 36 95.986191 burrowing5 1 4 3 1 6 1400 2628 114 28 95.986191 rodents5 1 4 3 1 7 1525 2627 46 29 96.885605 for5 1 4 3 1 8 1582 2636 37 28 96.885605 up5 1 4 3 1 9 1630 2632 30 24 96.941467 to5 1 4 3 1 10 1672 2636 16 20 96.854881 a5 1 4 3 1 11 1699 2628 38 28 96.830818 505 1 4 3 1 12 1749 2628 62 28 96.986496 foot5 1 4 3 1 13 1822 2628 161 28 87.830132 diameter. (d) Not5 1 4 4 1 3 909 2686 68 36 96.253746 only5 1 4 4 1 4 989 2686 99 36 96.962029 expels5 1 4 4 1 5 1100 2686 123 36 96.839943 existing5 1 4 4 1 6 1235 2685 175 37 96.969582 population,5 1 4 4 1 7 1423 2686 49 27 96.951126 but5 1 4 4 1 8 1484 2686 87 35 96.813873 keeps5 1 4 4 1 9 1583 2694 63 19 97.004906 news 1 4 4 1 10 1659 2693 70 20 96.967735 ones5 1 4 4 1 11 1741 2686 73 27 96.262314 out. (e) Keeps 1 5 1 1 3 930 2743 164 37 95.969353 burrowing5 1 5 1 1 4 1105 2744 115 28 96.244148 rodents5 1 5 1 1 5 1232 2748 49 23 96.921059 outs 1 5 1 1 6 1292 2743 33 28 96.861168 of5 1 5 1 1 7 1334 2752 72 27 96.697067 yours 1 5 1 1 8 1417 2743 68 36 96.734062 yards 1 5 1 1 9 1497 2743 54 28 96.541672 ands 1 5 1 1 10 1564 2743 105 36 96.729828 gardens 1 5 1 1 11 1681 2743 136 28 95.137192 forever. EXHART ENVIRONMENTAL SYSTEMS, INC., ET AL. 615 613 Complaint (f) Covers5 1 3 1 1 3 858 655 35 19 92.756767 an5 1 3 1 1 4 905 655 64 19 92.756767 areas 1 3 1 1 5 980 656 39 27 93.109673 up5 1 3 1 1 6 1030 651 28 23 96.421204 to5 1 3 1 1 7 1074 647 54 28 96.328484 1005 1 3 1 1 8 1140 647 58 28 94.312538 feet5 1 3 1 1 9 1209 647 28 28 96.990776 in5 1 3 1 1 10 1249 647 162 30 96.511612 diameter. PAR. 6. Through the use of the statements referred to in paragraph five, and others contained in product packaging and promotional materials, instruction sheets and advertisements not specifically set forth herein, respondents have represented, directly or by implication, that the products:

(a) Are an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents generally; (b) Are an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents in a given area; and (c) Are an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents for a given time period. PAR. 7. Through the use of the statements and representations referred to in paragraphs five and six, and others not expressly set out therein, respondents have represented, directly or by implication, that at the time they made the statements and representations in paragraphs five and six, they possessed and relied upon a reasonable basis for those statements and representations. PAR. 8. In truth and in fact, at the time respondents made such statements and representations, they did not possess and rely upon a reasonable basis for them. Therefore, the representation set forth in paragraph seven was, and is, false and misleading. PAR. 9. In the further course and conduct of their business, respondents have, at all times mentioned herein, disseminated and caused to be disseminated advertisements and promotional materials for their products in which respondents have represented that their products were E.P.A.5 1 6 3 5 4 995 2325 199 46 95.946754 approved and waterproof. PAR. 10. In truth and in fact, respondents' products were not E.P.A. approved and were not waterproof. Therefore, the representations set forth in paragraph nine were, and are, false and misleading. PAR. 11. The aforesaid acts and practices of respondents, as herein alleged, were and are all to the prejudice and injury of the public and constituted, and now constitute, deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, as amended, 15 U.S.C. 45. Decision and Order 115 F.T.C.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter with a copy of a draft of complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act; and The respondents, their attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Exhart Environmental Systems, Inc. is a California corporation with its office and principal place of business located at 21525 Strathern Street, in the City of Canoga Park, State of California.

2. Respondents Isaac Weiser and Margaret Weiser are officers of Exhart Environmental Systems, Inc. Both Isaac Weiser and Margaret Weiser formulate, direct and control the policies, acts and practices of said corporation, and their principal office and place of business is located at the above stated address.

EXHART ENVIRONMENTAL SYSTEMS, INC., ET AL. 617 613 Decision and Order 3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER For the purposes of this order, the following definition shall apply:

Rodents 1 6 1 1 2 793 1148 142 36 96.341568 controls 1 6 1 1 3 949 1148 142 36 93.995117 device means the Go'pher5 1 6 1 1 7 1509 1150 58 40 85.490906 It, Go'pher5 1 6 1 1 9 1775 1151 29 34 96.881386 It5 1 6 1 1 10 1818 1150 61 41 74.188866 II, Molex, Gopher5 1 6 1 2 3 925 1207 145 35 94.386917 Buster or any other substantially similar device or implement intended to repel, mitigate, control, or eliminate rodents.

It is ordered, That respondents Exhart Environmental Systems Inc., a corporation, its successors and assigns and its officers: Isaac Weiser and Margaret Weiser, individually and as officers of said corporation; and respondents’ agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, marketing, offering for sale, sale or distribution of any rodent contro] device in or affecting commerce, as commerce is defined in Section 4 of the Federal Trade Commission Act, as amended, do forthwith cease and desist from making any representation, directly or by implication, that any such rodent control device:

(1) Is an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents generally; (2) Is an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents in a given area; or (3) Is an effective or proven means to eliminate, reduce the - number of, or prevent the reentry of rodents for a given time period, unless, at the time of making such representation, respondents possess and rely upon competent and reliable scientific evidence that substantiates the representation. For purposes of this order, for any Decision and Order 115 F.T.C.

experiment, analysis, research, study, survey, or other evidence to be deemed competent5 1 3 1 2 3 1053 683 67 36 97.003365 ands 1 3 1 2 4 1132 683 174 42 85.352310 reliable, it shall be conducted and evaluated in an objective manner by persons recognized according to professional standards as being qualified to do so, using procedures generally accepted by others in the profession to yield accurate and reliable results.

II.

It is further ordered, That respondents Exhart Environmental Systems, Inc., a corporation, its successors and assigns and its officers: Isaac Weiser and Margaret Weiser, individually and as officers of said corporation; and respondents’ agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, marketing, offering for sale, sale or distribution of any rodent control device in or affecting commerce, as commerce is defined in Section 4 of the Federal Trade Commission Act, as amended, do forthwith cease and desist from misrepresenting in any manner, directly or by implication, that any such rodent control device (1) is waterproof; or (2) is approved by the Environmental Protection Agency. II.

It is further ordered, That respondents Exhart Environmental Systems, Inc., a corporation, its successors and assigns and its officers; Isaac Weiser and Margaret Weiser, individually and as officers of said corporation; and respondents’ agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, marketing, offering for sale, sale or distribution of any rodent control device or any other pest control device in or affecting commerce, as commerce is defined in Section 4 of the Federal Trade Commission Act, as amended, do forthwith cease and desist from representing in any manner, directly or by implication, any performance characteristic relating to the ability of such product to eliminate, reduce the number of, or prevent the reentry of rodents or any other pests unless, at the time of making such representation, respondents possess and EXHART ENVIRONMENTAL SYSTEMS, INC., ET AL. 619 613 Decision and Order rely upon competent and reliable evidence that substantiates the representation. For purposes of this order, for any experiment, analysis, research, study, survey, or other evidence to be deemed competent5 1 3 1 4 2 801 805 69 35 96.850471 ands 1 3 1 4 3 885 804 177 41 94.746178 reliable, it shall be conducted and evaluated in an objective manner by persons recognized according to professional standards as being qualified to do so, using procedures generally accepted by others in the profession to yield accurate and reliable results.

IV.

It is further ordered, That respondents Exhart Environmental Systems, Inc., Isaac Weiser and Margaret Weiser shall distribute a copy of this order to each present and future officer, agent, representative and employee having sales, advertising or policy making responsibilities for any rodent control device, and shall secure from each such individual a signed statement acknowledging receipt of this order.

V.

It is further ordered, That respondents Exhart Environmental Systems, Inc., Isaac Weiser and Margaret Weiser shall, within seven days after the date of service of this order, send to each catalogue company with which they have done business since January 1, 1990, a copy of Appendix A to this order.

VI.

It is further ordered, That respondents Exhart Environmental Systems, Inc., its successors and assigns, Isaac Weiser, and Margaret Weiser shall maintain for three (3) years following the date of the last dissemination of each representation, and upon request shall make available to the Federal Trade Commission for inspection and copying:

A. All materials relied upon to substantiate any representation covered by this order; and Decision and Order 115 F.T.C.

B. All experiment results, test reports, studies, surveys or other evidence in their possession or control that contradict, qualify or call into question such representation or the basis upon which respondents relied for such representation.

VIL.

It is further ordered, That respondents Exhart Environmental Systems, Inc., its successors and assigns, Isaac Weiser, and Margaret Weiser shall maintain for three (3) years after the date this order becomes final, and upon request shall make available to the Federal Trade Commission for inspection and copying, documents demonstrating compliance with the requirements of Part V of this order including, but not limited to, copies of all notices sent to catalogue companies.

VIII.

It is further ordered, That respondents Isaac Weiser and Margaret Weiser shall, for a period of ten (10) years after the date this order becomes final, promptly notify the Commission of any discontinuance of their present business or employment and of their affiliation with any new business or employment whose activities or responsibilities include the advertising, marketing, offering for sale, sale or distribution of rodent control devices or pest control devices. Such notice shall include their new business address and a statement of the nature of the business or employment in which they are newly engaged as well as a description of their duties and responsibilities in connection with that business or employment. IX.

It is further ordered, That respondents Exhart Environmental Systems, Inc., its successors and assigns, Isaac Weiser, and Margaret Weiser shall notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change EXHART ENVIRONMENTAL SYSTEMS, INC., ET AL. 621 613 Decision and Order in the corporation which may affect compliance obligations arising out of the order.

X.

It is further ordered, That respondents Exhart Environmental Systems, Inc., Isaac Weiser, and Margaret Weiser shall, within ninety (90) days after the date this order becomes final, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with this order. Decision and Order 115 F.T.C.

APPENDIX A [To Be Printed on Exhart Letterhead] Dear [name of catalogue company]:

Exhart Environmental Systems, Inc. ("Exhart") has entered into a consent agreement with the Federal Trade Commission ("FTC") to stop making certain representations about the effectiveness of the Go'pher It and similar rodent control devices unless at the time of making such representation we have competent and reliable scientific evidence that substantiates the representation. According to the FTC complaint, Exhart does not possess substantiating evidence for the following representations:

(1) That the Go'pher It, Go'pher It I], Molex or Gopher Buster (hereinafter referred to as devices) are an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents generally; (2) That these devices are an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents in a given area; (3) That these devices are an effective or proven means to eliminate, reduce the number of, or prevent the reentry of rodents for a given time period. The FTC also has alleged that representations that these devices are waterproof or are approved by the Environmental Protection Agency are false and misleading. The devices covered by this agreement include the Go'pher It, Go'pher It II, Molex or Gopher Buster. Exhart previously has supplied you with promotional materials or advertising copy that make the above representations. You should cease using or relying on these materials as the basis for your own advertising unless and until we have provided you with substantiation or have provided new materials or advertising copy that comply with the consent agreement. You should also be aware that the FTC has taken the position that these representations are deceptive and misleading and that their continued dissemination may be a violation of the FTC Act.

Sincerely, Isaac Weiser, President Exhart Environmental Systems, Inc.

HAROLD A. HONICKMAN, ET AL. 623 623 Amending Order