Tender Corporation

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IN THE MATTER OF TENDER CORPORATION CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATIONS OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket No. C-4261; File No. 082 3188 Complaint, July 13, 2009 - Decision, July 13, 2009 This consent order addresses Tender Corporation’s marketing and sale of “Fresh Bath” brand moist hand and body wipes. The complaint alleges that respondent violated Section 5 of the FTC Act by making false and misleading representations that its products and packaging were "biodegradable," when in fact, customary disposal methods do not allow for respondent's products or packaging to break down completely and return to nature. The complaint further alleges that respondent failed to substantiate its "biodegradable" claim. The consent order prohibits respondent from engaging in similar acts and practices by prohibiting respondent from making representations its products are biodegradable or environmentally beneficial unless substantiated by competent and reliable scientific evidence. Additionally, the order requires respondent to specify whether its biodegradability claim applies to the product, package, or components and to keep copies of relevant advertisements and their materials substantiating the claim.

Participants For the Commission: Michael J. Davis and Laura Schneider. For the Respondents: Rebecca Dandeker and Lawrence Lanpher, K&L Gates.

COMPLAINT The Federal Trade Commission, having reason to believe that Tender Corporation (“respondent”), has violated provisions of the Federal Trade Commission Act, 15 U.S.C. § 41 et seq., and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent Tender Corporation is a Delaware corporation with its principal office or place of business at 106 Burndy Road, Littleton, New Hampshire 03561.

TENDER CORPORATION 31 Complaint 2. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act. 3. Respondent advertises, labels, offers for sale, sells, and/or distributes goods under the brand name Fresh Bath to the public throughout the United States, including Fresh Bath Wipes and Fresh Bath Travel Wipes. Respondent advertises and offers these goods for sale through its Internet site www.adventuremedicalkits.com and through its catalog. Respondent also advertises, offers for sale, sells, or distributes these goods to retailers throughout the United States. 4. To induce consumers and retailers to purchase Fresh Bath Wipes and Fresh Bath Travel Wipes, respondent disseminates, has disseminated, or has caused to be disseminated advertisements, including product labeling and other promotional materials, including but not limited to the attached Exhibit A. In these advertisements, respondent prominently states or has stated that Fresh Bath Wipes and Fresh Bath Travel Wipes and/or the packaging for Fresh Bath Wipes and Fresh Bath Travel Wipes are “bio-degradeable.” Respondent does not define, describe, or qualify such biodegradability, and placement of the term “biodegradable” on the packaging does not make clear whether this purported benefit refers to the product, its packaging, or a portion or component of the product or packaging. 5. Approximately 91 percent of total municipal solid waste in the United States is disposed of in either landfills, incinerators, or recycling facilities. These disposal methods do not present conditions that would allow for either Fresh Bath Wipes or Fresh Bath Travel Wipes or their packaging to completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time. VIOLATIONS OF SECTION 5 OF THE FTC ACT FALSE OR MISLEADING REPRESENTATIONS 6. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that: VOLUME 148 Complaint a. Fresh Bath Wipes and Fresh Bath Travel Wipes will completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time after customary disposal; and b. The packaging of Fresh Bath Wipes and Fresh Bath Travel Wipes will completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time after customary disposal.

7. In truth and in fact:

a. Fresh Bath Wipes and Fresh Bath Travel Wipes will not completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time after customary disposal because a substantial majority of total municipal solid waste is disposed of by methods that do not present conditions that would allow for Fresh Bath Wipes and Fresh Bath Travel Wipes to completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time; and b. The packaging of Fresh Bath Wipes and Fresh Bath Travel Wipes will not completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time after customary disposal because a substantial majority of total municipal solid waste is disposed of by methods that do not present conditions that would allow for the packaging of Fresh Bath Wipes and Fresh Bath Travel Wipes to completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time.

8. Therefore, the representations set forth in Paragraph 6 were, and are, false or misleading.

TENDER CORPORATION 33 Complaint UNSUBSTANTIATED REPRESENTATIONS 9. Through the means described in Paragraph 4, respondent has represented, expressly or by implication, that it possessed and relied upon a reasonable basis that substantiated the representations set forth in Paragraph 6, at the time the representations were made.

10. In truth and in fact, respondent did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 6 at the time the representations were made. 11. Therefore, the representation set forth in Paragraph 9 was, and is, false or misleading.

12. The acts and practices of respondent as alleged in this complaint constitute deceptive acts or practices, in or affecting commerce, in violation of Section 5(a) of the Federal Trade Commission Act.

THEREFORE, the Federal Trade Commission, on this thirteenth day of July, 2009, has issued this complaint against respondent.

By the Commission.

VOLUME 148 Complaint Exhibit A TENDER CORPORATION 35 Complaint 0, oR pce = zZ4 lo) 16) VOLUME 148 Decision and Order DECISION AND ORDER The Federal Trade Commission (“Commission”) having initiated an investigation of certain acts and practices of the Respondent named in the caption hereof, and the Respondent having been furnished thereafter with a copy of a draft complaint that the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge the Respondent with violation of the Federal Trade Commission Act, 15 U.S.C. § 45 et seq.; and The Respondent and counsel for the Commission having thereafter executed an agreement containing a consent order (“consent agreement”), an admission by the Respondent of all the jurisdictional facts set forth in the aforesaid draft complaint, a statement that the signing of said consent agreement is for settlement purposes only and does not constitute an admission by the Respondent that the law has been violated as alleged in the complaint, or that any of the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and The Commission having thereafter considered the matter and having determined that it has reason to believe that the Respondent has violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such consent agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, 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 Tender Corporation is a Delaware corporation with its principal office or place of business at 106 Burndy Road, Littleton, New Hampshire 03561.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondent, and the proceeding is in the public interest.

TENDER CORPORATION 37 Decision and Order ORDER DEFINITIONS For purposes of this order, the following definitions shall apply:

A. Unless otherwise specified, “Respondent” shall mean Tender Corporation and its successors and assigns and its officers, agents, representatives, and employees. B. “Clearly and prominently” shall mean as follows: 1. In an advertisement communicated through an electronic medium (such as television, video, radio, and interactive media such as the Internet and online services), the disclosure shall be presented simultaneously in both the audio and video portions of the advertisement. Provided, however, that in any advertisement presented solely through video or audio means, the disclosure may be made through the same means in which the ad is presented. The audio disclosure shall be delivered in a volume and cadence sufficient for an ordinary consumer to hear and comprehend it. The video disclosure shall be of a size and shade, and shall appear on the screen for a duration, sufficient for an ordinary consumer to read and comprehend it. In addition to the foregoing, in interactive media the disclosure shall also be unavoidable and shall be presented prior to the consumer incurring any financial obligation;

2. In a print advertisement, promotional material, or instructional manual, the disclosure shall be in a type size and location sufficiently noticeable for an ordinary consumer to read and comprehend it, in print that contrasts with the background against which it appears. In a catalog, the disclosure shall appear on the same page as each representation; VOLUME 148 Decision and Order 3. On a product label, the disclosure shall be in a type size and location on the principal display panel sufficiently noticeable for an ordinary consumer to read and comprehend it, in print that contrasts with the background against which it appears; and 4. Regardless of the medium, the disclosure shall be in understandable language and syntax. Nothing contrary to, inconsistent with, or in mitigation of the disclosure shall be used in any advertisement, promotional material, instructional manual, package, or label.

C. For any representation, a disclosure elsewhere shall be deemed to be “in close proximity” to such representation if there is a clear and conspicuous crossreference to the disclosure. The use of an asterisk or other symbol shall not constitute a clear and conspicuous cross-reference. A cross-reference shall be deemed clear and conspicuous if it is of sufficient prominence to be readily noticeable and readable by an ordinary consumer when examining the part of the advertisement, promotional material, instructional manual, package, or label on which the representation appears.

D. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44. E. “Competent and reliable scientific evidence” shall mean tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

F. “Is degradable, biodegradable, or photodegradable” shall mean that the entire product or package will completely decompose into elements found in nature within a reasonably short period of time after customary disposal.

TENDER CORPORATION 39 Decision and Order G. “Product or package” means any towel or wipe, including but not limited to antibacterial, cleaning, lotion, sunblock, or repellent wipe, or any similar product, or any package containing such product, that is (a) offered for sale, sold, or distributed by respondent, under the brand name Fresh Bath, Tender, Adventure Medical Kits, or any other brand name of respondent; or (b) sold or distributed by third parties under private labeling agreements with respondent. I.

IT IS ORDERED that respondent, directly or through any corporation, partnership, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product or package, in or affecting commerce, shall not represent, in any manner, expressly or by implication:

A. That any such product or package is degradable, biodegradable, or photodegradable, unless the representation is true, not misleading, and, at the time it is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation; or B. That any such product or package offers any other environmental benefit, unless the representation is true, not misleading, and, at the time it is made, respondent possesses and relies upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation.

II.

IT IS FURTHER ORDERED that respondent, directly or through any corporation, partnership, subsidiary, division, or other device, in connection with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any product or package, in or affecting commerce, shall not make any representation, in any manner, expressly or by implication VOLUME 148 Decision and Order concerning whether such product or package is degradable, biodegradable, or photodegradable, unless: A. The representation applies to the entire product and entire package; or B. Respondent discloses clearly, prominently, and in close proximity to such representation, whether such representation refers to the entire product, the entire package, or a portion or component of the product or package.

III.

IT IS FURTHER ORDERED that respondent Tender Corporation, and its successors and assigns, shall, for five (5) years after the last date of dissemination of any representation covered by this order, maintain and upon request make available to the Commission for inspection and copying: A. All advertisements, labeling, packaging and promotional materials containing the representation; B. All materials that were relied upon in disseminating the representation;

C. All tests, reports, studies, surveys, demonstrations, or other evidence in its possession or control that contradict, qualify, or call 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 D. All acknowledgments of receipt of this order, obtained pursuant to Part IV.

IV.

IT IS FURTHER ORDERED that for a period of five (5) years after the date of issuance of this order, respondent Tender Corporation, and its successors and assigns, shall deliver a copy TENDER CORPORATION 41 Decision and Order of this order to: (1) all current and future principals, officers, and directors; and (2) all current and future managers who have responsibilities with respect to the subject matter of this order. Respondent shall secure from each such person a signed and dated statement acknowledging receipt of the order, with any electronic signatures complying with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq. Respondent shall deliver this order to such current personnel within thirty (30) days after the date of service of this order, and to future personnel within thirty (30) days after the person assumes such position or responsibilities. V.

IT IS FURTHER ORDERED that respondent Tender Corporation, and its successors and assigns, shall notify the Commission at least thirty (30) days prior to any change with regard to Tender Corporation or any business entity that respondent directly or indirectly controls, or has an ownership interest in, that may affect compliance obligations arising under this order, including but not limited to formation of a new business entity; a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor entity; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the business or corporate name or address. Provided, however, that, with respect to any proposed change about which respondent learns less than thirty (30) days prior to the date such action is to take place, respondent shall notify the Commission as soon as is practicable after obtaining such knowledge. All notices required by this Part shall be sent by certified mail to the Associate Director, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

VI.

IT IS FURTHER ORDERED that respondent Tender Corporation, and its successors and assigns, shall, within sixty (60) days after the date of service of this order file with the Commission a true and accurate report, in writing, setting forth in detail the manner and form in which respondent has complied VOLUME 148 Decision and Order with this order. Within ten (10) days of receipt of written notice from a representative of the Commission, respondent shall submit additional true and accurate written reports. VII.

This order will terminate on July 13, 2029, or twenty (20) years from the most recent date that the United States or the Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: A. Any Part in this order that terminates in less than twenty (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 Part.

Provided, further, that 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 Part 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.

TENDER CORPORATION 43 Analysis to Aid Public Comment ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, an agreement containing a consent order from Tender Corporation, a corporation (“respondent”).

The proposed consent order has been placed on the public record for thirty (30) days for reception of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement or make final the agreement’s proposed order.

This matter involves Tender’s marketing and sale of Fresh Bath brand moist hand and body wipes, packaged in plastic that prominently states “bio-degradeable” without qualification on the front of the package. Tender’s website and promotional materials also made the claim. According to the FTC complaint, respondent represented that Fresh Bath Wipes and Fresh Bath Travel Wipes and their packages will completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time after customary disposal. The complaint alleges respondent’s biodegradable claim is false because a substantial majority of total household waste is disposed of either in landfills, incinerators, or recycling facilities and these customary disposal methods do not present conditions that would allow for the wipes and their packaging to completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time. The complaint further alleges that respondent failed to have substantiation for the biodegradable claim. The proposed consent order contains provisions designed to prevent respondent from engaging in similar acts and practices in the future. Part I.A of the proposed order prohibits respondent from making a representation that certain of its products are degradable unless the representation is true, not misleading, and substantiated by competent and reliable scientific evidence. Part I.B prohibits respondent from making any other environmental benefit claim VOLUME 148 Analysis to Aid Public Comment about such products, unless at the time the representation is made, it is truthful and not misleading, and substantiated by competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence.

Part II of the proposed order requires respondent to specify whether its degradability claim applies to the product, package, or components of either.

Parts III through VI require respondent to keep copies of relevant advertisements and materials substantiating claims made in the advertisements; to provide copies of the order to certain of their personnel; to notify the Commission of changes in corporate structure that might affect compliance obligations under the order; and to file compliance reports with the Commission and respond to other requests from FTC staff. Part VII provides that the order will terminate after twenty (20) years under certain circumstances. The purpose of this analysis is to facilitate public comment on the proposed order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.

KMART CORPORATION 45 Complaint