1
2 3
4
CIRCUIT COURT FOR THE STATE OF OREGON
5
COUNTY OF MARION
6
IN THE MATTER OF:
7
COOLEST, LLC
8
and
9
RYAN GREPPER,
10
ASSURANCE OF VOLUNTARY COMPLIANCE
Respondents.
11
12 13 14
1.
Respondents Coolest LLC and Ryan Grepper are doing or have recently done business in Oregon as Coolest LLC.
15
This case stems from a Kickstarter (crowd funding) campaign launched in 2014 by
16
Portland-based inventor Ryan Grepper to promote his concept for a 60-quart cooler on wheels,
17
with a built-in heavy-duty blender, USB charger, and waterproof speakers.
18
dubbed "Coolest Cooler." Kickstarter backers who pledged $185 plus $15 for shipping reached
19
a reward tier that earned them a cooler if Grepper was able to turn his prototype into a product
20
that could be shipped to backers. Grepper was successful in manufacturing and bringing the
21
product to the marketplace, and as of the g of this document, he had fulfilled his
22
commitment to 38,979 of the 60,439 confirmed backers who funded the Kickstarter campaign.
23
The product was
2.
24
This Assurance of Voluntary Compliance ("AVC") is a settlement of a disputed matter
25
between Respondents and the Oregon Department of Justice (DOJ) acting pursuant to ORS
26
646.632, relating to specific representations (for shipping/delivery dates) made to Kickstarter
Page 1 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE
DM #8323370vl
OREGON DEPARTMENT OI<' JUSTICE 1162 Court Street NE Salem, OR 97301-4096 (503) 934-4400 I FAX: (503) 378-5017
1
backers in post-campaign updates by Ryan Grepper, regarding delivery of the product to
2
backers. This AVC does not resolve or in any manner waive, discharge, release or otherwise
3
limit investigation and litigation (private or public) relating to any other type of representation
4
that was, is, or may in the future be made by Respondents about the Coolest Cooler and the
5
financial backing therefor.
6
3.
7
This A VC shall not be considered an ission of a violation for any purpose, and
8
Respondents expressly deny having engaged in any unlawful or otherwise inappropriate
9
business practices. Respondents enter into this AVC for the sole purpose of resolving DOJ's
10
concerns. Respondents and DOJ agree that no provision of this AVC operates as a penalty,
11
forfeiture, or punishment under the Constitution of the United States and the Constitution of the
12
State of Oregon, or under any other provision of law.
13
14 15
4.
Respondents waive notice from the State of Oregon of the alleged unlawful trade practices. See ORS 646.632(2) ORS 646.607(2), ORS 646.632(3), (8).
5.
16 17
Respondents understand and agree that this AVC creates t and several liability in its
18
applicability to the individual and corporate Respondents, Respondents' principals, officers,
19
directors, agents including independent contractors, employees, representatives, successors and
20
assigns, tly and severally, while ading personally, or through any corporation or other
21
business entities, whose acts, practices or policies are directed, formulated or controlled by
22
Ryan Grepper.
23
6.
24
Respondents agree and understand that following acceptance of the AVC by DOJ, DOJ
25
may communicate directly with Respondents for the purpose of executing and enforcing the
26
of this af:,rreement, resolving future complaints, and conducting undercover investigations
Page 2 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl mmGoN DEPARTMENT OF JUSTICE 1162 Court Street NE Salem, OR 97301-4096 (503) 934-4400 I FAX: (503) 378-5017
1
of Respondents to the extent permitted by law and by the Oregon Rules of Professional
2
Responsibility. However, neither this paragraph nor any other language contained in this AVC
3
is intended in any manner to be a waiver of Respondents' right to seek the advice and assistance
4
of counsel at any time or to direct DOJ to communicate with Respondents through specified
5
counsel at any time.
6 7
7. Respondents understand and agree that if this AVC is accepted by DOJ, it will be held
8
by DOJ.
9
determination by DOJ that Respondents have failed to comply with any of the AVC,
10
whether willful or not, DOJ shall promptly notify Respondents and Respondents' Oregon
11
counsel of record in writing of such circumstances and Respondents shall have ten (10) business
12
days from receipt of such written notice to provide a good faith written response to DOJ's
13
inquiry. If DOJ detennines that a violation has occurred and remains uncured, DOJ may submit
14
this AVC to the Circuit Court of the State of Oregon for Marion County for approval. If
15
approved, this AVC will be filed with the court pursuant to ORS 646.632(2).
However, if DOJ becomes aware of circumstances which could result in a
16
8.
17
Respondents agree to accept service of a conformed or court certified copy of the AVC
18
by prepaid first class mail sent to the addresses following Respondents' signatures, or to
19
Respondents' attorney.
20
9.
21
If the shipments ordered to be made and/or monies which are ordered to be paid in this
22
AVC are not timely made and/or paid, DOJ may convert the AVC to a money judgment under
23
ORS 646.632(2) that includes all monetary values associated with the obligations set forth in
24
paragraphs 14 & 15, below (i.e., number of coolers selected by eligible but unfulfilled backers
25
multiplied by $20, plus $50,000). Respondents agree that a copy of the money judgment may
26 Page 3 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE
DM #8323370vl
OREGON DEPARTMENT 01< JUSTICE
1162 Court Street NE Salem, OR 97301-4096 (503) 934-4400 I FAX: (503) 378-5017
1
be sent to Respondents, and to Respondents' Oregon counsel, by first class mail to the address
2
following their respective signatures below. 10.
3
4
Respondents understand that, in addition to any other sanctions which may be imposed
5
under this AVC or under the law, a willful violation (as defined by ORS 646.605(10)) of any of
6
the of this AVC may result in contempt of court proceedings, civil penalties of up to
7
$25,000 for each violation, and such further relief as the court may deem appropriate. ORS
8
646.632(4); ORS 646.642(1); ORS 646.642(2).
9
11.
10
The parties acknowledge that no other promises, representations, or agreements of any
11
nature have been made or entered into by the parties. The parties further acknowledge that this
12
AVC constitutes a single and entire agreement that is not severable or divisible, except that if
13
any provision herein is found to be legally insufficient or unenforceable, the remaining
14
provisions shall continue in full force and effect.
15
REMEDIES
16
12.
17 18
Respondents shall obey Oregon's Unlawful Trade Practices Act, ORS 646.605 to ORS 646.656.
19
13.
20
Respondents shall not represent or imply that DOJ or any other governmental unit of the
21
State of Oregon acquiesces or approves of Respondents' past business practices, current efforts
22
to reform its practices, or any future practices which Respondents may adopt or consider
23
adopting, DOJ's decision to settle this matter or to otherwise unilaterally limit current or future
24
enforcement action does not constitute approval or imply authorization for any past, present, or
25
future business practice.
26 Page 4of8 -ASSURANCE O:F VOLUNTARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT OF JUSTICE 1162 Court Street NE Salem, OR 97301-4096 (503) 934-4400 IF AX: (503) 378-5017
1
14. Effective immediately upon execution of this AVC by Respondents, Respondents agree
2 3
4
that: (A)
Within 120 days from the g of this agreement, Respondents shall ship
5
coolers and accessories to all eligible backers who filed complaints with the Oregon Department
6
of Justice on or before April 15, 2017. A backer is "eligible" ifs/he provided funding at the
7
$185 level, has completed Respondents' shipping survey, has confirmed a mailing address by
8
responding to Respondents' request for confirmation, and has not received all coolers and/or
9
accessories (battery pack, Bluetooth speakers, pitcher & plates,.blenders and drink guide menu)
10
that the backer selected and paid for. As of the g of this document, the number of eligible
11
backers who filed DOJ complaints against Coolest on or before April 15, 2017, stands at 392.
12
(B)
Within 120 days from the g of this agreement, Respondents shall also ship
13
coolers and/or accessories to all eligible backers who were residents of Oregon but did not file a
14
complaint with the Oregon Department of Justice, subject to these backers confirming a mailing
15
address. As of the g of this document, the number of eligible backers in this category
16
stands at 481.
17
(C)
For the 21,021 backers who did not file a complaint with the Oregon DOJ by
18
April 15, 2017 and are not residents of Oregon, but are otherwise "eligible" as defined in
19
subsection (A), immediately above, Coolest shall immediately (as of the g of this AVC)
20
begin placing in a Backer Fund a minimum of 10% of net income from Coolest Cooler sales,
21
and shall use said Fund to manufacture and ship coolers and accessories at cost to this category
22
of backers (hereinafter referred to as Group C), over the next 3 years. At the close of each fiscal
23
quarter, Respondents shall submit Coolesi's financials to an outside ing firm to
24
determine net income from sales of Coolest Coolers during the quarter that just closed. On a
25
quarterly basis, Respondents shall provide DOJ access to its financials, the status of the Backer
26
Fund, and its progress in shipping coolers and accessories to eligible backers.
Page 5of8 ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl OREGONDEPARTMENTOF.JUSTJCF: 1162 Court Street NE Salem, OR 97301-4096 (503) 934-4400 I FAX: (503) 378-5017
1
(D)
At the end of 3 years (i.e., on June 6, 2020), Respondents shall pay any backer in
2
Group C who has not yet received their cooler(s) $20 per cooler selected by the backer. This
3
:financial obligation shall not be subject to discharge in bankruptcy. Also at the 3-year mark,
4
Respondents shall provide to DOJ information for the 21,021 backers in Group C, an
5
ing for said backers, and proof of the $20-per-cooler payments made to each Group C
6
backer. DOJ may file and convert this AVC to a General Judgment Money Judgment which
7
will be entered for the amount of any unmade payments (at $20 x the number of coolers
8
selected by the unfulfilled backers in Group C).
9
(E)
Any unfulfilled backer who has not yet completed Respondents' shipping survey
10
must complete the shipping survey, including a current shipping address, by December 31,
11
2019, to be included in Group C. If an unfulfilled backer does not complete a shipping survey,
12
including a current mailing address, by December 31, 2019, then the backer is not eligible under
13
Group C. If a backer fails to complete a shipping survey due to a change of email address (and
14
corresponding failure to receive the survey), and subsequently s either Respondents or
15
DOJ with a confirmation of mailing address by December 31, 2019, that backer shall be eligible
16
under Group C.
17
(F)
No reward-based crowdfunding may be utilized by Respondents unless and until
18
the backers in this case are fulfilled. Respondents are not prohibited from seeking investors and
19
engaging in (with or without remuneration) educational activities, mentoring, or advising other
20
individuals who are seeking crowdfunding for their own projects.
21
15.
22
PAYMENT TO THE STATE
23
In addition to the consumer restitution specified above, Respondents shall pay the sum
24
of $50,000 (fifty thousand dollars) to DOJ for deposit in the Oregon Department of Justice
25
Consumer Protection and Education established pursuant to ORS 180.095, to be used
26 Page 6 of 8 - ASSURANCE OF VOLUNTARY COMPLIANCE DM #8323370vl OREGON DEPARTMENT OF JUSTICE 1162 Court Street NE Salem, OR 97301-4096 (503) 934-4400 I FAX: (503) 378-5017
1
by DOJ as provided by law. However, DOJ agrees to suspend the full amount of $50,000
2
provided that Respondents comply with each and every term and condition of this AVC.
3 4
APPROVED AS TO FORM
5
6 7
DATE
8
9 10
11 RESPONDENTS' SIGNATURES AND ACKNOWLEDGMENT
12
I, Ryan Grepper, being duly sworn on oath depose and say that I am the CEO of Coolest 13
LLC.
In this capacity, I am fully authorized and empowered to sign this Assurance of
14 Voluntary Compliance on behalf of myself and those Respondents, and to bind the same to the
15 hereof. I have read, understand, and agree to each and every term of this Assurance of
16 Voluntary Compliance. 17 OFFICIAL STAMP
18
MARIAN MOJ'iAMED NOTARY PUBLIC-OREGON COMMISSION NO. 957763 MY COMMISSION EXPIRES JANUARY 08, 2021
19 20
PMTlPtOIV ,
01t
21 22 SUBSCRIBED AND SWORN to before me this 23
a
day ofJune, 2017.
24 25
26 Page 7 of 8 - ASSURANCE OF VO LUNT ARY COMPLIANCE
DM #8323370vl
OREGON DEPARTMENT OF JUSTICE 1162 Court Street NE Salem, OR 97301-4096 (503) 934-4400 I FAX: (503) 378-5017
ct 7 Zl.'f
1
2
ACCEPTANCE BY DOJ
3
4
I '7 /~,
Accepted this / ,)
day of June, 2017.
5 ELLEN F. ROSENBLUM Attorney General
6
/////~' ,,
7
. / .f'I~ ,
8
LUCILLE SAGE,£)· B #903790 Senior Assistant Attorney General Oregon Department of Justice Of Attorneys for Plaintiff 1162 Court Street NE Salem, OR 97301-4096 Phone: (503) 934-4400 Fax: (503) 378-5017 Email:
[email protected]
9 10 11 12 13 14 15
APPROVAL BY COURT 16 17 APPROVED FOR FILING and SO ORDERED 18 19 20
Marion County Circuit Court Judge
21
22 23 24 25 26 Page 8 of 8 -ASSURANCE OF VOLUNTARY COMPLIANCE
DM #8323370vl
OREGON DEPARTMENT OF.JUSTICE 1162 Court Street NE Salem, OR 9730 l-4096 (503) 934-4400 IF AX: (503) 378-5017