Business ProfileforAmerican Screening, LLC

On Aug 4, 2020, the Federal Trade Commission filed an action in the United States District Court, Eastern District of Missouri, against American Screening, LLC, a Louisiana limited liability company; Ron Kilgarlin Jr. and Shawn Kilgarlin, both individually and as officers of American Screening, LLC to obtain permanent injunctive relief, restitution, rescission or reformation of contracts, the refund of money or return of property, the payment of damages, and other equitable relief for Defendants' acts or practices in violation of Unfair or Deceptive Acts or Practices of the FTC Act 15 and in violation of the Mail, Internet, or Telephone Order Merchandise Rule (MITOR).

According to the FTC, the defendants created shipping labels shortly after an order was received, but didn't actually ship products for weeks or even months. Under the Mail Order Rule, at the time sellers solicit an order, they must have a reasonable basis they will be able to ship: 1) within the stated time; or 2) if no time is stated, within 30 days. If a shipment is delayed, the Rule lays out sequential if-then steps sellers must take to ensure buyers aren't left in the lurch. One key consumer protection built into the Rule is that if sellers can't ship within the required time, they must send a shipping delay notice that offers the buyer a choice either to consent to wait or to cancel the order and get a prompt refund.

Online retailer American Screening marketed hand sanitizer, masks, gowns, and PPE in bulk to hospitals, nursing homes, and local governments, as well as to individual consumers. The defendants promised on their website that items were "in stock" and would be shipped "within 24-48 hours." But according to the complaint, in many instances, the defendants didn't ship until weeks later. They also failed to follow the procedures in the Mail Order Rule for delayed shipments. In granting the FTC's summary judgment motion, the Court ruled that American Screening and its owners didn't have a reasonable basis for their shipment promises, didn't give customers the consent-or-refund option the Mail Order Rule requires, and didn't give "prompt refunds." Citing "The egregious nature of Defendants' conduct," the Court concluded that injunctive relief was warranted and appropriate. The order also included a $14.6 million financial remedy. The FTC will use the money collected to provide consumer refunds.

Read more at https://www.ftc.gov/business-guidance/blog/2022/08/two-decisions-highlight-mail-order-rule-compliance-during-pandemic-beyond

U.S. Judge Ronnie L. White of the Eastern District of Missouri on April 6, 2022, granted the FTC’s motion for summary judgment in all respects except the amount of equitable monetary relief to be paid by the retailer, American Screening LLC, for customer restitution.  In a May 9 status report, the parties reported to the court that they were unable to reach an agreement as to the amount of monetary damages to be paid.  Upon the FTC’s motion for reconsideration, Judge White on July 14 granted the original summary judgment motion in all respects and ordered the sum of $14,651,185.42 to be placed in escrow to satisfy customer refund requests. 


Judge White concluded that there was no dispute as to the $14,651,185.42 sought by the FTC as the appropriate amount of monetary relief.  Noting that some of the retailer’s customers may have been satisfied with their orders even if delayed, Judge White ordered that the FTC implement a plan that required customers to make refund requests rather than receiving the funds outright.  Customers were to submit refund requests directly to the FTC and the FTC was to return to American any of the funds that remained unclaimed, less the FTC’s costs in administering the program, no later than 120 days after customers were notified of the refund program, Judge White stated.

Judge White also ordered all defendants — the retailer, its founder and CEO Ron Kilgarlin Jr. and its quality manager and quality management representative, Shawn Kilgarlin — permanently enjoined from advertising or selling protective goods and services and allowed the FTC to establish compliance monitoring, concluding that such sanctions were warranted by the defendants’ “egregious conduct.”  Judge White stated that the relief granted would not unduly harm the defendants or put them out of business, but rather would ensure further compliance with the FTC Act. 

Judge White filed his final order and judgment for permanent injunction and monetary relief on Jan. 31, 2023.