$40 Million in Contempt Sanctions for False Advertising of Weight Loss Supplements in Violation of Injunction Affirmed

The 11th Circuit upheld a district court’s granting of $40 million in contempt sanctions against Hi-Tech Pharmaceuticals and other co-defendants for making unsubstantiated marketing statements on four weight loss supplements in violation of an injunction obtained by the Federal Trade Commission. The $40 million figure represents the amount of gross revenue from the four products.

“The ink had hardly dried on filings from the first injunction case when the defendants started a new marketing campaign in 2009. This time, they touted the fat- and weight-loss benefits of four products—a reformulated version of Lipodrene, Fastin, Benzedrine, and Stimerex-ES. For example, advertisements for Lipodrene warned users not to consume the product unless ‘fat loss and weight loss are your intended result’; advertisements for Fastin boasted that it was an ‘Extreme Fat Burner’; those for Benzedrine claimed that it would ‘annihilate . . . fat’; and advertisements for Stimerex-ES told users that this was a product ‘for those who want their fat-burner to light them up all day as their pounds melt away.'”

The full opinion is available here.

Judge orders co-founder of Puls Technologies Inc. to appear for deposition in fraud lawsuit

Itai Hirsch, co-founder and President of Puls, faces lawsuit alleging he defrauded an early-stage shareholder out of equity. Trial is set for September.

I am glad Itai Hirsch will finally be deposed. So far, Puls Technologies has been very dodgy in this case, which may be why they are on their third set of lawyers.”

— Attorney Robert Tauler

SAN DIEGO, CALIF., USA, July 22, 2019 /EINPresswire.com/ — Puls Technologies Inc. co-founder and President Itai Hirsch was ordered to appear for deposition next month as a civil lawsuit accusing him and the company of fraud heads towards a Sept. 6 trial.

“I am glad Itai Hirsch will finally be deposed,” Attorney Robert Tauler said. “So far, Puls Technologies has been very dodgy in this case, which may be why they are on their third set of lawyers.”

Puls and Hirsch are accused of defrauding an early-stage shareholder out of millions of dollars, equivalent to a 5 percent stake in the company, according to the lawsuit, filed in October 2017 in San Diego County Superior Court.

San Diego Superior Court Judge Gregory Pollack on July 12 ordered Hirsch to appear and to provide a sworn affidavit as to the whereabouts of co-founder and former CEO Eyal Ronen, who Puls’ Technologies’ counsel argued had moved to Israel less than two months before trial. The move comes after Puls Technologies in late June announced the appointment of new CEO Mitch Galbraith. 

Puls Technologies also shuffled its legal counsel after the ruling, making this the third AmLaw 200 firm to represent Puls during the pendency of the lawsuit. “It is rare that a corporate client like Puls Technologies switches lawyers during a case of this importance, but it is even more rare to switch twice,” Tauler said. 

The lawsuit alleges that Hirsch held secret funding talks with Sequoia Capital Israel Ltd. that were not disclosed to the plaintiff. The fraud claim alleges that the plaintiff was dismissed from the company under false pretenses just weeks before Puls (then known as Cellsavers and based in San Diego) publicly announced $3 million in funding in December 2015. Altogether, Puls has now raised over $90 million in funding — thus dramatically increasing the value of the plaintiff’s stock, according to the lawsuit.

Hirsch kept the funding deal under wraps so that he could keep the plaintiff’s promised equity for himself and his new investors, while taking advantage of the plaintiff’s work — which was crucial in justifying the start-up’s valuation, the lawsuit alleges. (San Diego Superior Court case number: 37-2017-00041466-CU-BC-CTL)

Puls provides in-home repair and installation for electronic devices and smart homes, like a Lyft for technicians. Last year it was named one of LinkedIn’s top start-ups to watch.

Read the press release at EIN Newsdesk.

House Fire Prompts $1 Million Dispute With Airbnb

Eight Airbnb guests were staying in the three-story house that overlooked the Sonoma Valley. Fortunately, all eight escaped the flames unharmed. Minutes after they made it out, the burning house came crashing down.

The Sonoma Valley Fire and Rescue fire marshal’s report on the incident notes non-code electric work near a wooden outdoor deck. Investigators also noted two of the Airbnb renters admitted they were smoking on that deck, about an hour before the fire started:

– It was possible that one of them threw cigarette butts over the deck railing or dropped some on [the] deck.

Ultimately, the fire’s cause was declared “undetermined” by the fire marshal. But no matter what ignited the flames, the house was a total loss.

The $1 million question

After the fire, the homeowners obtained a contractor’s estimate to rebuild. The estimate: $1.8 million.

The homeowners — who are remaining anonymous — told NBC Bay Area they received a $600,000 payment from their property insurance provider, but not the $1 million they were counting on from Airbnb. Its “Host Guarantee” offers homeowners “Property damage protection of up to $1 million for every host and every listing—at no additional cost.”

Consumer attorney Robert Tauler says promises like the Airbnb Host Guarantee aren’t always easy to redeem.

“They don’t just write checks for a million bucks without kicking the tires, for sure,” Tauler said.

Tauler specializes in holding tech companies accountable for their advertising. He says simple assurances spelled out on an app look easy, but putting those promises into practice — like after a fire — might meet resistance.

“Frequently, their acts are inconsistent with their words,” Tauler said. “That’s a real serious problem.”

Click here to read the full article and view the segment aired on NBC Bay Area.

Appellate court upholds multimillion-dollar verdict for collagen supplement inventor

Jury ruled that NeoCell Corp. officers conspired to dissolve the majority partner’s shares in
the Irvine supplement company’s manufacturing arm.

RIVERSIDE, Calif., April 8, 2019 — A jury’s $5.4 million verdict against an Irvine, Calif.
skincare company for trying to cheat a business partner was unanimously upheld by a
three-justice panel of the California Court of Appeal in a decision released on April 5.
Inventor Ahmad Alkayali sued NeoCell Corp. and his former business partners in 2013 after
they dissolved his 72% equity share in a collagen supplement factory without paying him or
even informing him of the move.

“I am very pleased the Court of Appeal reached the right decision and upheld the jury
verdict in all respects,” said Attorney Robert Tauler, of Los Angeles commercial litigation
firm Tauler Smith LLP. Tauler obtained the verdict in late 2015 after 14 days of trial
spanning three months. “It has been a long and difficult road to obtain this result, but the
Court’s detailed opinion makes this all the more gratifying.”

The justices upheld the Riverside County jury’s 2015 decision to award Alkayali $4.26
million in economic damages and $500,000 for emotional distress, plus $185,000 in punitive
damages against Akram Quadri, one of his former business partners.

The dispute centered around collagen supplement manufacturer Healthwise Nutraceuticals,
Inc., and sister company NeoCell, which marketed and sold the products. Alkayali owned
most of Healthwise, and the defendants owned Neocell and 28% of Healthwise. Following a
lawsuit over NeoCell, which Alkayali founded and sold, the defendants colluded to dissolve
Healthwise and transfer its assets to NeoCell without informing or compensating Alkayali.
The trial court reduced the jury verdict after trial, in portions of the final judgment that were
not part of the appeal.

The appellants unsuccessfully argued that the final judgment was not supported by
substantial evidence in various respects, including the eventual amount of damages
awarded. “We disagree with (Appellant’s) characterization of the state of the evidence,”
Justice Marsha G. Slough wrote in the April 5 decision. Justice Douglas P. Miller and Justice
Carol D. Codrington concurred.

Tauler Smith Successfully Defends Real Estate Developer in Seven Day Jury Trial

Firm Attorneys Robert Tauler and Dillon Millar successfully defended a real estate holding corporation and several individual defendants after a seven day jury trial in Los Angeles Superior Court, obtaining dismissal of 23 claims, including fraud and breach of fiduciary duty, in litigation that spanned close to three years.

The dispute arose in 2016 regarding loan agreements obtained for a property development in Los Angeles. Judge Elizabeth White presided over the seven day jury trial, dismissing claims during trial by granting Defendants’ motion for nonsuit, as well as dismissing Plaintiffs’ claim for attorneys fees.

“I could not be more pleased with our preparation and performance” said lead trial attorney Robert Tauler, “we really gave it everything we had, and I am glad things went our way.”

After submitting their case, the parties were able to resolve their remaining claims prior to receiving a final judgment, forestalling future litigation and culminating in dismissal.

Tauler Smith’s Valerie Saryan named Top 40 Young Lawyer by NAOWIL

Valerie Saryan has been selected as a Top 40 Young Lawyer in Business Law by the National Alliance of Women in Law.

Saryan’s practice focuses on commercial litigation and she specializes in transactional law, fashion law, and false advertising. Saryan is a graduate of Whittier College School of Law and received her Bachelor’s degree in Political Science from Tufts University in Massachusetts. She joined Tauler Smith LLP in 2016.

“I am proud to see Ms. Saryan’s hard work get recognized at such an early stage in her career,” said Robert Tauler, of Tauler Smith LLP.

NAOWIL honors the best women lawyers in the country as part of their mission to advance the position of women in the legal profession.

Click here to read the full press release on EIN.

Nomad Management Loses Key Rulings Against Industry Model Group in Trade Secrets Lawsuit

A Los Angeles Superior Court judge has ruled that a lawsuit will proceed against Co-founder and Director of Nomad Model Management LA and former employees of Industry Model Group for misappropriation of trade secrets, breach of contract and unfair competition, and that countersuits against Industry will be dismissed, in a series of rulings handed down against Nomad Model Management. A similar judgement also took place in New York City, where Nomad Model Management’s motion to dismiss was denied and Industry Model Group’s cross-motion to discontinue the action without prejudice in order to pursue the California Action was granted.

Click here to read the full article.

Coco Rocha loses modeling agency battle

Coco Rocha has gotten herself caught in the middle of a model war.

The cover girl, who took a management and ownership stake in Nomad Mgmt two years ago, just lost a battle with Federico Pignatelli, the owner of Industry Model Group and Pier59 Studios. Pignatelli sued Nomad after Giovanni Bernardi left Industry’s Los Angeles office after just six months to help create Nomad Los Angeles.

“It is clear that Bernardi only took the position at Industry to obtain trade secrets, confidential information, employees and resources for his own venture,” Pignatelli’s lawyer Robert Tauler wrote in an LA Superior Court suit.

Click here to view full article on Page Six.

Doping experts contradict some of Clemson’s theories on drug test results

Medical experts this week cast doubt on some of the theories laid out by Clemson as to how three football players, including star defensive tackle Dexter Lawrence, tested positive for the banned substance ostarine prior to the College Football Playoff.

In a press conference before the Cotton Bowl last month, Clemson coach Dabo Swinney said the drug could have come from any source. The players were ruled ineligible for the Tigers’ Cotton Bowl matchup with Notre Dame and the national championship game, which Clemson won in a one-sided victory over Alabama.

Click here to read the full article on The Post and Couriers.