A false advertising lawsuit filed against an international sports supplement company based in Sacramento eventually caught international media attention, and the Sacramento Business Journal is covering all the major developments.
“This case is emblematic of the profound dysfunction in the nutritional supplement marketplace,” Robert Tauler told the Business Journal. “Low barriers to entry, high rewards and intermittent regulatory enforcement create perverse incentives for manufacturers and retailers.”
The Sacramento Business Journal has written several stories about the litigation and other interesting developments in this case.
Read the stories here (subscription may be required):
- Sacramento supplement company’s false advertising claims pose danger to consumer health and safety
- Supplements company facing lawsuit suggests patrons could harass opposing counsel
- CEO of Enhanced Athlete arrested for alleged probation violations
- Bodybuilding supplement company says its facility was raided by FDA
- ‘Dr. Huge’ allegedly connected to supplement facilities raided in Europe
Former Sacramento-based bankruptcy lawyer Anthony “Dr. Tony Huge” Hughes and convicted fraudster Scott E. Cavell joined forces this year to form Enhanced Athlete Inc., which sells controversial bodybuilding supplements.
Continue reading the story on Sacramento Business Journal (subscription may be required).
Law360, New York (January 4, 2017, 11:29 AM EST) — Few parents would knowingly let their teenager buy a month’s cycle of anabolic steroids. But what if they’re just buying a container of “BroPower” — a fictional name for a real product which bills itself as “intended for use by hardcore athletes who are trying to gain extreme size and strength?”
Anyone with $89.99, plus shipping, gets a one-month supply to boost muscle mass, libido and “aggression in the gym.” The active ingredients include methylsten, listed as “a powerful strength builder, which does not aromatize into…
Continue reading the story on Law360 (subscription may be required).
Robert Tauler, managing partner of law firm Tauler Smith LLP, has been named Westside Bar Association’s “Attorney of the Year” for 2016. The Westside Bar Association serves the greater Los Angeles area by connecting young attorneys through continuing education courses and mixers, according to its website.
“I am honored to receive this recognition from my peers, and hope to drive our firm and clientele to future success,” said Tauler, a Los Angeles trial attorney specializing in civil trials. The award comes on the heels of a $10 million dollar jury verdict obtained on behalf of a client against a nutritional supplement manufacturer.
The Westside Bar Association Attorney of Year Award is given to attorneys that have have achieved exceptional results for their clients early in their careers. The award reception will be held at the Sofitel Hotel in Beverly Hills on August 24, 2016. You may RSVP at info(at)westsidebarassociation(dot)com
The U.S. District Court will allow claims against supplement maker Custom Nutraceuticals LLC (“Custom”), JRM Nutrasciences and Jason Mancuso dba DNA Pharma proceed after denying defendants’ Motion to Dismiss in a ruling published on July 8. Custom was sued by competitor Nutrition Distribution in federal court on January 26, 2016 (Case 2:16-cv-00173-DGC). According to the First Amended Complaint, Defendants marketed the SARM “Ostarine” as “NOT FOR HUMAN CONSUMPTION” while simultaneously advertising and selling its product as a new miracle body building drug.”
Plaintiff Nutrition distribution alleged in Court papers that Defendants’ ability to market the bodybuilding drug Ostarine without disclosing its harmful side effects or disclosing that international anti-doping groups have banned the product had a harmful effect on the marketplace and potentially to individual consumers. Plaintiff, who sells its own line of bodybuilding supplements, further alleged “users of [Ostarine] have little incentive to use a natural product.”
Defendants filed a motion to dismiss claiming that the lawsuit should be dismissed or stayed due to the “primary jurisdiction doctrine” which provides that certain matters involving nutritional supplement regulations be under the exclusive purview of the Food and Drug Administration (“FDA”).
The Court rejected Defendants’ theory, holding that “the Court need not consult the FDA to determine whether it is false and misleading to label a product as ‘not for human consumption’ while touting the benefits of such consumption…. Nor does the Court require the FDA’s expertise to determine whether it is false and misleading to market a product to competitive athletes while neglecting to mention that it has been banned by the World Anti-Doping Agency and the U.S. Anti-Doping Agency.” (Opinion at 3:13-16,23-26). The Court continued its analysis by observing “Plaintiff’s theories do not require the Court to determine whether Ostarine is a drug or whether Defendants’ sale of Ostarine violated the FDCA [“Food, Drug, and Cosmetic Act”]. Even if Defendants are lawfully marketing Ostarine as a nutritional supplement, their statements about the product may still be false and misleading.” (Opinion, 4:25-5:3).
LOS ANGELES, CA – 12/18/2015 (PRESS RELEASE JET) — Commercial litigation firm Tauler Smith LLP obtained a $10.2 million jury verdict on behalf of plaintiff Ahmad Alkayali against Neocell Corporation, a nutritional supplement company, and its officers and directors (“Defendants”). The dispute centered on the one-time manufacturer for Neocell Corporation, a company called Healthwise Nutraceuticals, Inc. Defendants conspired to dissolve Healthwise and transfer its assets to NeoCell without informing or compensating Mr. Alkayali, despite his 72 percent interest in the company.
Mr. Alkayali was awarded $9.5 million in economic and non-economic damages in connection with claims of conversion and breach of fiduciary duty, as well as punitive damages amounting to $685,000.
“We are very happy that the jury awarded Mr. Alkayali the value of his interest in Healthwise, as well as emotional distress and punitive damages,” said lead attorney Robert Tauler, founding partner of Tauler Smith. “It was a very hard-fought and emotional month-long trial and the verdict is vindication for our efforts.”
The verdict underscores a slew of recent litigation involving nutritional supplements. Tauler Smith has pursued several bodybuilding supplement companies for false advertising and unfair competition related to ingredients in their products.
Healthwise and Neocell were sister companies in adjoining rental space. Healthwise manufactured the supplements, while Neocell marketed and sold the supplements. Litigation concerning the ownership of NeoCell began in October 2008, during which Mr. Alkayali’s ownership right to NeoCell was extinguished and an injunction was issued barring him from entering the NeoCell premises, which was next door to the Healthwise facility. Although Mr. Alkayali was unable to manage the day-to-day affairs of Healthwise, he maintained his equity stake in the business. In August 2010, the defendants held a meeting where they dissolved Healthwise and transferred its assets to NeoCell, knowing that Mr. Alkayali would be unable to attend.
Four Tauler Smith attorneys were recently named to the 2015 Southern California Super Lawyers list of “Rising Stars,” a legal industry recognition only given to 2.5% of all lawyers in Los Angeles. Firm Attorneys Robert Tauler, Gil Peles, Bryan Lazarski and Daniel Forouzan were given the honor.
Rising Star recognition is given to attorneys who are either 40 years old or younger or have been in practice for 10 years or less, and have attained high degrees of peer recognition and professional achievement.
On June 8, 2015, the U.S. Supreme Court granted certiorari in the case of Madrigal-Barcenas v. Lynch(“Madrigal”), vacated the underlying decision of the Ninth Circuit Court of Appeals, and remanded the case for further consideration in light of the recent June 1, 2015 decision in the similar case of Mellouli v. Lynch (“Mellouli”). Petitioner Madrigal-Barcenas can now return to the Ninth Circuit to seek a favorable disposition of his case based on the U.S. Supreme Court’s opinion in Mellouli.
Tauler Smith partner Matt Smith, while at his former firm McDermott Will & Emery, was part of the team advocating on behalf of Mr. Madrigal-Barcenas. The outcome of these Supreme Court rulings significantly advanced the due process protections for immigrants facing deportation or removal proceedings following very minor convictions under state law.
Mr. Madrigal-Barcenas, a 35-year-old citizen of Mexico, has lived as an immigrant in the United States for over fifteen years. He supports his four young children (three of whom are U.S. citizens), his father (a U.S. citizen), and his mother (a legal permanent resident). During his first ten years in the United States, Mr. Madrigal-Barcenas remained free of any criminal convictions or arrests. But in January 2008, Mr. Madrigal-Barcenas was arrested and pleaded guilty to possession of drug paraphernalia, a misdemeanor under Nevada law. The “drug paraphernalia” Mr. Madrigal-Barcenas was charged with possessing was a glass pipe with “burnt residue,” but the charge and conviction did not specifically identify a controlled substance.
As a result of his conviction, the government initiated removal proceedings in an effort to send Mr. Madrigal-Barcenas back to Mexico. Mr. Madrigal-Barcenas fought to cancel the removal proceedings on the basis that his absence would cause hardship to his four young children and his aging parents. The government, however, argued that Mr. Madrigal-Barcenas’ misdemeanor drug paraphernalia conviction rendered him ineligible to seek cancellation of removal. The assigned Immigration Judge (IJ) agreed with the government, and the Board of Immigration Appeals (BIA) subsequently affirmed the IJ’s finding. When Mr. Madrigal-Barcenas initiated proceedings pro per in the Ninth Circuit Court of Appeals, McDermott was asked to handle the appeal through the court’s pro bono program.
After briefing and argument, the Ninth Circuit affirmed the BIA’s decision and concluded that Mr. Madrigal-Barcenas was ineligible for cancellation of removal. McDermott then filed a petition for writ of certiorari before the U.S. Supreme Court, arguing that under the plain text of Section 1182 of the Immigration and Nationality Act (INA), a drug paraphernalia conviction does not render a noncitizen ineligible for cancellation of removal unless it explicitly relates to a controlled substance listed in the federal Controlled Substances Act (CSA) – which Mr. Madrigal-Barcenas’ did not.
After McDermott filed its petition, the U.S. Supreme Court granted certiorari in Mellouli, an Eighth Circuit case that presented a similar statutory interpretation question under Section 1182, and held Madrigal in abeyance. Armed with the background legal research from theMadrigal case, McDermott’s pro bono team then filed an amicus brief in support of Mr. Mellouli as counsel for Heartland Alliance’s National Immigrant Justice Center (NIJC) and American Immigration Lawyers Association (AILA).
On June 1, 2015, the U.S. Supreme Court held, consistent with McDermott’s argument, that “to trigger removal under [the INA], the Government must connect an element of the alien’s conviction to a drug defined in [the CSA].” (Slip. Op. at 14.) In its opinion, the Court favorably cited the amicus brief McDermott filed on behalf of NIJC and AILA, which noted the differences in drug paraphernalia criminalization statutes on a state-by-state basis.
A week later, the Court granted certiorari in Mr. Madrigal-Barcenas’ case, vacating the Ninth Circuit’s decision and remanding with instructions to consider the decision in Mellouli. The McDermott team will now return to the Ninth Circuit and seek to persuade that court that Mr. Madrigal-Barcenas should be permitted to remain with his family in the United States.
Tauler Smith LLP won its fourth case in the last 12 months after Plaintiff BCG Attorney Search voluntarily dismissed its case with prejudice against firm client Lateral Link Group. The Complaint sought damages for unfair competition and interference with contractual relations. The voluntary dismissal came on the heels of the service of a motion for sanctions, asserting that Plaintiff’s complaint was frivolous and seeking attorneys fees and disciplinary charges.