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.

Fraud Case Against Puls Technologies Headed to Trial

Multimillion-dollar startup and founder Itai Hirsch alleged to have defrauded early shareholder; plaintiff seeks to subpoena future investors

It is important that early stage employees who are promised equity obtain full discovery of what was told to future investors about them…”

— Attorney Robert Tauler

A San Diego Superior Court judge indicated at a Nov. 30 hearing that subpoenas to investors in Puls Technologies would likely go forward in a case dealing with alleged early stage fraud. The underlying lawsuit accuses Puls Technologies Inc., of San Francisco, and its CEO Itai Hirsch of defrauding an early-stage shareholder out of millions of dollars, equivalent to a 5 percent stake in the company. The court also recently ruled that the lawsuit would go to trial, denying Puls’ and Hirch’s attempt at summary judgment.

Court papers allege that Hirsch was holding secret funding talks with Sequoia CapitaI 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) announced $3 million in funding in December 2015, the lawsuit states. Altogether, Puls has now raised over $90 million in funding, with $50 million just this year coming from multiple sources, including Samsung and Temasek, a holding company owned by the government of Singapore — thus dramatically increasing the value of the plaintiff’s stock, according to the claim.

“It is important that early stage employees who are promised equity obtain full discovery of what was told to future investors about them,” said Robert Tauler, the plaintiff’s Los Angeles attorney. “A lot of startups are financed in the shadows, and individuals who claim they are owed equity are entitled to know about all deals that impact their investment.”

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. Though a gamble, work-for-stock deals are not an unusual arrangement in the start-up world, with the potential of owning a valuable equity stake in a successful company.

“We are not sure at this time what Plaintiff’s stock is worth today, because valuations in start ups tend to fluctuate,” said Tauler, of Tauler Smith LLP. “Experts will be engaged to make this determination.”

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

About Tauler Smith LLP
Tauler Smith LLP specializes in high-stakes commercial litigation representing both plaintiffs and defendants in a variety of areas, including business disputes, false advertising, the foreign corrupt practices act, and unfair competition.

Robert Frank
Newsroom Public Relations
+1 206-790-6324
robert@newsroompr.com

Tauler Smith prevails on Summary Judgment against IronMag Labs and Robert DiMaggio

Robert DiMaggio permanently enjoined from selling SARMs

In an eight page Order on Summary Judgment, Judge Manuel Real of the United States District Court for the Central District of California has ruled in favor of firm client Nutrition Distribution, LLC, ordering that Defendants IronMagLabs and Robert DiMaggio be permanently enjoined from selling SARMs.

“[I]t is indisputable that Defendants have made false statements regarding whether products containing Ostarine have side effects” read the Order, because “DiMaggio himself admitted at his deposition that Ostarine does have side effects, and the FDA has identified Ostarine and other SARMs as potentially dangerous to public health and safety.” The Court further found that “common sense requires a finding that statements denying the existence of negative health effects in a fitness product have a tendency to deceive a substantial segment of interested consumers.”

“We are very pleased that the Court has taken a firm stance on the legality of SARMs” said Robert Tauler, counsel of record for Nutrition Distribution, “the Court has put an end to DiMaggio’s sale of SARMs and has effectively ruled that the sale of such products is illegal.”

The Court’s Order ended by clearly stating “Defendants are permanently enjoined from

falsely advertising OSTA RX, Super DMZ 4.0, and other supplements containing Ostarine or other SARMs.”

“We look forward to the next phase, which will include briefing on Plaintiff obtaining an award of attorney’s fees,” said Tauler. “We will also be conducting more discovery into other companies DiMaggio sells SARMs to enforce this Order,” adding “it is important that companies putting profits over consumer safety pay the price.”

Judge: Lawsuits will proceed against retailers accused of selling illicit Viagra pills

SANTA MONICA, CALIF., USA, October 13, 2018 /EINPresswire.com/ — A superior court judge has allowed a lawsuit against a group of Santa Monica convenience stores allegedly selling supplements laced with prescription and unapproved drugs to proceed by denying a Chevron gas station’s defense motion to dismiss the case.

The ruling by Santa Monica Superior Court Judge Gerald Rosenberg on Oct. 20 means the owners have 20 days to respond to lawsuits accusing them of engaging in unfair competition and false advertising by selling falsely-labeled “all natural” and “safe” male enhancement pills. The Rhino-brand ingredient labels do not list their inclusion of sildenafil – the active ingredient in Viagra.

The local lawsuits only address the stores’ civil violations, though the sale of prescription drugs by anyone other than a licensed pharmacist is prohibited under state and federal regulatory laws.

“The judge’s decision should make it crystal clear that retailers selling this potentially deadly drug face civil liability for putting people’s lives in danger,” said Robert Tauler, a principal at Tauler Smith LLP, in Los Angeles and a nationally-recognized expert in adulterated health supplements and false advertising law.

Using Viagra without a doctor’s supervision can result in serious penile injuries (blood clots and amputation, for instance,) heart attacks, stroke and vision problems. Men have died after taking Viagra-laced “all natural” erectile dysfunction pills like those identified in the suit.

Tauler represents Houston-based Outlaw Laboratory LP, which makes competing natural products that meet strict FDA dietary supplement regulations. Federal law allows competitors to sue retailers for false advertising if products contain secret ingredients. The products named in the lawsuit do not disclose the presence of hidden drugs such as sildenafil, tadalafil and dapoxetine on their labels.

C. Kerry Fields, University of Southern California business ethics and product liability expert, told the Santa Monica Mirror in June that businesses selling products containing secret ingredients put themselves in serious legal peril. “There may be a good margin selling those products but it’s not worth the risk because they are representing to the public that their goods are safe… Consumers might sue them as well…,” Fields told the Mirror.

 

Read the full press release on EINNews.com.

Ruling favors Nutrition Distribution in false advertising claim against Pep Research

In the underlying case, which began in 2016, Nutrition Distribution sued its rival under the Lanham Act and later added the claim the company was in the violation of the Racketeer Influenced and Corrupt Organization (RICO) Act.

A federal magistrate judge has favored the plaintiff in a discovery dispute over false advertising claims involving two nutrition supplement companies.

Visit Northern California Record for the full article.

IronMag Labs Dismissal Reversed by Ninth Circuit, Allowing Ostarine Case to Proceed

A federal appeals court ruled a judge improperly dismissed a lawsuit against seller of Ostarine sports supplements

 

A 9th U.S. Circuit Court of Appeals panel handed client Nutrition Distribution LLC a victory today in its ongoing battle to prevent IronMag Labs LLC from its false advertising of its sports supplements containing Ostarine, a substance developed by pharma giant GTx to treat degenerative muscle diseases and cancers, announced Robert Tauler of Tauler Smith LLP in Los Angeles. The lawsuit alleges that IronMag Labs sells Ostarine without a prescription and markets Ostarine as a bodybuilding supplement, even though Ostarine is still in clinical trials. IronMag does not disclose to its customers that Ostarine has well known side effects, according to the lawsuit.

In 2016, U.S. District Judge Manuel Real dismissed the lawsuit under a legal theory called primary jurisdiction, holding that because the FDA had not yet determined if Ostarine was a new drug requiring further study and testing before it could be distributed, the court could not interfere by making its own determination.

The 9th Circuit reversed and remanded, ruling that the lower court had abused its discretion and misapplied the law. “We are pleased that the Ninth Circuit recognized the Plaintiff’s right to move forward with its claims.” explained Tauler.

Nutrition Distribution‘s position was bolstered by an amicus curiae brief filed by GTx Inc., which said that Ostarine is being investigated as a new drug, is the subject of clinical trials, and, as such, cannot be sold in supplements.

“We are pleased that the Ninth Circuit acknowledged GTx’s position that since Ostarine is the subject of publicly disclosed clinical trials, it cannot subsequently be marketed as a dietary supplement. It is important that the creators of drugs like Ostarine are able to protect their inventions and the integrity of the clinical trial process to ensure the safety of products,” Tauler said.

False advertising lawsuit wrongly dismissed; 9th U.S. Circuit panel rules in favor of Tauler Smith client

A 9th U.S. Circuit Court of Appeals panel handed client Nutrition Distribution LLC a major victory in its ongoing battle to prevent IronMag Labs LLC from its false advertising of its sports supplements containing Ostarine, a substance developed by pharma giant GTx to treat degenerative muscle diseases and cancers, announced Robert Tauler of Tauler Smith LLP in Los Angeles. The lawsuit alleges that IronMag Labs sells Ostarine without a prescription and markets Ostarine as a bodybuilding supplement, even though Ostarine is still in clinical trials. IronMag does not disclose to its customers that Ostarine has well known side effects.

Nutrition Distribution’s position was bolstered by an amicus curiae brief filed by GTx Inc., which said that Ostarine is being investigated as a new drug, is the subject of clinical trials, and, as such, cannot be sold in supplements.

Tauler Smith’s Lisa Zepeda made the successful appeal, arguing in part that “the FDA has made a clear statement that Defendants are selling their products illegally. Thus, even according to the district court’s own reasoning, Nutrition Distribution’s claims are not precluded.”

“We are pleased that the Ninth Circuit acknowledged GTx’s position that since Ostarine is the subject of publicly disclosed clinical trials, it cannot subsequently be marketed as a dietary supplement. It is important that the creators of drugs like Ostarine are able to protect their inventions and the integrity of the clinical trial process to ensure the safety of products,” Tauler said.

The decision was covered by the industry’s leading news source, Natural Products Insider.

  • This story spells out the issues involved in the lawsuit: https://tinyurl.com/FDAs-role
  • Coverage of the 9th Circuit judges’ decision to dismiss, with prejudice, a lower court’s ruling as “an abuse of discretion … due to a misapplication of the law.” https://tinyurl.com/primary-jurisdiction.
  • Watch the arguments made before the court here (Dec. 6, 2017).
  • Read the Jan. 24, 2018 ruling here.