UPDATE: On February 17, 2010, Medifast Inc. filed suit in US District Court, Southern District of California, alleging defamation, violation of California Corporations Code, and unfair business practices. On March 29, 2011, Judge Janis Sammartino dismissed all of Medifast’s claims against me in her ruling on my anti-SLAPP motion.
For nearly two years, Medifast (NYSE:MED) and its lawyers have known that I am not an appropriate target for a lawsuit. Nonetheless, they have pursued their malicious civil suit against me. Since the suit was filed, Medifast has been made aware of all the reasons why they shouldn’t be suing me:
- I never said anything false about the company
- I’m not aware of anything false that my co-defendants said, and which I later reprinted on this blog (and reprinting the writings of others does not make me responsible for those writings)
- Every bit of evidence produced during discovery shows that I was not part of any conspiracy, and that I actually went out of my way to make sure that false statements or assumptions weren’t made or published about Medifast
This week I was deposed in the Medifast case. Lead counsel Robert Giacovas was too busy to attend, so he sent his second string, Lainie Cohen to do the dirty work. I’m guessing he regrets that now, since Lainie was so inept throughout the entire day. (Although it was amusing to see how nervous she was all day, with her hands shaking each time my lawyer schooled her.)
Lucky for Lainie, Medifast’s General Counsel Michael Tanczyn was there to coach her during every break. To say that Lainie was clueless about the case and the happenings related to my involvement is an understatement. I suggest Medifast ask for a refund on some attorneys fees!
Medifast got nothing from me during this deposition. All the emails they have between me and other defendants clearly show my involvement (or lack thereof) in this matter. But still, Lainie tried to advance Medifast’s lies about me during the deposition. The best example pertains to Medifast’s auditors, Bagell, Josephs, and Levine.
Medifast stated in their complaint that I said in an article on my blog that BJL Wealth Management recommending the purchase of Medifast stock to an FDI operative “…would certainly be a conflict of interest for Medifast and its auditor, Baggell, Josephs, Levine & Company.” What I really said was “An auditor working in the capacity of an investment advisor does not automatically give rise to independence issues.” I discussed what would and would not constitute a conflict of interest, but I gave no conclusion as it relates to the Medifast situation because I simply did not have enough information to render an informed opinion.
The lawyers continue to lie about this issue, and have not corrected it in their amended complaint, even though I have pointed out this lie numerous times. And in my deposition, Lainie continued the lies by crafting questions that suggested I said there was a conflict of interest.
But the best part is that in addition to Medifast, Giacovas, and Cohen having the truth right in front of their eyes on my blog, they also have a series of emails between Barry Minkow, Sam Antar, and me regarding this auditor independence issue. In this series of emails, I argued with Barry and Sam about it. And I repeatedly said to them that I didn’t believe there was a conflict of interest based on the limited information we had about the auditors. Finding the truth doesn’t seem to be goal in this case, however, as Medifast’s attorneys continue to lie about my stance on this issue.
The other issue Cohen tried to harp on was “legally required disclosures.” Medifast falsely asserted in their complaint in this case that I wrote that “…Medifast is not complying with some unknown and undisclosed legally mandated reporting requirements.” I never said any such thing. In the blog posting Medifast referenced, I actually said: “We’ll never know for sure, as Medifast doesn’t disclose how much money the coaches are making, how much they spend on expenses of the business, what their attrition rates are, or how many recruits are actively selling or recruiting.” The questioning during the deposition was geared toward their false accusation that I said they’re not complying with disclosure laws, even though I never said that any of these disclosures were required by law. How long is Medifast going to continue to lie about this?
The questioning during the deposition was inept, and Cohen didn’t even ask about much that mattered. She went through my background in nauseating detail, none of which matters to this case in the least. She went through the Medifast postings on this site, as well as the emails I exchanged with other parties in this case. She asked some questions about what I know about Medifast and other multi-level marketing companies. But she didn’t really ask much about my relationship with Minkow, our work together over the last four years, or what I might know about him. Minkow is really the focus of this suit. Yet relatively few questions were asked about him. Dumb.
We had a day full of Lainie having no clue what has happened in the case, and when she did know something, she spent her time purposely misstating my testimony or the facts in an effort to trap me or discredit me.
But of course, the fun didn’t end there. Medifast is making outrageous demands following the deposition. For starters, I took notes for my lawyers during the deposition. I wanted to be clear about what was asked and what my answers were, and I wanted to note certain things that we should discuss later. Medifast is now claiming they’re entitled to my notes, even though they are attorney-client privileged documents. They’re falsely stating that I used the notes to “refresh my recollection” which gives them a right to see the notes. That’s not what happened. I only referred back to the notes when Cohen was misstating my prior testimony.
Medifast is also in bad faith making claims about the recovery of data from my computers. In July, I had a computer forensics company examine my computers to recover deleted documents and emails. These documents and emails were deleted long before Medifast filed suit, so they were properly deleted in the course of business. However, Medifast demanded that I attempt to recover them. We entered into an agreement with counsel about how that data recovery would be conducted. I followed the agreement to the letter, including having the consultant search for a lengthy list of keywords that Medifast demanded I use.
Hundreds of pages of documents were recovered and turned over to Medifast, but they’re not happy with that. They’re not happy with the fact that no deleted emails from 2009 were recovered in July 2010. Lainie is claiming that I must not have used the right list of keywords if no 2009 emails were recovered. This just goes to show how unintelligent she is. First, how does she think that emails from 2010 were recovered if I didn’t use their set of keywords? Second, why does she believe that seven or twelve or eighteen months after deletion, emails would be recoverable? The fact is that there is almost no chance of recovering emails that long after they’ve been deleted.
Medifast has thousands of pages of discovery in this case. Every bit of evidence as it relates to me shows that I had very limited involvement in the investigation of this company, and that I was in no way part of any conspiracy, real or perceived. But that doesn’t fit Medifast’s agenda (nor the attorneys, as the faster this case goes away, the less they’re able to bill Medifast). They keep making up reasons to come after me, and quite frankly, there isn’t even a shred of credibility to any of their claims.
I eagerly await our opportunity to argue our anti-SLAPP motion in front of the judge. This is a clear-cut case of malicious prosecution of me. Medifast never had any evidence that I defamed them (they still can’t come up with even one false statement I made about the company), they certainly can’t prove that I was malicious or reckless in anything that I said, and they can’t prove that I was a part of any conspiracy. They knew this before they filed the suit. They know it now. And still they proceed with their malicious prosecution.