Roca Labs Lawsuit Theories

Standard

roca-labs-lawsuitRoca Labs is no stranger to ridiculous litigation. Last year, Roca Labs filed lawsuits against a multitude of companies and individuals in an attempt to silence critics. Essentially, the company sells a sketchy product called Gastric Bypass No Surgery. Roca Labs claims it is an alternative to gastric bypass surgery, but it has questionable results, and some people have even said it is dangerous. There are plenty of people alleging that Roca Labs is making false claims about its product, thus the company seems to truly earn the label of scam or fraud.

Roca Labs wants to stop customers (and others) from discussing their negative opinions of the company and the products. The company says critics have damaged is reputation, but I submit to you that Roca Labs itself damages its reputation.

Roca Labs filed suit against me in Florida, using a couple of theories that they thought were novel. Unfortunately for them, those two litigation theories have already been tried against me and were shot down by federal courts at both the district court level and the appeals court level.  Back in 2010, Medifast Inc. filed a $270 million lawsuit against me (and others) in U.S. District Court in the Southern District of California. I was dismissed from that case by the district court. Medifast appealed, and the appeals court upheld my dismissal from the case. Counsel for Roca Labs could learn a thing or two from that case. Continue reading

Marc G. Nochimson, CPA, Medifast, and Deficient Audits

Standard

Alternative Title: Marc Nochimson, CPA makes the case FOR publicly identifying audit partners. (You really need to know if a goof like this was the engagement partner!)

In 2013, Marc G. Nochimson, CPA entered into a settlement agreement with the Securities and Exchange Commission based on his improper professional conduct as the engagement partner for the Medifast Inc. audits from 2006 to 2008. You may recall that in 2010, Medifast sued me (and several others) for negative opinions we expressed about Medifast.

Among the negative opinions: Medifast’s increasing revenue is the result of an endless chain recruiting scheme.  Medifast doesn’t disclose certain figures that would allow consumers and investors to fully evaluate the company and its business. Sam Antar criticized Medifast for its revenue accounting. Others criticized the company’s revenue and business model. Indeed, Medifast did overstate it income, resulting in a civil penalty and a cease and desist order from the SEC.

As time goes on, it appears more likely that our criticisms of Medifast were spot on. It also appears that the professionals affiliated with Medifast did not meet professional standards Continue reading

Medifast Victory For Tracy Coenen

Standard

medifastAnother victory for Tracy Coenen in the malicious lawsuit filed more than 4 years ago by Medifast (NYSE: MED) related to their Take Shape for Life business unit. In 2011, I was dismissed from the lawsuit following my successful filing and argument of an anti-SLAPP motion. Medifast immediately appealed that decision to the United States Court of Appeals for the Ninth Circuit.

Today, my dismissal from the Medifast lawsuit was affirmed by the Court of Appeals, which said:

5. Finally, we affirm the district court’s order granting of Coenen’s anti-SLAPP motion. Coenen’s statements were either not libelous per se or were republications for which she should be afforded immunity under the CDA.
6. Appellee Coenen shall recover her costs on appeal. All the other parties shall bear their own costs on appeal.

Medifast can suck it.

Medifast Cease and Desist Order and Civil Penalty

Standard

On September 18, 2013 a cease and desist order was filed pursuant to the Security and Exchange Commission’s investigation of Medifast Inc. (Medifast’s business includes Take Shape for Life, or TSFL, which is its multi-level marketing division.) Medifast materially overstated income and understated expenses from 2006 through 2009, according to the SEC. This has resulted in the cease and desist order, and has Medifast paying a $200,000 penalty to the government.

You may recall that Medifast sued several people (including me) in 2010 for criticizing their business model and business practices.

One of the issues in the lawsuit was the criticism of Medifast’s auditors, Bagell, Josephs, Levine, and Company.The criticism of the auditors was grounded in a 2008 PCAOB report on an inspection of six of BJL’s audits, which turned up audit deficiencies in three of them. In 2010 Medifast switched auditors. Continue reading

Does Xyngular Work? (Or Isagenix, or Herbalife, or Take Shape For Life, or Visalus, or Any Multi-Level Marketing Company)

Standard

Several months ago I wrote an article on the Xyngular weight loss program being pimped by Jennifer McKinney (aka mommy blogger MckMama).  The bottom line for me was that these programs do not work because:

  • They create short-term weight loss through a dizzying cycle of starvation, unhealthy meal replacement shakes, and questionable drug-like “supplements” that are supposed to get you high and suppress your appetite
  • The representatives make repeated health claims are strictly prohibited by the federal government. The distributors claim that the products cure anything and everything from joint pain, to autism, to diabetes, and more.
  • Xyngular (and Herbalife, Medifast, Take Shape For Life, Visalus, Isagenix, and the rest of them) have poor long-term results because they are fad diets that rely on starvation and potentially unsafe substances. The vast majority who lose weight with these programs gain it all back. Continue reading

Multi-Level Marketing Income Disclosures

Standard

Medifast Pyramid SchemeSome multi-level marketing (MLM) companies release income disclosures or earnings disclosures. These documents theoretically provide insight into how much distributors earn in commissions or overrides.

However, the disclosures are generally worthless. What is more important than the information in these documents? The information that is not disclosed in the documents.

Multilevel marketing companies purposely omit important information that would allow potential distributors or investors to have real insight into these plans. Continue reading

Medifast Take Shape For Life: Endless Chain?

Standard

A recent filing in the Medifast appeal (the case in which Medifast sued me and others, and lost miserably) raises some interesting questions about whether Take Shape For Life (TSFL) is an endless chain recruitment scheme. From that filing:

A. Medifast’s Evidence Does Not Prima Facie Show That FitzPatrick’s “Endless Chain” Statement is Provably False

Medifast’s reply again does not demonstrate that FitzPatrick’s endless-chain statement is false. Because Medifast has alleged libel, it must make a prima facie showing that challenged statements are untrue. Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 516 (1991). Courts also evaluate whether an average reader would consider the statement to be fact or protected opinion. Carver v. Bonds, 135 Cal.App.4th 328, 344 (2005). Continue reading

Right to Free Speech Wins Again

Standard

Popehat points us to a nice victory by SOCNET in a lawsuit filed by John Giduck, the man who claims he was defamed when a SOCNET user stated that he was fraudulently posing as a Special Forces veteran.

The court granted SOCNET’s motion to dismiss (even with no anti-SLAPP statute in Colorado), saying:

It is this tension that has generated numerous cases addressing the first element of a defamation action, i.e. is the statement defamatory. Not every untrue, uncomplimentary or offensive statement concerning an individual is defamatory. Continue reading

Medifast Lawyers Lie to the Court (Again)

Standard

In the never-ending saga of Medifast Inc’s $270 million lawsuit against me for defamation related to their Take Shape for Life division (TSFL), the company and its lawyers have repeatedly lied to the court about what I have said, written, and done. Apparently, this is the only way they think they might win their case. Thankfully, the judge saw through their lies and dismissed me from the case under California’s anti-SLAPP legislation.

That hasn’t stopped Medifast from continuing the lies, however. And the company appears to be upset over my writings about the lawsuit. Management and the attorneys have falsely stated that I am writing about this case to get publicity for myself. The truth is that I write about this case to expose the lies and shady litigation procedure employed by the company.

I do not believe a company like Medifast should be allowed to commit these acts in the dark of night. I want to expose management and the attorneys for the liars that they are, so the whole world can see it. Continue reading

Defamation and Statements of Opinion

Standard

A couple of months ago, a ruling on an anti-SLAPP motion in a defamation case against Gawker Media (owner of website Gizmodo) got my attention. Scott Redmond, with his service called Peep Telephony (or Peep Wireless), was upset because Gizmodo posted a negative review of the service. More specifically, Gizmodo called the service a scam, saying that it offers “free” cellular service for phone calls, texts, and data access. A look at Peep’s website produced this criticism:

To be frank, this all sounds like bullshit. In fact, the combination of everything described was so strange, it almost made the company seem like a larger-than-life prank on the tech world. The closest thing to a technical explanation for Peep is this: Continue reading