Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 1 of 32. PageID #: 1

Transcription

1 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 1 of 32. PageID #: 1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION BARRY A. COHEN 3820 Bendemeer Road Cleveland, OH 44118, Individually and On Behalf of All Others Similarly Situated, vs. Plaintiff, BACTOLAC PHARMACEUTICAL, INC. 7 Oser Avenue Hauppauge, NY 11788; ABSOLUTE NUTRITION, LLC a/k/a ABSOLUTE NUTRITION 1350 Blue Hills Avenue, Suite F Bloomfield, CT ; NUTRITIONAL SCIENCES, LLC 350 Blue Hills Avenue Bloomfield, CT 06002; GREGG SCULLY; ALAN NATHAN; and JOHN DOE CORPORATIONS 1-25, Clerk Shall Give Notice to the Attorney General of Ohio per R.C (E: Attorney General Mike DeWine 30 East Broad Street, 14 th Floor Columbus, Ohio Defendants. Case No: CLASS ACTION COMPLAINT DEMAND FOR JURY TRIAL

2 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 2 of 32. PageID #: 2 Plaintiff, Barry A. Cohen ( Plaintiff, by and through his attorneys, individually and on behalf of all others similarly situated, based upon personal knowledge as to himself and his own acts and upon information and belief and the investigation of counsel as to all other matters, alleges as follows: INTRODUCTION 1. On June 17, 2014, the Federal Trade Commission ( FTC testified before the United States Senate Commerce Subcommittee on Agency Efforts to Combat Fraudulent and Deceptive Claims for Weight-Loss Products, informing the subcommittee of the prevalence of fraud in the consumer weight-loss marketplace, stating, in part: Last year, Americans were expected to spend $2.4 billion on weight-loss services, and this figure is predicted to rise to $2.7 billion by Where there is strong consumer interest, unfortunately fraud often follows. In our 2011 survey of consumer fraud, the FTC reported that more consumers were victims of fraudulent weight-loss products than of any of the other specific frauds covered by the survey. 1 This action arises from one of these incidences of fraud about which the FTC warned. 2. Specifically, this action relates to an unlawful, unfair, and deceptive scheme in connection with the production, distribution, advertising, labeling, marketing, and sale of Garcinia cambogia weight-loss supplements manufactured by Bactolac Pharmaceutical, Inc. (the Product. 3. The active nutrient of the Product is hydroxycitric acid ( HCA. 4. Sellers of Garcinia cambogia ordinarily represent the amount of HCA contained in their supplements as a percentage of the total Garcinia cambogia extract content. For 1 Mary Koelbel Engle, Prepared Statement of the Federal Trade Commission: Protecting Consumers from False and Deceptive Advertising of Weight-Loss Products, before the Senate Committee on Commerce, Science, and Transportation Subcommittee on Consumer Protection, Product Safety, and Insurance, United States Senate, Washington, D.C., June 17, 2014, available at

3 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 3 of 32. PageID #: 3 example, a dose of 1,000 mg of Garcinia cambogia extract that contains 50% HCA would be expected to yield 500 mg of HCA. If a consumer takes this dose three times daily, the consumer will have taken 1,500 mg of HCA in a day. 5. Clinical testing of Garcinia cambogia extract has arguably confirmed modest weight-loss efficacy at daily doses of at least 1,500 mg of the active ingredient, HCA Defendant, Bactolac Pharmaceutical, Inc. ( Bactolac, manufactures and labels the Product for sale by distributors under private label. 7. Upon information and belief, Defendants, Absolute Nutrition, LLC ( Absolute Nutrition, Nutritional Sciences, LLC ( Nutritional Sciences, and John Doe Corporations 1-25 ( Doe Corps. market and sell the Product under their private labels to men and women throughout the State of Ohio, as well as the rest of the United States, using various channels, including websites (e.g., and other e-commerce marketplaces, such as and Defendant, Gregg Scully ( Scully, is the president and a principal of Absolute Nutrition, while Defendant, Alan Nathan ( Nathan, was the managing member of Nutritional Sciences and is the managing member and also a principal of Absolute Nutrition. 8. At all relevant times since at least 2012, Bactolac, Absolute Nutrition, Nutritional Sciences, Scully, Nathan, and Doe Corps (collectively, Defendants have knowingly engaged in a deliberate pattern of wrongful, illegal, and fraudulent practices by unlawfully, unfairly, falsely, misleadingly, and/or deceptively representing that the Product contains in excess of 50% HCA, which, if true and taken at the recommended dosage level, would yield 1,500 mg or more 2 See, e.g.,

4 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 4 of 32. PageID #: 4 of HCA, an arguably effective daily dosage. But, contrary to these representations on the Product labels and advertising, the Product does not contain 50% or more of HCA. 9. Because Defendants have operated this scheme as a common business enterprise, they may be held jointly and severally liable for such acts and practices. 10. As part of their pervasive pattern of wrongful conduct during the Class Period (i.e., four years prior to the filing of this Complaint until the entry of judgment, Defendants have utilized (and continue to utilize inter-state wire facilities, namely the Internet, U.S. postal service, and private and commercial interstate carriers, to fraudulently and deceptively advertise, market, manufacture, label, offer for sale, sell, and distribute the Product to consumers in Ohio and throughout the United States. In doing so, Defendants business activities have affected interstate commerce. In particular, Defendants have engaged in the systematic and continuous practices of disseminating, throughout the United States, false and misleading information regarding the Product s nutrient content via Internet websites and postings, advertisements, Product packaging and labeling, and other advertising campaigns intended to coax unsuspecting consumers, including Plaintiff and the Class members, into purchasing millions of dollars worth of the Product, which is manufactured, marketed, advertised, labeled, and sold by Defendants. 11. Accordingly, Plaintiff, on behalf of himself and all others similarly situated who have purchased the Product as a result of Defendants unlawful scheme alleged herein, brings this action against Defendants for violations of (1 the federal Racketeer Influenced and Corrupt Organizations Act ( RICO, 18 U.S.C ; (2 the Ohio Corrupt Practices Act ( OCPA, Ohio Rev. Code , et seq.; (3 the Ohio Consumer Sales Practices Act ( OCSPA, Ohio Rev. Code , et seq.; and (4 unjust enrichment, in the alternative, to remedy violations for which Plaintiff seeks to hold Defendants accountable, including for their - 3 -

5 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 5 of 32. PageID #: 5 wrongful conduct, to end unfair and deceptive practices, and to recover damages on behalf of a Class (defined below of consumers. JURISDICTION AND VENUE 12. This Court has original jurisdiction over this action pursuant to 28 U.S.C. 1332(d(2 because the matter in controversy, exclusive of interest and costs, exceeds the sum or value of $5,000,000 and Plaintiff and certain members of the Class are citizens of states different from that of Defendants. This Court also has federal jurisdiction pursuant to 28 U.S.C and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C This Court has personal jurisdiction over Defendants because they have conducted and continue to conduct business in the State of Ohio and because the acts and omissions complained of herein have had significant effects on the State of Ohio. 14. Venue is proper in this District pursuant to 28 U.S.C and 18 U.S.C. 1965, because Defendants are authorized to and do conduct substantial business in this District and have intentionally availed themselves of the laws and markets within this District through the manufacturing, promotion, marketing, distribution, and sale of the Product here, and Plaintiff resides in this District. PARTIES 15. Plaintiff is a resident of Cleveland Heights, Ohio. Plaintiff purchased the Product from Absolute Nutrition s website on or around August 28, 2015 (order no Bactolac is a company incorporated under the laws of Delaware and maintains its office at 7 Oser Avenue in Hauppauge, New York. Bactolac is, therefore, a citizen of Delaware and New York, but does business in the State of Ohio and throughout the United States. Since at - 4 -

6 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 6 of 32. PageID #: 6 least 2012, Bactolac has manufactured, packaged, and labeled the Product for promotion, marketing, distribution, and sale by Absolute Nutrition, Nutritional Sciences, and the Doe Corps. 17. Absolute Nutrition is a limited liability company that is incorporated under the laws of Connecticut and maintains its office at 1350 Blue Hills Avenue in Bloomfield, Connecticut. Absolute Nutrition is, therefore, a citizen of Connecticut. Absolute Nutrition promotes, markets, distributes, and sells the Product throughout the United States, including to consumers located in the State of Ohio. 18. Scully is the president and a principal of Absolute Nutrition, and, upon information and belief, is a resident of Connecticut. 19. Nutritional Sciences is a limited liability company that was incorporated under the laws of Connecticut and also maintained its office at 1350 Blue Hills Avenue in Bloomfield, Connecticut, the same address as Absolute Nutrition. It has since been dissolved but, until its dissolution, Nutritional Sciences also promoted, marketed, distributed, and sold the Product throughout the United States, including to consumers located in the State of Ohio. 20. Nathan was the managing member of Nutritional Sciences. He is also the managing member and a principal of Absolute Nutrition and is a resident of Weatogue, Connecticut. 21. Upon information and belief, the Doe Corps. are the entities other than Absolute Nutrition and Nutritional Sciences that promote, market, distribute, and sell the Product throughout the United States, including to consumers located in the State of Ohio. The names and headquarters of these Doe Corps. are currently unknown to Plaintiff and could not be ascertained with the exercise of reasonable diligence prior to the filing of this lawsuit

7 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 7 of 32. PageID #: 7 FACTUAL ALLEGATIONS Defendants False and Misleading Labeling and Advertising of the Product 22. Fraudulent weight-loss products are an enormous problem in the United States. In recent years, the FTC has increased its enforcement activities to combat fraudulent and deceptive claims for weight-loss pills and supplements. 3 In particular, the FTC has consistently required that claims for diet supplements that are not regulated by the U.S. Food and Drug Administration ( FDA including, specifically, Garcinia cambogia be substantiated prior to their propagation Garcinia cambogia is a plant, native to Indonesia, that contains HCA as its active nutrient. Garcinia cambogia has been the focus of weight-loss industry promotions following its introduction on an episode of the Dr. Oz Show that aired on television in October See Mary Koelbel Engle, Prepared Statement of the Federal Trade Commission: Protecting Consumers from False and Deceptive Advertising of Weight-Loss Products, before the Senate Committee on Commerce, Science, and Transportation Subcommittee on Consumer Protection, Product Safety, and Insurance, United States Senate, Washington, D.C., June 17, See, e.g.,

8 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 8 of 32. PageID #: Neither the FDA nor any other federal or state agency regularly or routinely tests Garcinia cambogia for quality, content, or efficacy at one or more dosage levels. Consumers typically receive, read, and rely upon information disseminated by the supplier of weight-loss supplements, much of which is found on the product labels and in promotional materials. Suppliers also set the dosing levels of the weight-loss supplements. 25. The label of a dietary supplement or food product may contain one of three types of claims: health claims, nutrient content claims, or structure/function claims. Nutrient content claims describe the relative amount of a nutrient or dietary substance in a product. 26. At all relevant times, Defendants knowingly and intentionally agreed to prominently display the claim that the Product contains 50% or more of HCA on the Product labeling and advertising. Defendants claim that the Product contains in excess of 50% HCA is a nutrient content claim. 27. Bactolac is a producer of private label nutritional supplements, whose services include testing, production, packaging, design, and marketing resources. The Product (Garcinia cambogia is among its top-selling private label items. Indeed, Bactolac acquired 2,398 kg of Garcinia cambogia in one shipment on or after May 23, This one shipment alone was sufficient to supply about 5,000 consumers for a full year, assuming each took the recommended dosage of 1,500 mg per day, seven days a week, for a full year. 28. Absolute Nutrition markets, advertises, distributes, and sells the Product through the Internet, the U.S. postal service, private and commercial carriers, and other means to consumers throughout the United States. Scully is the president and a principal of Absolute Nutrition, while Nathan is the managing member and also a principal of Absolute Nutrition

9 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 9 of 32. PageID #: As part of its marketing and advertising, Absolute Nutrition has claimed and continues to claim that the Product contains 60% HCA. Indeed, the claim -- that the Product contains 60% HCA -- is conspicuously and prominently displayed on the Product s bottle label, a true and correct copy of which is attached hereto as Exhibit A, as well as on Absolute Nutrition s website describing the Product, a true and correct copy (as of December 7, 2015 of which is attached hereto as Exhibit B. alia: 30. Additionally, Absolute Nutrition advised at relevant times on its website, inter There are four things you ll want to look for in the product that you choose. First, make sure that the supplement is clearly marked as HCA, or Garcinia Cambogia and that it contains at least fifty percent hydroxycitric acid.... Last, make sure it has a daily serving size of 3000 milligrams, otherwise you won t be getting enough of the product to make an impact on your weight-loss. (emphasis added Nutritional Sciences also marketed, advertised, distributed, and sold the Product through the Internet, the U.S. postal service, private and commercial carriers, and other means to consumers throughout the United States. Nathan was the managing member and also a principal of Nutritional Sciences. 32. As part of its marketing and advertising, Nutritional Sciences has claimed and continues to claim that the Product consists of 60% HCA. Indeed, the claim that the Product contains 60% HCA is also conspicuously and prominently displayed on the Product s bottle label that it distributed, a true and correct copy of which is attached hereto as Exhibit C. 5 While Plaintiff viewed these statements on Absolute Nutrition s website at the time he purchased the Product in August 2015, Absolute Nutrition has since removed these statements entirely from its website

10 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 10 of 32. PageID #: Upon information and belief, the Doe Corps. similarly market, advertise, distribute, and sell the Product through the Internet, the U.S. postal service, private and commercial carriers, and other means to consumers throughout the United States. A recent Google survey of Garcinia cambogia found that page 1 of the Google search contained 11 advertisements for the supplement, all of which advertised HCA content equal to or greater than 50%. Plaintiff s Experience and the Falsity of Defendants Claims 34. Plaintiff purchased the Product from Absolute Nutrition s website, for $29.99 plus shipping on or about August 28, 2015, and received the actual Product on September 1, 2015 through U.P.S. In purchasing the Product, Plaintiff read and relied upon Absolute Nutrition s and Bactolac s representations found in their online advertisements and Product labeling; namely, that the Product contains 60% HCA and thus meets the active ingredient threshold for efficacy as a weight-loss aid if taken at the recommended dosage. 35. On September 1, 2015, Plaintiff took the Product as directed prior to supper. 36. Shortly thereafter, Plaintiff conducted research online and discovered that the Product had been analyzed by ConsumerLab.com in a report published in November 2013 ( ConsumerLab Report, a true and correct copy of which is attached hereto as Exhibit D. 6 The ConsumerLab Report indicated that ConsumerLab.com s independent testing had found that the Product contained approximately 12.8% HCA, or approximately mg of HCA, at the recommended dosage level i.e., only 21.8% of the amount of 1,800 mg of HCA that Absolute Nutrition claimed is the prescribed dosage of the Product. Accordingly, to achieve the 6 See Product Review: Garcinia Cambogia (HCA Supplements, ConsumerLab.com (Nov ( ConsumerLab Report

11 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 11 of 32. PageID #: 11 represented intake of 1,800 mg per day as bargained for in purchasing the Product, a consumer would have to purchase and consume roughly five-fold the prescribed amount. 37. Absolute Nutrition and Scully subsequently represented to Plaintiff by on or about October 16, 2015, that, after the issuance of the ConsumerLab Report in 2013, Absolute Nutrition began sourcing from a different manufacturer and fixed any potential problems with respect to the Product s formulation, to bring the Product in line with the representations on its label; namely, the claim that the Product contained 60% HCA. Nonetheless, given that the Product still contains far less than the 60% HCA represented, as discussed below, in all likelihood, Absolute Nutrition did not change manufacturers, but used Bactolac before and after the issuance of the ConsumerLab Report. 38. On or around October 16, 2015, Absolute Nutrition and Scully provided Plaintiff with a fully executed Certificate of Analysis and Assay prepared by Bactolac ( Bactolac Assay and purportedly covering the Product purchased by Plaintiff. An assay is an analytic procedure to obtain an accurate and exact numeric quantitative measure of the amount of a substance in a sample. The Bactolac Assay concludes that each capsule of the Product contains GARCINIA CAMBOGIA FRUIT EXTRACT 60% HCA, and that the Assay results were 100%. The Bactolac Assay, date June 5, 2014, was mailed or wired to Absolute Nutrition thereafter, and ed to Plaintiff as alleged above. A true and correct copy of the Bactolac Assay is attached hereto as Exhibit E. 39. In November 2015, Plaintiff had the Product he purchased analyzed for HCA content by GAAS Analytical ( GAAS of Phoenix, Arizona. GAAS is an independent contract testing laboratory of, inter alia, dietary supplements. Upon testing the Product, GAAS found that the hydroxycitric acid content of the Garcinia cambogia he purchased was a mere 3.4%

12 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 12 of 32. PageID #: 12 HCA. A true and correct copy of GAAS s report on the bottle of Product purchased by Plaintiff is attached hereto as Exhibit F. 40. Plaintiff thereafter acquired a bottle of the Product with the lot number identified in the Bactolac Assay, on which GAAS performed a second analysis. GAAS found this second sample to contain 26% HCA. A true and correct copy of GAAS s report on this second bottle of Product is attached hereto as Exhibit G. In comparison, as mentioned above, the Bactolac Assay falsely indicated that the Product s ingredients included Garcinia combogia fruit extract 60% HCA and that the Assay Results were 100%. 41. As stated earlier, ConsumerLab analyzed Absolute Nutrition s Product in 2013 (twice, pursuant to ConsumerLab s testing protocols and found the Product contained 12.8% HCA. 42. Thus, four independent tests of the Product purchased randomly in the market over a two-year period demonstrate that the Product contains only between 3.4% and 26% HCA Indeed, despite being on notice from the ConsumerLab Report that the Product Defendants were hawking to unwary consumers contained far less than the 60% HCA represented in Absolution Nutrition s advertising, marketing, and labeling, Bactolac and Absolute Nutrition failed to ensure that the Product s contents complied with their representations and labeling. This fact evidences their knowledge of the falsity perpetrated on the consuming public. 44. Nutritional Sciences also failed the same 2013 ConsumerLab Report, which found that Nutritional Sciences Product only contained 21.9% of the claimed 600 mg HCA within the 7 The 3.4% HCA content finding is subject to a 0.7% standard deviation, while the 26% finding is subject to a 2.6% standard deviation

13 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 13 of 32. PageID #: 13 Product. This fact further confirms Defendants knowledge of the falsity perpetrated on the consumimg public. 45. Meanwhile, the falsity of the Bactolac Assay establishes Defendants knowing and willing collusion to defraud the public. 46. Plaintiff and the proposed Class members suffered injury as a result of the fraudulent and improper actions of Defendants described herein because Plaintiff and Class members were deceived into thinking the Product contains the amount of HCA expressly listed on the Product s labeling and marketing (i.e., 60% of the gross content of the Product or 1,800 mg per daily dosage. 47. Moreover, active HCA content of 3.4% to 26% is worthless to Plaintiff and the Class members, as acknowledged by Absolute Nutrition s own statements posted on its website from at least 2012 until late in 2015 (as quoted above, Absolute Nutrition s website acknowledged that the Product would be worthless absent an HCA content of at least 50%. 48. As such, had Plaintiff and the Class members known that the Product contained only between 3.4% and 26% HCA content, they would not have purchased the Product. Defendants Enterprise 49. At all relevant times and as described above, Defendants carried out their scheme affecting interstate commerce to defraud Plaintiff and the Class members by means of an enterprise within the meaning of 18 U.S.C. 1961(4. The enterprise consisted of (1 Bactolac; (2 Absolute Nutrition; (3 Nutritional Sciences; (4 Scully; (5 Nathan; and the (6 Doe Corps., which constitute an association-in-fact enterprise within the meaning of RICO. 50. Defendants are well-experienced in the manufacture, packaging, promotion, marketing and sale of alleged weight-loss products through false and deceptive advertising and

14 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 14 of 32. PageID #: 14 labeling. Bactolac, Absolute Nutrition, Nutritional Sciences, Scully, Nathan, and the Doe Corps. conspired and worked in tandem to create the falsely-labeled Product, capitalizing on America s interest in weight-loss products. 51. Bactolac manufactures and labels the Product bearing the false claims of HCA content. In other words, Bactolac physically inputs 3.4% to 26% HCA content into the Product, but nevertheless labels the Product as containing 50% or more HCA (60% HCA in the case of the labels it provides to Absolute Nutrition. Meanwhile, Bactolac physically inputs 21.9% of the represented HCA content into the Product it labels as containing 60% HCA for Nutritional Sciences. 52. As such, Bactolac has been aware at all relevant times that the Product it was manufacturing, labeling and testing did not contain 50% or more HCA content as the Product label represented, and Bactolac was aware that its cohorts, Absolute Nutrition, Nutritional Sciences and the Doe Corps., were falsely marketing and advertising the Products as containing 50% or more of HCA. 53. Absolute Nutrition, Nutritional Sciences, Scully, Nathan, and the Doe Corps. are engaged in the marketing, advertising, distribution, and sale of the Product bearing the false claims of HCA content. Indeed, their marketing and advertising efforts center on false and unsubstantiated nutrient content claims. 54. As discussed above, Bactolac, Absolute Nutrition, Nutritional Sciences, Scully, and Nathan (as well as the Doe Corps. were on actual notice that the Product did not contain the 60% HCA represented, as a result of the ConsumerLab Report. Nevertheless, their response was not to rectify the falsity, but to create the sham Bactolac Assay to assuage consumers and other

15 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 15 of 32. PageID #: 15 interested parties. See Ex. E. Indeed, Absolute Nutrition and Scully transmitted the purported assay by to Plaintiff on or about October 16, 2015, for this very purpose. 55. Moreover, in furtherance of their scheme to deceive the consuming public with false claims of the Product s HCA content and efficacy, Absolute Nutrition and Scully misrepresented to Plaintiff and to Plaintiff s counsel, in writing and orally over interstate wire, that the Product had been reformulated. 56. The enterprise described herein was formed between Defendants from at least The enterprise is engaged in a pattern of racketeering activity by advertising and placing into commerce the falsely-labeled Product over at least a three-year period, from 2012 to the present, collecting hundreds of thousands, if not millions, of dollars in illicit profits as a result. 57. The enterprise is separate and distinct from the pattern of racketeering activity. The enterprise is an ongoing organization or group and exists to advance the interests of the individual entities that comprise its membership, i.e., by working in tandem to sell the Product in the illicit manner described herein. From 2012 through the present, the enterprise served all conspirators common purpose of manufacturing, packaging, labeling, advertising, distributing, and selling as many units of the Product -- using false claims regarding the Product s HCA content as possible -- to consumers throughout the United States, thereby maximizing Defendants own profits and revenues and sharing the illicit gains derived from the deceived and defrauded consumers. Each member of the enterprise benefited from the common purpose of selling more units of the Product, and receiving more from the sales of the Product than they otherwise would have, had the Product been truthfully advertised, marketed, and labeled. 58. Each member of the enterprise, i.e., Bactolac, Absolute Nutrition, Nutritional Sciences, Scully, Nathan, and the Doe Corps., participated in the conduct of the enterprise, i.e.,

16 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 16 of 32. PageID #: 16 the production and distribution of the Product through a pattern of racketeering activity as described herein. Pattern of Racketeering Activity and Predicate Acts 59. For a number of years, Defendants have used the U.S. mails, interstate wire facilities (including Internet websites, private and commercial carriers, and online and/or print advertising and Product labeling, in order to fraudulently misrepresent their Product and illegally market their weight-loss products. The acts and practices of Defendants as alleged have been in, or affected, interstate commerce. 60. Defendants marketing blitz was designed to saturate the Internet and other forms of advertising with Defendants false and misleading claims concerning the Product. The same false claims are on the Product s packaging and labeling. 61. For example, as noted above, Absolute Nutrition has, at all times relevant, and continues to this day to operate a website, which repeats the fraudulent representations regarding the Product to all visitors. In addition, Defendants use the U.S. mails to deliver the Product, which also contain the fraudulent representations on its label. For example, Plaintiff received the Product on September 1, 2015 through U.P.S. During the relevant period, thousands of Class members have viewed and relied upon the fraudulent representations delivered through wire and the mails when they purchased the Products. 62. Meanwhile, Bactolac used the mails and other interstate facilities to deliver the Product that it knowingly and intentionally labeled with false representations. During the Class Period, Bactolac has manufactured and delivered tens of thousands of units of the Product to Absolute Nutrition, Nutritional Sciences and the Doe Corps., order fulfillment companies, middlemen such as Walgreen s, or directly to the Class members through the mails

17 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 17 of 32. PageID #: For example, on or about May 23, 2014, Bactolac imported 2,398 kg of Garcinia cambogia in one shipment, which it bottled and falsely labeled and placed into the stream of commerce. About three weeks later Bactolac issued the Bactolac Assay. See Exhibit E. 64. Indeed, in furtherance of their enterprise, Bactolac, Absolute Nutrition and Scully used the mail and wire to attempt to reassure Plaintiff of the veracity of their representations regarding the Product. On or about October 16, 2015, Absolute Nutrition and Scully ed the Assay to Plaintiff, falsely representing that the Product had been reformulated following the publication of the ConsumerLab Report. On or about October 16, 2015, Absolute Nutrition and Scully also provided the sham Bactolac Assay to provide a semblance of scientific support for its representations that the Product was reformulated to be label compliant. 65. The core of Defendants fraudulent representations regarding the Product consists of the statement on each and every Product bottle that the Product contains 50% or more HCA ( 60% in the case of Absolute Nutrition and Nutritional Sciences. Additionally the false nutrient content claim was widely advertised, and viewed by Plaintiff and Class members, for at least three years prior to this litigation. The Product could not be purchased without exposure to the false claim that the Product contains more than 50% HCA. 66. Defendants nutrient claims are false, misleading, deceptive, and inaccurate. Further, Defendants, and each of them, knew at the time of dissemination that the claims were false, misleading, deceptive, and inaccurate. 67. Indeed, at all relevant times, the HCA content of the Product fell woefully short of the amount claimed by Defendants in their advertisement and labeling, and the claim (and the Product s efficacy was never substantiated by valid scientific evidence, even after Absolute Nutrition supposedly reformulated the Product to meet its labeling claims

18 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 18 of 32. PageID #: Defendants have engaged in the aforementioned acts of racketeering activity for at least three years and will continue to do so. 69. As a result of the foregoing, Plaintiff and the Class have been injured in that they paid for the Product that did not, and could not, meet the claimed nutrient composition and that did not, and could not, provide the benefits promised in the advertisements and labeling of the Product, as a direct result of the predicate acts described herein. Defendants false and misleading statements sent via the U.S. mail, public and private carriers and interstate wires were directed to Plaintiff and the members of the proposed Class, and were the direct and proximate cause of the injuries to Plaintiff and the members of Class. Plaintiff and the Class members would not have purchased the Product and incurred such losses but for the predicate acts described herein. CLASS ACTION ALLEGATIONS 70. Plaintiff brings this lawsuit as a class action on behalf of himself and all other similarly situated members of the Class, as defined below, pursuant to the Federal Rule of Civil Procedure 23(a and (b(3. This class action satisfies the numerosity, commonality, typicality, adequacy, predominance, and superiority requirements of those provisions. The Class is defined, subject to timely amendment following discovery, as follows: Nationwide Class All persons who purchased, not for resale or assignment, a Garcinia Cambogia product manufactured by Bactolac and advertised as containing 50% or more HCA, within the United States since January 19, 2012 ( the Nationwide Class. Ohio Subclass All persons who purchased, not for resale or assignment, a Garcinia Cambogia product manufactured by Bactolac and advertised as containing 50% or more HCA, within the State of Ohio since January 19, 2011 ( the Ohio Subclass and collectively, together with the Nationwide Class, the Class

19 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 19 of 32. PageID #: Excluded from the Class are: (1 Defendants and their subsidiaries, affiliates, employees, officers, directors, assigns, and successors, as well as any entities or divisions in which any of the Defendants have a controlling interest; (2 the Judge to whom this case is assigned and any member of the Judge s immediate family; and (3 anyone asserting claims for personal injury in connection with the Product. Plaintiff reserves the right to amend the definition of the Class if discovery and/or further investigation reveal that the Class should be expanded or otherwise modified. 72. Numerosity: The Class is so numerous that joinder of all members is impracticable. While the exact number of Class members is presently unknown, and can only be ascertained from records maintained by, and in the possession and control of, Defendants, Plaintiff reasonably estimates that the Class consists of thousands of Class members. 73. Commonality and Predominance: Common questions of law and fact exist as to all members of the Class. These common questions predominate over any questions affecting only individual Class members and include, but are not limited to, the following: a. Whether Defendants engaged in a pattern of fraudulent, deceptive, and misleading conduct targeting the public through their manufacturing, marketing, advertising, promotion, distribution, labeling, and sale of the Product; b. Whether Defendants misrepresented the HCA content of the Product; c. Whether the acts and omissions of Defendants violated RICO; d. Whether the acts and omissions of Defendants violated OCPA; e. Whether the acts and omissions of Defendants violated OCSPA; f. Whether Defendants should be enjoined from the continued unlawful manufacturing, marketing, advertising, promotion, distribution, labeling, and sale of the Product;

20 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 20 of 32. PageID #: 20 g. Whether Defendants were unjustly enriched by their acts and omissions, at the expense of Plaintiff and the Class; h. Whether Defendants made material misrepresentations of fact, or omitted to state material facts to Plaintiff and the Class, regarding the manufacturing, marketing, promotion, and advertising of the Product, which material misrepresentations or omissions operated as fraud and deceit upon Plaintiff and the Class; i. Whether Plaintiff and the Class have sustained damages as a result of Defendant s actions; and j. Whether the actions of Defendants were willful and malicious, or manifested with knowing and reckless indifference and disregard toward the rights of Plaintiff and the Class. 74. Typicality: Plaintiff s claims are typical of the claims of the proposed Class, as Plaintiff and all Class members purchased the Product after exposure to the same material misrepresentations and/or omissions appearing the Product s bottle label, Defendants websites, and/or other forms of advertising. Plaintiff and Class members have suffered the same injury as a result. Plaintiff is advancing the same claims and legal theories on behalf of himself and all absent members of the Class. 75. Adequacy: Plaintiff will fairly and adequately represent and protect the interests of the Class. Plaintiff has retained counsel highly experienced in prosecuting class actions, including actions involving consumer goods and dietary supplements. Plaintiff and his counsel are committed to vigorously prosecuting this action on behalf of Class members and have the resources to do so. Neither Plaintiff nor his counsel have any interests adverse to those of the Class. 76. Superiority: A class action is superior to all other available methods for the fair and efficient adjudication of this controversy. Because of the relatively small size of the individual Class members claims, absent a class action, most Class members would likely find

21 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 21 of 32. PageID #: 21 the cost of litigating their claims against Defendants to be prohibitive. The class treatment of common questions of law and fact is also superior to multiple individual actions or piecemeal litigation in that it conserves the time and resources of the courts and the litigants, and promotes consistency and efficiency of adjudication. The class action device presents no management difficulties and provides the benefits of single adjudication, economy of scale, and comprehensive supervision by a single court. COUNT I (Violations of RICO, 18 U.S.C. 1962(c and (d, on Behalf of the Nationwide Class 77. Plaintiff incorporates the allegations set forth above as if fully set forth herein. 78. At all relevant times, Defendants, and each of them, were person(s, as that term is defined in Section 1961(3 of RICO, 18 U.S.C. 1961(3, and are legally distinct from the enterprise. 79. At all relevant times, Defendants constituted an association-in-fact enterprise, as that term is defined in Section 1961(4 of RICO, 18 U.S.C. 1961( At all relevant times, Defendants, and each of them, willfully and with the purpose to defraud consumers, engaged in fraudulent conduct, including acts constituting (a mail fraud, in violation of 18 U.S.C. 1341; (b wire fraud, in violation of 18 U.S.C. 1343; and (c interstate transportation of money taken by fraud, in violation of 18 U.S.C. 2314, by fraudulently claiming that their Product consisted of 50% or more HCA, when it did not. 81. As a result of the foregoing fraudulent activities, Defendants have engaged in a pervasive pattern of unlawful and unfair business practices, causing harm to Plaintiff and the members of the Nationwide Class. Defendants fraudulent conduct, as described above, constitutes a scheme or artifice to defraud Plaintiff and Nationwide Class members

22 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 22 of 32. PageID #: In furtherance of and for purposes of executing the above-described fraudulent and illegal course of conduct and scheme to defraud, Defendants, either individually or in combination with themselves, used, and caused to be used, the U.S. mail by both placing, and causing to be placed, letters, marketing and sales materials, advertisements, agreements and other matters in depositories and by removing, or causing to be removed, letters and other mailable matters from depositories, in violation of the mail fraud statute, 18 U.S.C In furtherance of and for purposes of executing the above-described fraudulent and illegal course of conduct and scheme or artifice to defraud, Defendants, either individually or in combination with themselves, used, or caused to be used, interstate wire communications to transmit or disseminate false, fraudulent, and misleading communications and information, in violation of the wire fraud statute, 18 U.S.C Defendants use of interstate wire facilities included advertising the Product through labeling, commercials, and Internet postings, as well as interstate telephone calls from Plaintiff and Nationwide Class members who were seeking to purchase the Product and/or complain about Defendants deceptive and fraudulent labeling and advertising of the Product. 84. In furtherance of and for purposes of executing the above-described fraudulent and illegal course of conduct and scheme or artifice to defraud, Defendants, either individually or in combination with themselves, transported, transmitted, or transferred in interstate commerce, money, of the value of $5,000 or more, representing the proceeds of sales of the Product to consumers, knowing the same to have been taken by fraud from Plaintiff and Nationwide Class members. 85. Each of the numerous mailings, interstate wire communications, and interstate transportations that were made in furtherance of Defendants scheme to defraud Plaintiff and

23 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 23 of 32. PageID #: 23 Nationwide Class members constitute separate and distinct acts of racketeering activity, as that term is defined in Section 1961(1 of RICO, 18 U.S.C. 1961( The fraudulent and deceptive activities engaged in by Defendants, and each of them, in marketing the Product to Plaintiff and Nationwide Class members, involve and affect interstate commerce. As alleged herein, Defendants manufacture, market, sell, and deliver the Product throughout the United States. 87. By committing such offenses, which victimized Plaintiff and thousands of Nationwide Class members, and which offenses continue today and are likely to continue in the future, Defendants, and each of them, have engaged in a pattern of racketeering activity, as that term is defined in Section 1961(5 of RICO, 18 U.S.C. 1961( At all relevant times, Defendants, and each of them, have conducted or participated, directly or indirectly, in the management and operation of an enterprise, namely, the association-in-fact identified in 49 above, through a pattern of racketeering activity, in violation of Section 1962(c of RICO, 18 U.S.C. 1962(c. 89. At all relevant times, Defendants, and each of them, have conspired to conduct or participate, directly or indirectly, in the management and operation of an enterprise, namely, the association-in-fact identified in 49 above, through a pattern of racketeering activity, in violation of Section 1962(d of RICO, 18 U.S.C. 1962(d. 90. As a direct and proximate result of Defendants racketeering activity, Plaintiff and Nationwide Class members who purchased the Product have been injured in their business or property and, therefore, have standing to sue Defendants and recover damages and the costs of bringing this class action under Section 1964(c of RICO, 18 U.S.C. 1964(c

24 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 24 of 32. PageID #: By virtue of their violations of Section 1962(c and (d of RICO, 18 U.S.C. 1962(c and (d, Defendants, and each of them, are jointly and severally liable to Plaintiff and Nationwide Class members for three times the damages that Plaintiff and Nationwide Class members suffered as a result of Defendants scheme to defraud. COUNT II (Violations of OCPA, Ohio Rev. Code , et seq., on Behalf of the Ohio Sub-Class 92. Plaintiff incorporates the allegations set forth above as if fully set forth herein. 93. At all relevant times, Defendants, and each of them, were person(s, as that term is defined in Section of the OCPA. 94. At all relevant times, Defendants constituted an association-in-fact enterprise, as that term is defined in Section (C of the OCPA. 95. At all relevant times, Defendants, and each of them, were employed by or associated with the enterprise and each Defendant conduct[ed] or participate[d] in, directly or indirectly, the affairs of the enterprise through a pattern of corrupt activity, in violation of Section of the OCPA. 96. At all relevant times, Defendants acts and omissions as alleged herein constitute a [p]attern of corrupt activity, as that term is defined in Section (E of the OCPA. 97. Section (I of the OCPA defines [c]orrupt activity as engaging in, attempting to engage in, conspiring to engage in, or soliciting, coercing, or intimidating another person to engage in certain acts specified in Section (I, including, under Section (I(1 of the OCPA, [c]onduct defined as racketeering activity under the Organized Crime Control Act of 1970, 84 Stat. 941, 18 U.S.C. 1961(1(B, (1(C, 1(D, and 1(E, as amended

25 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 25 of 32. PageID #: At all relevant times, Defendants, and each of them, willfully and with the purpose to defraud consumers, engaged in fraudulent conduct and racketeering activity, which, under 18 U.S.C. 1961(1(B, includes acts indictable under 18 U.S.C (mail fraud and acts that are indictable under 18 U.S.C (wire fraud, by fraudulently claiming that their Product consisted of 60% HCA, when it did not. 99. At all relevant times, Defendants acts and omissions as alleged herein constitute a [p]attern of corrupt activity, or multiple predicate acts perpetrated by them individually and in concert, from at least 2012 until the present. These acts included conspiracy, wire fraud, and mail fraud, as more fully set forth herein In devising and implementing this fraudulent scheme, Defendants defrauded Plaintiff and the other Ohio Sub-Class members with respect to the production, distribution, advertising, labeling, marketing, and sales of the Product in the ways detailed in this Complaint and, in so doing, repeatedly and continuously violated the OCPA At all relevant times, Defendants violations of the Ohio RICO statute were deliberate, willful, knowing, and premeditated In devising and implementing their scheme to defraud Plaintiff and other Ohio Sub-Class members with respect to the Product, Defendants communicated with one another and with other affiliated companies using the telephone wires, the U.S. mail, electronic , shared electronic communications, and databases In furtherance of and for purposes of executing the above-described fraudulent and illegal course of conduct and scheme to defraud, Defendants, either individually or in combination with themselves, used, and caused to be used, the U.S. mail by both placing, and causing to be placed, letters, marketing and sales materials, advertisements, agreements and other

26 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 26 of 32. PageID #: 26 matters in depositories and by removing, or causing to be removed, letters and other mailable matters from depositories, in violation of the mail fraud statute, 18 U.S.C In furtherance of and for purposes of executing the above-described fraudulent and illegal course of conduct and scheme or artifice to defraud, Defendants, either individually or in combination with themselves, used, or caused to be used, interstate wire communications to transmit or disseminate false, fraudulent, and misleading communications and information, in violation of the wire fraud statute, 18 U.S.C Defendants use of interstate wire facilities included advertising the Product through labeling, commercials, and Internet postings, as well as interstate telephone calls from Plaintiff and Ohio Sub-Class members who were seeking to purchase the Product and/or complain about Defendants deceptive and fraudulent labeling and advertising of the Product In furtherance of and for purposes of executing the above-described fraudulent and illegal course of conduct and scheme or artifice to defraud, Defendants either individually or in combination with themselves, transported, transmitted, or transferred in interstate commerce, money, of the value of $5,000 or more, representing the proceeds of sales of the Product to consumers, knowing the same to have been taken by fraud from Plaintiff and Ohio Sub-Class members As a result of Defendants conduct, Plaintiff and the Ohio Sub-Class have been injured, including economic losses and other damages. Accordingly, if Plaintiff establishes the elements of an OCPA violation, Plaintiff and the members of the Ohio Sub-Class have a right of action against Defendants pursuant to Section (E of the OCPA, which states that any person directly or indirectly injured by conduct in violation of section of the [OCPA] or

27 Case: 1:16-cv DAP Doc #: 1 Filed: 01/20/16 27 of 32. PageID #: 27 a conspiracy to violate that section... shall have a cause of action for triple the actual damages the person sustained As a direct and proximate result of Defendants corrupt practices, Plaintiff and the Ohio Sub-Class members have each suffered damages, and continue to suffer damages, in an amount to be determined more precisely at trial. COUNT III (Violations of OCSPA, Ohio Rev. Code , et seq. on Behalf of the Ohio Subclass 108. Plaintiff incorporates the allegations set forth above as if fully set forth herein Defendant s business acts and practices and/or omissions alleged herein constitute unfair and deceptive acts or practices under OCSPA, Ohio Rev. Code , et seq., which was enacted to protect the consuming public from those who engage in deceptive or unfair acts or practices in the conduct of any consumer-oriented business, trade, or commerce The practices of Defendants, as described herein, were specifically directed to consumers and violate Section (A-(B of OCSPA for, inter alia, one or more of the following reasons: Advertising goods... with intent not to sell them as advertised. * * * Representing that [the Products have]... performance characteristics,... uses [or] benefits... which they do not have... * * * Representing that [the Products] are of a particular standard, quality or grade... if they are of another Defendants claim that the Product consists of 60% HCA lacked and lacks substantiation, in violation of Section (A of OCSPA vis-à-vis Ohio Admin. Code, 109: