| DEBRA VALENTINE General Counsel JEFFERY A. KLURFELD BARBARA CHUN DAVID P. FRANKEL ATTORNEYS FOR PLAINTIFF UNITED STATES DISTRICT COURT FEDERAL TRADE COMMISSION, Plaintiff, v. ENFORMA NATURAL PRODUCTS, INC., Civil Number Plaintiff, the Federal Trade Commission ("FTC"), through its undersigned attorneys, hereby alleges as follows: 1. The FTC brings this action pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), to secure a permanent injunction, rescission of contracts, restitution, disgorgement, and other equitable relief against defendants for engaging in deceptive acts or practices in connection with the advertising, marketing and sale of an alleged weight loss product, the "Enforma System," in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52. JURISDICTION AND VENUE 2. This Court has jurisdiction of this matter pursuant to 15 U.S.C. §§ 45(a), 52 and 53(b), and 28 U.S.C. §§ 1331, 1337(a), and 1345. 3. Venue in this district is proper under 15 U.S.C. § 53(b) and 28 U.S.C. § 1391(b) and (c). THE PARTIES 4. Plaintiff, the FTC, is an independent agency of the United States Government created by statute. 15 U.S.C. §§ 41 et seq. The FTC is charged, inter alia, with enforcement of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52, which respectively prohibit unfair or deceptive acts or practices in or affecting commerce, and false advertisements for food, drugs, devices, services, or cosmetics in or affecting commerce. The FTC is authorized to initiate federal district court proceedings to enjoin violations of the FTC Act and to secure such equitable relief, including consumer redress, as may be appropriate in each case. 15 U.S.C. § 53(b). 5. Defendant Enforma Natural Products, Inc. ("Enforma Natural"), is a Delaware corporation with its headquarters and principal place of business at 16633 Ventura Boulevard, Suite 600, Encino, California 91436. Since approximately 1998, Enforma Natural has been engaged in the sale of the Enforma System and other dietary supplements via mail order. Enforma Natural transacts business in the Central District of California. 6. Defendant Andrew Grey is the President, Chief Executive Office and a director of the corporate defendant Enforma Natural. At all times relevant to this complaint, acting alone or in concert with others, he has formulated, directed, controlled, or participated in the acts and practices of defendant Enforma Natural, including the acts and practices set forth in this complaint. He resides and transacts business in this District. 7. Defendant Fred Zinos has served as Vice President of Sales and Marketing for Enforma Natural. For some of the time relevant to this complaint, acting alone or in concert with others, he helped formulate, direct, or control, or he participated in the acts and practices of defendant Enforma Natural, including the acts and practices set forth in this complaint. For some of the time relevant to this complaint, he resided and transacted business in this District. COMMERCE 8. The acts and practices of defendants, as alleged herein, are in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. DEFENDANTS' COURSE OF CONDUCT 9. Since at least December 1998, defendants have engaged in the advertising, promotion, offering for sale, and sale of a purported weight loss product called the "Enforma System" to consumers located throughout the United States via television and Internet advertising. Consumers may order the Enforma System, inter alia, by calling a toll free telephone number or over the Internet. The Enforma System consists of two different types of capsules called, respectively, "Fat Trapper" and "Exercise In A Bottle." Fat Trapper consists primarily of chitosan, a form of fiber, and Exercise In A Bottle consists primarily of pyruvate, a substance found in the human body. 10. To induce consumers to purchase the Enforma System, defendants have disseminated advertisements of approximately 30 minutes in length ("infomercials") more than 30,000 times since December 1998 on cable and local television stations. The infomercials feature two hosts, former baseball player Steve Garvey, and Lark Kendall, a/k/a Kendall Carson, who is represented to be a nutritionist. In addition, several consumers purporting to recite their personal experiences with the Enforma System ("testimonials") make appearances during the infomercials to endorse the Enforma System. Accompanying this complaint is a separately-bound set of five exhibits. Exhibit 1 is a copy of a videotape of one infomercial for the Enforma System and Exhibit 2 is a transcript of that infomercial. Exhibit 3 is a copy of a videotape of another infomercial for the Enforma System and Exhibit 4 is a transcript of that infomercial. The infomercials include, among others, the following statements or depictions:
11. Defendants also advertise, promote and market the Enforma System via an Internet Web site at www.enformanatural.com. Exhibit 5 is a copy of this Internet advertisement from approximately March 1999. This Internet Web site includes, among others, the following statements:
. . . .
12. Defendants charge approximately $69.90, plus shipping and handling, for 240 capsules of Fat Trapper and 120 capsules of Exercise In A Bottle. Defendants represent in their infomercials and on their Web site that these capsules constitute a two-month supply of the Enforma System. DEFENDANTS' VIOLATIONS OF THE FTC ACT 13. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits unfair or deceptive acts or practices in or affecting commerce. Section 12(a) of the FTC Act, 15 U.S.C. § 52(a), prohibits the dissemination of any false advertisement in or affecting commerce for the purpose of inducing, or which is likely to induce, the purchase of food, drugs, devices, services, or cosmetics. As set forth below, the defendants have engaged and are continuing to engage in such unlawful practices in connection with the marketing and sale of the "Enforma System." 14. For the purposes of Section 12 of the FTC Act, 15 U.S.C. § 52, the "Enforma System" is either a "food" or a "drug" pursuant to Section 15(b) and (c) of the FTC Act, 15 U.S.C. § 55(b) and (c). COUNT ONE 15. Through the use of representations, testimonials, and statements contained in the advertisements, including, but not limited to, Exhibits 1 through 5, defendants have represented, expressly or by implication, that:
16. Defendants did not possess and rely upon a reasonable basis that substantiated the representations set forth in Paragraph 15 above, at the time the representations were made. 17. Therefore, the making of the representations set forth in Paragraph 15 above was, and is, a deceptive act or practice and constitutes false and misleading advertising of a food, drug, device, service or cosmetic in or affecting commerce, in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52. COUNT TWO 18. Through the use of representations, testimonials, and statements contained in the advertisements, including, but not limited to Exhibits 1 through 4, defendants have represented, expressly or by implication, that scientific testing proves that: (a) taking the recommended daily dosage of Exercise In A Bottle causes weight loss without the need to exercise; (b) Fat Trapper prevents the absorption of up to 120 grams of fat (or more than 1,000 calories) per day; and (c) the Enforma System works to cause weight loss. 19. In truth and in fact, scientific testing has not proven that: (a) taking the recommended daily dosage of Exercise In A Bottle causes weight loss without the need to exercise; (b) Fat Trapper prevents the absorption of up to 120 grams of fat (or more than 1,000 calories) per day; and (c) the Enforma System works to cause weight loss. 20. Therefore, the making of the representations set forth in Paragraph 18 above was, and is, a deceptive act or practice and constitutes false and misleading advertising of a food, drug, device, service or cosmetic in or affecting commerce, in violation of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52. CONSUMER INJURY 21. Consumers throughout the United States have suffered and continue to suffer substantial monetary loss as a result of defendants' unlawful acts or practices. In addition, defendants have been unjustly enriched as a result of their unlawful practices. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers, reap unjust enrichment, and harm the public interest. THIS COURT'S POWER TO GRANT RELIEF 22. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant injunctive and other ancillary relief, including consumer redress, disgorgement, and restitution, to prevent and remedy any violations of any provision of law enforced by the FTC. PRAYER FOR RELIEF WHEREFORE, plaintiff requests that this Court, as authorized by Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), and pursuant to its own equitable powers:
Dated: April 25, 2000 Respectfully Submitted, DEBRA A. VALENTINE _______________________________ BARBARA CHUN Attorneys for Plaintiff |