On November 17, 2017, two companies that manufacture nutritional products went to court over claims of false advertising. Nutrition Distribution LLC, filed the suit on July 17. This particular company has filed a number of false-advertising suits against their competitors in recent years. Many of these cases have been settled out of court, but those that have gone to court have mostly been unsuccessful. They have sent hundreds of cease and desist letters and filed more than 70 lawsuits.
Nutrition Distribution (who do business under the name “Athletic Xtreme”) requested a preliminary injunction from Judge John A. Mendez, which would have prohibited Enhanced Athlete from producing, licensing, marketing, or selling any products containing a substance called DNP. Nutrition Distribution’s legal team have accused Enhanced Athlete of advertising a harmful substance as a weight loss drug. Since this weight-loss product is in direct competition with their own weight-loss products, they claimed that Enhanced Athlete had hurt their sales, and therefore owed them money. They have even gone so far as to accuse EA of violating the Racketeer Influenced and Corrupt Organizations act (RICO) by claiming that they were engaged in a long-term fraud scheme.
Enhanced Athlete denies these claims, saying that Dinitrophenol is safe when used as directed. The defendants accuse Nutrition Distribution of running a “shakedown operation”. By this, they mean that the company is in the habit of making legal threats against smaller companies in order to extort money from them. According to EA, smaller companies would rather pay a relatively small settlement than deal with the hassles and costs of a protracted legal battle, and so ND is encouraged to continue with a business model based on legal extortion.
In a statement from the judge (https://www.leagle.com/decision/infdco20171115901) we see that this injunction was denied because the plaintiffs failed to establish a causal link between Enhanced Athlete’s product marketing, and Nutrition Distribution’s lower sales. Also, we see that the law requires the plaintiff to demonstrate “irreparable harm” in order to justify this kind of injunction. Since Nutrition Distribution had failed to demonstrate irreparable harm, the judge could not legally grant the injunction. But there is something else that is almost hidden within the wording of this document, which changes the picture somewhat. The plaintiffs state that “since defendants began selling DNP during the fall of 2016, Our sales of DNP have decreased 38%.
This writer finds it very strange that Nutrition Distribution would sue another company for marketing a product that they also sell. If DNP is as bad as they say, why are they selling it? Perhaps this is why Judge Mendez decided not to grant this injunction.
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