MonaVie Inc., a multilevel marketing company based in South Jordan that sells juices with purported nutritional benefits, has been sued by a California company for $2.75 billion.
The federal lawsuit by San Diego-based Imagenetix Inc. accuses MonaVie of trademark infringement, false advertising and unfair competition. The lawsuit names MonaVie executives, its top distributors and "John Does 1-10,000," whom the lawsuit said were "agents, servants, attorneys and employees" of MonaVie that Imagenetix had not yet been able to identify.
According to documents filed this month in U.S. District Court in Southern California, Imagenetix developed, manufactures and owns the patent to Celadrin, a therapy for inflammation taken orally or applied topically as a cream. Imagenetix sells it over the counter in private labels at places such as Costco, Longs Drugs, Walgreens and Bartell Drugs.
According to the lawsuit, MonaVie has falsely claimed its juice contains Celadrin.
MonaVie President Dallin Larsen said the lawsuit is the result of a misunderstanding between the two companies. "They're supposed to be dismissing it tomorrow," Larsen said Thursday.
The Deseret News left messages with Imagenetix Chief Executive Officer William Spencer and the attorney representing the company to verify whether the lawsuit will be dismissed. Neither of them responded.
The lawsuit contains copies of two news releases that MonaVie released in 2005, claiming the juice contained Celadrin. Imagenetix also referenced a video made by a top distributor claiming that MonaVie contains "esterified fatty acids" the main ingredient of Celadrin. That distributor said he had 600,000 distributors working under him. In March, Imagenetix searched the terms "Celadrin" and "MonaVie" on yahoo.com and discovered more than 10,000 Web pages.
Imagenetix, in its lawsuit, requests a jury trial. The company is seeking punitive damages of $500 million. It estimates the damages Imagenetix has and will continue to suffer to be about $750 million, but the company requests it be tripled to $2.25 billion, or as an alternative, that it be awarded compensatory damages of up to $1 million per wrongful Celadrin claim on MonaVie marketing materials.
The California company also seeks a preliminary injunction to prohibit MonaVie distributors, agents and employees from saying the product contains Celadrin.
Robert FitzPatrick, president of consumer watchdog group Pyramid Scheme Alert, said the requested judgment is one of the largest amounts he's ever heard of in his 10 years of tracking the multilevel marketing industry.
"I think it would take any multilevel marketing company in the world out of business if they got anything close to that figure," he said.MonaVie also is facing a lawsuit by Quixtar North America, a sister company to Amway Corp., a multilevel marketer that also sells nutritional products. MonaVie in March had filed a federal lawsuit in Salt Lake City against Quixtar and Amway, asking the court to rule whether non-compete agreements extend to the companies' distributors. Amway countersued the next day.