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Cell Tech Sued for False Advertising

The suit below, filed in October 2001, charged Cell Tech International with falsely advertising its algae products. In February 2003, the judge agreed that the advertising had been misleading.


SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF TULARE


TEACHERS FOR TRUTH IN ADVERTISING,

Plaintiff,

vs.

CELL TECH PRODUCTS, INC.,
and DOES 1-100.

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 Case No. 01-197777
(Unlimited Civil)

COMPLAINT FOR UNTRUE OR MISLEADING ADVERTISING (BUS. AND PROF. CODE SECTION 17500) AND COMMISSION OF UNLAWFUL, UNFAIR AND FRAUDULENT BUSINESS ACTS AND PRACTICES (BUS. AND PROF. CODE SECTION 17200).



Plaintiff Teachers for Truth in Advertising, on behalf of the general public, makes the following allegations on information and belief based on an investigation reasonable under the circumstances, except as to those allegations which are alleged on personal knowledge:

NATURE OF THE ACTION

1. This is a consumer action brought on behalf of the general public by Teachers for Truth in Advertising. The action seeks to halt false advertising and obtain restitution on behalf of members of the general public.

2. The action concerns supplements containing blue green algae ("Algae Products"). The Algae Products are sold by Cell Tech Products, Inc. ("Cell Tech"). Cell Tech's flagship product is "Super Blue Green Algae." As detailed below, the representations made by Defendant Cell Tech are false and misleading.

3. Cell Tech markets these Algae Products through Internet advertising, and also through distributors. Cell Tech sells a large volume of products directly to California residents.

4. Super Blue Green Algae and similar Algae Products are aggressively marketed to the California general public with blatantly false advertising as described more fully herein. The advertising is uniform, deceptive, unlawful, and unfair. Plaintiff seeks permanent injunctive relief and restitution.

JURISDICTION AND VENUE

5. This Court has jurisdiction over this action under the California Constitution, Article VI, §10, because this case is not a cause given by statute to other trial courts. This Court has jurisdiction over the defendant because a substantial portion of the wrongdoing alleged in this Complaint took place in California, the defendant is authorized to do business here, the defendant has sufficient minimum contacts with California, and/or otherwise intentionally avails itself of the markets in California through the promotion, marketing and sale of its Algae Products in California, to render the exercise of jurisdiction by California courts permissible under traditional notions of fair play and substantial justice.

6. Venue in this County is proper under California Business and Professions Code §17203 because this Court is a court of competent jurisdiction, and because the defendant conducts substantial business in this County. Plaintiff is informed and believes and thereon alleges that a portion of the sales which give rise to this Complaint occurred in Tulare County.

PARTIES

7. Plaintiff Teachers for Truth in Advertising is a private association of teachers concerned about false advertising and unfair business practices. Plaintiff brings this action as a private attorney general under California's consumer protection laws.

8. Defendant Cell Tech is a corporation which manufactures, markets and sells the Algae Products. Cell Tech is based in Klamath Falls, Oregon.

9. Does 1-100 are individuals, corporations, or other entities which took part in the wrongdoing alleged herein. The true names of Does 1-100 are unknown to Plaintiff at this time. When their identities are ascertained, the Complaint shall be amended to reflect their true names.

FACTUAL ALLEGATIONS

10. Cell Tech markets and sells Super Blue Green Algae and other Algae Products throughout California with uniform and deceptive advertisements, promotions and solicitations.

11. The Cell Tech web page claims that the Super Blue Green Algae is a veritable cure-all. Cell Tech claims the Super Blue Green Algae will maintain a healthy immune system, aid assimilation and digestion of food, increase mental clarity and alertness, and better regulate stress. Cell Tech claims that Super Blue Green Algae is a "superfood" with extraordinary nutritional value.

12. Cell Tech states that Super Blue Green Algae promotes "biomodulation" to ensure better health and "enhance overall performance." Cell Tech claims that Super Blue Green Algae is "Powerful Nutrition."

13. Without adequate scientific foundation, defendant attributes a panoply of miraculous therapeutic benefits to the Algae Products.

14. Cell Tech claims that the Algae Products "Promote normal cholesterol levels."

15. Cell Tech claims that the Algae Products will active "Natural Killer Cells" which will "kill invading microbes and infected or transformed cells." Cell Tech claims that the Algae Products "will trigger the migration of Natural Killer Cells" within two hours.

16. Cell Tech claims that the Super Blue Green Algae "was shown to have anti-cancer properties."

17. Cell Tech claims that the Algae Products "improve the outcome of the treatment for mild traumatic brain injury."

18. Cell Tech claims that the Algae Products "have anti-viral properties, especially with regard to AIDS."

19. Cell Tech claims that the Algae Products have "benefits in cases of chronic fatigue, fibromyalgia, attention deficit disorder, depression, hypertension, and viral infections."

20. Cell Tech also offers Algae Products for pets. The ads for the pet products containing Super Blue Green Algae promise similar health and nutritional benefits for pets. The Internet ad features a misleading testimonial about a starving horse which was supposedly saved by Super Blue Green Algae.

21. At all times, defendant failed to disclose, and continues to fail to disclose, the lack of proper medical and scientific evidence for these claims. Defendant instead claims and implies that its Algae Products are a result of legitimate medical and scientific breakthroughs.

22. In fact, there is no reliable scientific evidence to support any of these claims. The health and nutritional claims made by Cell Tech are false and unsubstantiated.

23. Defendant's representations about the alleged therapeutic and nutritional value of the Algae Products are without scientific foundation and blatantly untrue. Algae has almost no nutritional value. The pills containing the Algae Products are not a significant source of nutrition.

24. Defendant's representations are material to the purchaser and users of the Algae Products and, but for these false representations, the consumers would not have purchased the Algae Products.

25. Defendant's affirmative misrepresentations are further exacerbated by the practice of targeting the sick and the elderly, who are particularly vulnerable to such alternative health claims.

26. At all times, Cell Tech fails to adequately disclose that its Algae Products may contain some level of toxins known as microcystins. The long term health effects of these toxins are unknown. Cell Tech falsely claims its products have been proven safe, and fails to adequately warn of potential toxins found in the ponds from which the Algae Products are harvested. Reputable scientists have recently stated that these toxins may be particularly harmful to children. Cell Tech falsely claims in its advertising and promotional material that since millions of people have eaten the Algae Products, Super Blue Green Algae must be safe. However, the long term effects of these toxins are simply unknown.

27. The Algae Products are sold an extravagant price, and Cell Tech makes substantial profit with its Algae Products from the California general public. According to a recent press release "millions of people have consumed millions of pounds of Super Blue Green Algae produced by Cell Tech." Cell Tech is a publically traded company which reports revenues of tens of millions of dollars per year.

28. The Cell Tech web site allows residents of this county and state to purchase Super Blue Green Algae and similar Algae Products.

FIRST CAUSE OF ACTION

Untrue or Misleading Advertising in Violation of
California Business and Professions Code Section 17500
et seq.

29. Plaintiff realleges and incorporates herein by reference ¶¶1-28 of this Complaint.

30. Through its advertising practices and promotional materials, including the various uniformly deceptive promotions, solicitations, and advertisements created, approved and distributed by it, defendant disseminated untrue and misleading statements and omitted material facts in violation of California Business and Professions Code §§17500, et seq.

31. The advertising and other conduct described herein concerning the Algae Products was "likely to deceive." This false advertising is ongoing and continues to this date.

32. Cell Tech knows or should know that these representations concerning the Algae Products are false and misleading.

33. The representations concerning the Algae Products were made, or caused to be made, before the general public in this state.

34. Such conduct is ongoing and continues to this date.

35. Plaintiff and members of the general public are therefore entitled to the relief available under Business and Professions Code §§17500, et seq., as detailed below in the prayer for relief.

SECOND CAUSE OF ACTION

Unlawful Business Acts and Practices in Violation of
California Business and Professions Code Section 17200
et seq.

36. Plaintiff realleges and incorporates herein by reference ¶¶1-35 of this Complaint.

37. California Business and Professions Code §17200 et seq. prohibits acts of unfair competition, which mean and include any "unlawful ... business act or practice."

38. The policies, acts and practices alleged herein violate numerous provisions of law as set forth below.

39. Defendant's dissemination of uniformly deceptive advertisements and statements violates California Business and Professions Code §17500 et seq.

40. Defendant's acts and practices alleged above violate the Consumer Legal Remedies Act (Civil Code Section § 1770 et seq):

a) The policies, acts and practices engaged in by Defendant and alleged herein were intended to, and did, result in the purchase and usage of Defendants' Algae Products by members of the general public primarily for personal, family or household purposes.

b) The defendant's conduct alleged herein violated and continues to violate the CLRA in the following respects:

1) Section 1770(a)(5) ­ representing that goods have characteristics, uses or benefits which they do not have;

2) Section 1770(a)(9) ­ representing goods with the intent not to sell them as advertised;

41. These acts constitute unlawful business acts or practices based on the above-alleged violations of law.

42. Such conduct is ongoing and continues to this date.

43. Plaintiff and members of the general public are therefore entitled to the relief available under Business and Professions Code §17200, et seq., as detailed below.

THIRD CAUSE OF ACTION

Fraudulent Business Acts and Practices in Violation of
California Business and Professions Code Section 17200
et seq.

44. Plaintiff realleges and incorporates herein by reference ¶¶1-43 of this Complaint.

45. California Business and Professions Code §17200, et seq. prohibits acts of unfair competition, which mean, and include, any "fraudulent business act or practice." Conduct which is "likely to deceive" is "fraudulent" within the meaning of Section 17200.

46. As more fully described above, defendant's acts and practices are likely to deceive, constituting a fraudulent business act or practice.

47. Such conduct is ongoing and continues to this date.

48. Plaintiff and members of the general public are therefore entitled to the relief available under Business and Professions Code §17200, et seq., as detailed below.

FOURTH CAUSE OF ACTION

Unfair Business Acts and Practices in Violation of
California Business and Professions Code Section 17200
et seq.

49. Plaintiff realleges and incorporates herein by reference ¶¶1-48 of this Complaint.

50. California Business and Professions Code §17200, et seq. prohibits acts of unfair competition, which mean and include any "unfair ... business act or practice."

51. As more fully described above, defendant's acts and practices constitute unfair business acts or practices within the meaning of Business and Professions Code §17200, et seq., in that the justification for defendant's conduct, if any, is outweighed by the harm to the general public. Such conduct is also contrary to public policy, immoral, unethical, oppressive, unscrupulous and/or substantially injurious to consumers. Such conduct is ongoing and continues to this date.

52. Defendant knows or should know that the sick and the elderly comprise a significant percentage of the intended users of the Algae Products. Targeting the sick and the elderly with such predatory advertising is immoral, unscrupulous, and otherwise unfair under Section 17200.

53. Plaintiff and members of the general public are therefore entitled to the relief available under Business and Professions Code §17200, et seq. as detailed below.

PRAYER FOR RELIEF

WHEREFORE, plaintiff prays for judgment against Cell Tech as follows:

1. For permanent mandatory and negative injunctive relief in the form of an Order

    a) prohibiting the sale of Super Blue Green Algae and other Algae Products; and/or
    b) requiring appropriate corrective advertising; and/or
    c) prohibiting the deceptive representations alleged herein or any substantially similar representations; and/or
    d) granting other appropriate injunctive relief; and

2. For an Order requiring defendant to locate and pay restitution to all persons within California who purchased Super Blue Green Algae or other Algae Products within the four-year time period preceding the filing of the Complaint; and

3. For an Order granting reasonable fees and costs; and

4. For an Order granting such other and further relief as may be just and proper.

Dated: October 23, 2001

LAW OFFICES OF SHAWN C. HIRSCH
SHAWN C. HIRSCH (188215)
1388 W. Tomah
Porterville, CA 93257
Telephone: (559) 781-1802
Attorney for Plaintiff

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This page was revised on July 25, 2003.