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REXALL SUNDOWN, INC.
CASE NO. CL 00 7021 AF
JURY TRIAL DEMANDED
Plaintiffs, on behalf of themselves and all others similarly situated, allege upon knowledge with respect to themselves and their own acts and upon information and belief based, in part, on the investigation of counsel, as follows:
i. This is a consumer class action against Rexall Sundown, Inc. ("Rexall" or "the Company") seeking to recover damages for Rexall's deception, misrepresentation, false, misleading and unconscionable statements and practices in connection with the labeling, point-of-purchase marketing, and sale of an over-the-counter product known as Cellasene. Cellasene is labeled as a so-called "dietary supplement" which falsely is alleged to eliminate cellulite. This action is brought on behalf of all consumers in Florida and elsewhere who purchased Cellasene distributed by Rexall and expended many millions of dollars in doing so. Indeed, upon information and belief, during the last two years, since its introduction, Rexall has generated over $70 million in Cellasene sales with an annual projection of $300 million in sales.
ii. Patricia LaRaia is and at all relevant times has been a resident of Broward County, Florida. Plaintiff purchased Cellasene in Broward County during the Class Period as defined below. Ms. LaRaia used Cellasene in accordance with Rexall's instructions, but it failed to reduce cellulite.
iii. Chris Harrison is and at all relevant times has been a resident of Broward County, Florida. Plaintiff purchased Cellasene in Broward County during the Class Period as defined below. Ms. Harrison used Cellasene in accordance with Rexall's instructions, but it failed to reduce cellulite.
iv. Rose Carter is and at all relevant time has been a resident of South Carolina. Ms. Carter learned about Cellasene in mid-March, 1999 while watching an "infomercial" on television wherein persons portrayed as doctors and nurses endorsed the product and showed tapes purporting to show actual persons and the results they had obtained using Cellasene. Ms. Carter purchased three boxes of Cellasene during 1999 at a cost of $118.85 per box. She used the Cellasene in accordance with Rexall's instructions, but it failed to reduce cellulite.
v. Theresa Haney is and at all relevant times has been a resident of Pennsylvania. Ms. Haney purchased over 15 boxes of Cellasene during 1999 and the first half of 2000 at a cost of $39.99 per box. She used the Cellasene in accordance with Rexall's instructions, but it failed to reduce cellulite.
vi. Janet Villa is and at all relevant times has been a resident of New Jersey. Ms. Villa purchased three boxes of Cellasene on the internet during 1999 and the first half of 2000 at a cost of $120.00. She used the Cellasene in accordance with Rexall's instruction, but it failed to reduce cellulite.
vii. Edmund Perry is and at all relevant times has been a resident of Cherry Hill, New Jersey. Plaintiff purchased Cellasene in New Jersey during the Class Period as defined below. He used the Cellasene in accordance with Rexall's instruction, but it failed to reduce cellulite.
viii. Defendant Rexall is a corporation organized and existing under the laws of the State of Florida, with its principal place of business at 851 Broken Sound Parkway NW, Boca Raton, Palm Beach County, Florida. Previously a publicly held company listed on the Nasdaq National Market from 1993 to 2000, Rexall was acquired in 2000 and is now a wholly-owned subsidiary of Koninklijke Numico, NV, a Netherlands Company ("Numico"). Prior to 1985, the Defendant company operated under the name "Sundown." "Rexall" was the then trade name for a chain of Rexall Drug Stores, which chain was founded in 1903 and consisted of over 25,000 stores nationwide. In 1985, the Defendant purchased the Rexall trade name, changed its corporate name, and used the Rexall name to market its line of nationally branded products, including Cellasene. As a result of the old Rexall drugstore business, the name still retains substantial credibility with pharmacy consumers for "a tradition of excellence, quality and value."
ix. Rexall develops, manufactures, markets and sells vitamins, herbal, nutritional supplements and consumer "health" products. It is the largest "seller of vitamins in the United States," according to Carl De Santis, the Chairman/Founder of Rexall. As a result of aggressive marketing and promotional efforts, it has emerged as a leader in the growing nutritional supplement industry. Rexall has capitalized on various contemporary media-driven concerns of Americans, including physical appearance, aging and nutrition. Rexall's products include, inter alia, Cellasene, BiosLife 2, Cholesteral, Bio C, Cardio Basics, Cellular Essentials and Osteo Bi-Flex.
x. Rexall sells many of these and other products through various retailers nationwide, and through a pyramid marketing scheme known as Rexall Showcase International ("RSI"), which is presently under investigation by Florida's Attorney General and the Federal Trade Commission. In addition to its wide-ranging pyramid marketing activities, RSI has induced large numbers of healthcare practitioners to sell Rexall/RSI products through their offices. See, e.g. "A Doctor's Guide to RSI," purportedly published and distributed by an RSI distributor, Eddie Stone.
xi. RSI is one of Rexall's seven operating subsidiaries and is its multi-level or pyramid marketing arm. It distributes more than 100 different products (including those listed above) many of them advertised and promoted as "food supplements," "arthritis" fighters and other cure-all types of products leading, purportedly, to a healthier life. RSI accounted for approximately $170 million of Rexall's annual revenues (at wholesale) in fiscal 1999. Approximately one-quarter of RSI's 30,000 "distributors" are in the healthcare field, including doctors, nurses, druggists and chiropractors.
xii. At all times material to this action, Rexall was acting directly and/or through its agents, "consultants," workers, employees and representatives who were acting within the scope of their employment for and/or on behalf of the business of Rexall and under its control or right to control.
xiii. At all times material to this action, Rexall was engaged in the business of designing, manufacturing, selling, distributing, advertising, promoting and/or marketing of vitamin/mineral supplement and similar products, including Cellasene.
percent of women, and a smaller percentage of men, all shapes,
sizes and ages, suffer from cellulite. Cellulite is the name
given to the lumpy, irregular fatty deposits that appear as dimpled
skin around the hips, buttocks and thighs. Cellulite begins to
form during puberty, although it is not always noticeable on
younger adults because their skin is more supple. Due to biological
make-up, nearly all women will develop noticeable cellulite at
some point in life, including slim, fit and otherwise healthy
women. Some men, a much lower percentage than women, also develop
xvi. According to Rexall, "Cellasene is not a diet product but a unique nutritional supplement that works over time at the source of the problem to help eliminate cellulite below the surface of the skin where it begins. This so-called unique formula of plant extracts and other purportedly beneficial dietary supplements is said to nourish connective tissue from within and arguably helps reduce cellulite. The herbal ingredients in Cellasene purportedly work to increase blood circulation, reduce fluid buildup, and strengthen collagen, the supportive structure of a women's thighs and buttocks."
xvii. Cellasene was originally formulated by an Italian pharmaceutical chemist, Gianfranco Merizza, and marketed by his company, Medestea Internazionale S.R.L. ("Medestea"). Cellasene was purportedly clinically tested and evaluated by Professor Giovanni Boronni and the Sant' Angelica Scientific Team in Turin in collaboration with the University of Pavia in Milan. At the time of Rexall's introduction of Cellasene in the United States in May 1999, Rexall touted a so-called "Expert Scientific Paper on Cellasene" and the test results purportedly obtained in Italy demonstrating the purported benefits of Cellasene and its effectiveness at reducing Cellulite.
xviii. Rexall claims Cellasene is a proprietary blend of a natural herbal extracts called Lipovascolen. Its purported active ingredients are dried ginko biloba leaf extract; dried sweet clover extract; grape seed (vitus vinifera); biflavonoids; dried vesiculosus extract; evening primrose oil; fucus; soya lecithin and natural fish oil. It also contains bladderwrack extract which contains iodine, a potentially hazardous substance.
promotes Cellasene as convenient and easy to use:
xx. Rexall encourages purchasers of Cellasene to buy sufficient quantities for eight weeks' usage, which costs typically about $200:
xxi. Rexall's claims as to the effectiveness of Cellasene include the following statements which appear on Rexall's internet web site:
advertisements also call Cellasene "The One That Works"
and claim that Cellasene is a "clinically studied dietary
supplement" that "actually fights cellulite from the
inside out," and "helps reduce cellulite in just eight
Rexall nowhere discloses that Cellasene contains four times the
recommended dietary allowance of iodine. Iodine is reported to
stimulate the thyroid gland, which stimulation has been associated
with among other things, insomnia, tremors and menstrual irregularity.
xxvii. Likewise, Rexall falsely claims that Cellasene has been subjected to clinical trials, which Rexall also knows is untrue.
xxviii. Notwithstanding the claims made by Rexall, Medestea, Mr. Merizzi and Professor Boronni (who purportedly conducted two small "studies" in Italy that have never been published in any scientific journal), respected researchers, including Dr. Michael Rosenbaum of Columbia Presbyterian Hospital (a leading researcher in fat who has studied why women get cellulite), have determined that Cellasene has no efficacy. According to the these researchers, there is no scientific proof that Cellasene would change the underlying structure to reduce or eliminate cellulite.
xxix. Further, and more significantly, Dr. Maria Lis-Balchin, in an independent study done in Great Britain for the BBC, showed that Cellasene actually increased fat and cellulite. Unlike the "studies" purportedly performed in Italy, Dr. Lis-Balchin's study was double-blind and placebo-controlled. As the efficacy of Cellasene was in doubt, a parallel placebo-controlled clinical study was undertaken in a group of women to see whether the product has any effect on cellulite, or on the body weight, fat content, circumference of thighs, hips, etc. No significant changes were found in these parameters compared with the starting values, nor compared with the placebo control after a two month course of Cellasene, except for an increase in the cellulite, assessed by the author, compared with that existing initially. Seven of eleven women taking Cellasene gained weight, as did eight in the placebo control group, taking Colonease, where significance was achieved. The weight gain in both groups was apparent after the first two weeks, and all women had to reduce their food consumption. Only three of the women in the Cellasene group subjectively thought that their cellulite had slightly improved against two women in the control group.
xxx. Rexall was aware of these studies, and in order to bolster its claims as to the purported efficacy of Cellasene, in May 1999, Rexall and Medestea jointly funded (at a cost of approximately $400,000) a study by Dr. Brian Berman, Professor of Dermatology and Internal Medicine at the University of Miami that was intended to follow the scientific method. The test was to be conducted on 200 women and was to last twenty weeks, ending in February, 2000. The study population was women ages 20 to 49, and according to media reports, half of whom took Cellasene and half of whom took a placebo.
xxxi. Mysteriously, on June 21, 2000, well after the supposed completion date of the University of Miami study, the University issued a two-sentence statement (approved by Rexall's lawyers) announcing that the study was scientifically useless because the participants purportedly did not follow the rules of the experiment.
xxxii. After a long and thorough investigation, the U.S. Federal Trade Commission ("FTC") brought an action against Rexall in the Southern District of Florida alleging deceptive acts or practices and false advertising in connection with the marketing of Cellasene. The case, File No. 00-7016, was filed on the same day as this action and is currently pending before Judge Ferguson.
xxxiii. Plaintiffs bring this case as a class action pursuant to Rule 1.220(b)(2) and (b)(3) of the Florida Rules of Civil Procedure on behalf of themselves and a class consisting of all persons who have purchased Cellasene manufactured and/or distributed by Rexall from the date when it was first sold (approximately March 1999) through the present by Rexall though its distribution network (the "Class" and "the Class Period"). Excluded from the Class are any persons who have commenced Class or representative actions in the State of California which are permitted by the California courts to proceed as a Class action on behalf of a California Class or as a representative action.
xxxiv. The definition of the Class as set forth above is subject to amendment upon completion of discovery.
xxxv. The Class is so numerous as to make joinder impossible.
xxxvi. Plaintiffs' claims involve questions of law and fact common to the Class, because Plaintiffs and the other members of the Class were subject to Rexall's practice of using deception, misrepresentation, and false and misleading labeling, internet advertising and point-of-purchase marketing in connection with the sale of Cellasene. Plaintiffs and the Class are entitled to recover damages and penalties as a result of Rexall's conduct in violation of the common law and of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. §501.02, et.seq., ("FDUTPA"). Since all of Rexall's sales of Cellasene as well as the Company's marketing of it have their origin in Florida, where Rexall is domiciled, the FDUTPA is applicable to all members of the Class including those residing outside Florida. Further, Plaintiffs and the Class are entitled to have Rexall enjoined from engaging in such deceptive and unconscionable conduct in the future.
xxxvii. Common questions of law and fact exist as to all members of the Class and predominate over any questions affecting solely individual members of the Class. Among the questions of law and fact common to the Class are:
xxxviii. Plaintiffs' claims are typical of the claims of the members of the Class, because Plaintiffs and the Class were similarly misled and sustained damages arising out of Rexall's wrongful acts of commission and omission.
xxxix. Plaintiffs will fairly and adequately protect the interests of the Class.
xl. Plaintiffs have retained counsel competent and experienced in class and consumer litigation and have no conflict of interest with other Class members in the maintenance of this class action. In addition, Plaintiffs have no relationship with Rexall except as purchasers of Cellasene. Plaintiffs will vigorously pursue the claims of the Class.
xli. The Class as defined herein is maintainable pursuant to Rule 1.220(b)(1) of the Florida Rules of Civil Procedure in that:
xlii. The Class as defined herein is certifiable pursuant to Rule 1.220(b)(2) of the Florida Rules of Civil Procedure. Rexall has acted on grounds generally applicable to the Class, in that it has acted in a uniform matter with respect to all members of the Class.
xliii. A class action is superior to other available methods for the fair and efficient adjudication of this controversy because joinder of all members is impracticable. Furthermore, because the monetary damages suffered by individual Class members may be relatively small, the expenses and burden of individual litigation make it impracticable for the Class to individually seek redress for the wrongs done to them. Plaintiffs believe that Class members, to the extent they are aware of their rights against Rexall as alleged herein, would be unable to secure counsel to litigate their claims on an individual basis because of the relatively small nature of individual damages, and that a class action is the only feasible means of recovery for the Class members. Individual actions would also present a risk of inconsistent decisions, even though the conduct of Rexall has been uniform with respect to each Class member.
xliv. Plaintiffs envision no difficulty in the management of this action as a class action.
xlv. Damages may be calculated from the sales information maintained in Rexall's records, and from those retailers which sell Rexall products, so that the cost of administering a recovery for the Class can be minimized.
xlvi. Rexall markets and sells vitamin/mineral products and "food supplements" such as Cellasene to consumers such as Plaintiffs who wish to, inter alia, reduce cellulite in their bodies.
xlvii. Despite its labels and point-of-purchase marketing practices, including specifically, product placement and unit pricing labels, which represent falsely to consumers, including Plaintiffs and members of the Class, that Cellasene is safe and effective as a means to reduce or eliminate cellulite. Cellasene is of no proven therapeutic value, does not eliminate cellulite and, according to Dr. Lis-Bachin's study following scientific protocols in 1999, Cellasene may even increase fat and cellulite. Further, due to the product's iodine content, if taken in Rexall's recommended dosages, it may create serious negative health conditions.
upon, inter alia, Rexall's marketing practices, false advertising
and deceptive "test" results from Italy, Plaintiffs
and members of the Class purchased Cellasene. Rexall's false
statements were made to induce Plaintiffs and the Class to make
at least $60 million of such purchases. As a result, Plaintiffs
and the Class were damaged thereby.
Violation of FDUTPA
xlix. Plaintiffs repeat and incorporate the allegation of paragraphs 1 through 48 as if fully set forth herein.
l. The sale of Cellasene to Plaintiffs and the other members of the Class as described herein constitutes the "conduct of any trade or commerce" within the meaning of FDUTPA, Fla. Stat. §§ 501.02 et. seq.
li. Rexall's misrepresentations and material omissions in its marketing and advertising concerning the efficacy and safety of Cellasene as described herein constitute false, deceptive, misleading and unconscionable practices in violation of FDUTPA.
lii. Application of FDUTPA to all Class members throughout the country, regardless of their state or residence, is appropriate because, inter alia:
nationwide sales operations are controlled, directed and originate
from Palm Beach County, Florida;
liv. Plaintiffs repeat and incorporate the allegations of 1 through 48 above as if fully set forth herein.
lv. As a result of the deceptive and unfair sales and marketing practices outlined above, Plaintiffs and the other members of the Class purchased Cellasene, which had and has a negligible value, if any. The revenues flowing to Rexall from the sale of Cellasene inured to the benefit of the Company.
lvi. Rexall has been enriched, at the expense of unwitting consumers nationwide, by profiting from the unconscionable sales and marketing practices described above.
and the other members of the Class, all of whom purchased Cellasene
as a result of Rexall's unconscionable sales and marketing practices
as outlined above, have been damaged as a result of its actions,
and Rexall has been unjustly enriched thereby.
lix. Plaintiffs repeat and incorporate the allegations of 1 through 48 above as if fully set forth herein.
lx. Unless Defendant's unlawful practices are enjoined Plaintiffs and Plaintiff Class will continue to suffer irreparable injury; to this extent, their remedy at law is inadequate, and they are entitled to injunctive and other equitable relief herein requested.
WHEREFORE, Plaintiffs, on behalf of themselves and the Class, pray for judgment as follows:
ii. Declaring that this action is properly brought as a class action pursuant to Florida Rule of Civil Procedure 1.220, certifying the Class described herein, and declaring that Plaintiffs are proper representatives of the Class.
iii. Declaring Rexall to have engaged in unlawful, unfair, deceptive and unconscionable trade practices and enjoining the further commission of those practices.
iv. Awarding Plaintiffs and the other members of the Class restitution and refund of all monies paid for Cellasene, manufactured and/or distributed by Rexall, plus interest thereon.
v. Awarding Plaintiffs and other members of the Class pre-judgment and post-judgment interest as a result of the wrongs complained of herein.
vi. Awarding Plaintiffs and the other members of the Class their costs and expenses in this litigation, including reasonable attorneys' fees, expert fees and other expenses.
vii. Requiring Rexall to disgorge all revenues received through the sale of Cellasene manufactured and/or distributed by it.
viii. Enjoining Rexall from engaging in the deceptive and unlawful trade practices described in their Complaint.
ix. Awarding Plaintiffs and the members of the Class such other and further relief as may be just and proper under the circumstances.
_________________Plaintiffs hereby demand a trial by jury as to all issues so triable.
Dated: March 20, 2001