Dietary supplement company sues website for providing a forum for dissatisfied customers


#1

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#2

"[T]heir terms of service forbid their customers from ever complaining…

I would love to see this go to court and this particular “term” in service clauses get thrown out completely for all companies. I’m assuming, of course, that the judge will be familiar with the First Amendment, which may be a generous assumption on my part.


#3

with roberts, scalia, alito, and thomas with a tendency to be pro-business and pro-contract (just look at their rulings in support of forced mediation clauses) plus breyer who rarely finds a business model he can’t love, i wouldn’t wish for this case too hard. you might find it the law of the land for the next 20-40 years.


#4

Will stupid ever be fixed?
FUCK NO!


#5

Ummm… Communications Decency Act section 320? Whatever is left after that is the deeply vague ‘well, what they are doing might make it easier for somebody who isn’t them to do a thing that they allegedly agreed not to do’ nonsense.

Also, wouldn’t it be, um, a pity, if the FDA were to catch sight of a product overtly claiming the same effect as a gastric bypass? You can sell basically any ‘food supplement’ your heart desires; but you have to recite the ‘quack miranda’ when you do so, which involves the (dubiously sincere; but nevertheless asserted) ‘not intended to treat, cure, or diagnose any disease, etc, etc.’ stuff.


#6

This is not a First Amendment issue. The Bill of Rights limits the actions of Congress, and by extension the states. It does not guarantee you have the right to say whatever you want, wherever you want, nor does it guarantee that somebody will build a website where you can say it.

IANAL, but I think tort law is at issue. It is perfectly legal for you to sign a contract that forbids you to talk about something. This is what nondisclosure contracts do, as well as out-of-court settlements that include a gag clause. But holding a website responsible for policing the speech of its users is very very dubious. It would pretty much run every discussion forum out of business, as well as Facebook, Twitter, and their ilk. Suits like this have been brought before and they never win.


#7

Not all contract terms are enforceable… You can’t, for instance sell yourself into slavery, as people did in the late Roman Empire I believe these terms may well rise to the “unconscionable” standard that would make them unenforceable.


#8

The quack Mirandaization requirement needs to be updated. For instance, if there’s no independent study verifying the claims/indications for a supplement, it needs to be printed in unmistakable and large font on the container. As it is, the requirements are just that they have to say (paraphrased) “the FDA hasn’t done any investigation on this crap you’ve bought, and we gotta say so”.

There should be additional mandatory information, like whether or not this supplement has been tested under NIST or ANSI standards for any kind of acute toxicity. Another good one would be requiring standards of purity that get enforced. That way homeopathic remedies can’t lie and say “12C” potency when what it actually is 99.9999% water, 0.0001% glass that’s worn off from the inside of the container.


#9

Pretty rare to find a contract term unconscionable or contrary to public policy, but this one just might do it all right. I seem to recall my contracts professor suggesting a “whether a reasonable person would say ‘you’ve got to be kidding’” standard. Yeah, they’ve got to be kidding.

As a contract case, it’s unlikely to find its way to the U.S. Supreme Court.


#10

I’ve explained previously that IANAL, but I’ll mention it again.
(Right before I say that these guys are real a$$holes.)

So, here we go (sorry this is long!):

Contracts that forbid you to talk about something if it’s something like a “nondisclosure agreement” are legal because those deal with anti-trust and competition laws and the contracts you make as an employee to not act against your employer. (You benefit by being a paid employee, and the employer benefits from the protection added when releasing corporate secrets to you.)

Non-disclosures reached as a part of arbitration usually apply to both parties, and are part of the settlement - prior to that, people can talk. Judges do love arbitration, and may force you to go to arbitration rather than sue (see this 2008 Mother Jones article) if it is included in a contract - even one you haven’t personally signed (for example by accepting employment, using software, or buying a product).

This is a little different. This is an abusive company with a seriously questionable contract. The reason why it’s questionable is because it is so very much in favor of the company. Contracts are required to give and take. You can’t provide a pea for a palace, and say it’s a “fair trade”. Just like @simonize said, some contracts are unenforceable. This one most likely is, and if it goes to court, that’ll be a good thing.

I looked up the terms for the Customer Agreement. This is how the company worded their notice for what would happen if you complained (to them) about payment:

The Company cannot guarantee results because your success depends on your usage of The Formula according to instructions and your successful adaptation to new eating habits. You agree that, because The Company makes NO guarantees regarding results, and because of The Company’s clear No Return/No Refund policy (see below), you have NO right to dispute payment for the Formula/Support. You agree that disputing any payment causes damage to The Company and gives The Company the right to seek compensation from you for The Company’s damages. In the event that you dispute payment, then The Company has the unfettered right to revoke the discount you were awarded and you shall be liable to the Company for the full sales price of $1,580 .

So if you so much as call to complain, they’ll charge you in full for what you haven’t received, and may be complaining about the cost of. They even included this wording to warn you against stopping payment.

You agree to CONTACT US FIRST with ANY QUESTION OR CONCERN before contacting your credit card company or PayPal to cancel or dispute payment. The Company retains the right to remedy any concerns you may have and you do not have the right to file a credit card or PayPal dispute. In the event that you file a credit card or PayPal dispute, you agree to authorize The Company to contact the credit card company or PayPal with your express authority to withdraw your dispute with the credit card company or PayPal. You may incur additional charges when filing dispute charges and agree to pay these charges if the company must remedy the situation with your banking institution. A charge of $80 filing fee will be added for each dispute filed against any payments made to the company which are disputed.

This is where they say you’re not allowed to make any negative statements about the company AT ALL:

(5) You agree that, regardless of your outcome, you WILL NOT speak, publish, print, blog or write negatively about The Product or The Company in any forum.

Any violation of this provision of the Agreement is deemed a material breach and you agree that The Company has no adequate remedy at law. You further consent to and agree to entry of an injunction by a Court of competent jurisdiction in enforcement of your violation of this term and condition.

(6) If you breach this Agreement, you agree to pay the full price for The Formula within 3 business days of demand, plus any expenses we incur in resolving the issue. In addition, we retain all legal rights and remedies against you for breach of contract and any other appropriate causes of action.

They repeat it again:

Agreement Not to Comment Negatively

You understand and are aware that you are required to dose the formula, to drink large quantities of liquids, to avoid calorie-rich foods, to avoid overeating and to overcome psychological obstacles in order to achieve results. You are also aware that The Company does not guarantee success. Therefore, unless you purchased The Formula at full price, (1) no claim or complaint whatsoever will be accepted regarding the lack of success of The Formula, the service provided, the price, or any other negative comments relating to your purchase; (2) the announcement, writing, or publication of any such or other claim in any media or forum will constitute a breach of this agreement, to which you entered willingly and with full knowledge of the components of The Formula and its properties and The Support; (3) You agree that any such negative claim will constitute defamation per se, entitling The Company to injunctive relief and damages;

You agree that this clause is a material clause, and The Company relies on your agreement to these terms as a condition to offering and accepting from you a discounted price. Do not purchase the Formula or Support if you do not agree to this “No Negative Comment Clause.”

Here’s the problem with that - people have the legal right to complain - no matter what the price of the product was. It doesn’t matter if I go to a discounted matinee movie and pay less per ticket. If the sound is terrible, I still have the right to complain without my price being raised to nighttime costs, and I can tell my friends about my experience. I can’t be gagged as a customer, and the court should know that disallowing honest discussion about a product (by threatening to dramatically increase a charge) is bullying dissatisfied customers into silence.

You always have the right to complain - honestly. usa.gov even provides samples complaint letters to help people know what to say when dealing with companies.


#11

So it would be against the contract to say “This company sucks because I paid them and they never shipped the product”, but it would (or at least should) be perfectly acceptable to say “I paid them, and I never received the product”. The second statement seems to me to be an objective fact, free of any forced negative connotation. I’m sure the company would disagree, but it would be easier to challenge if reviewers simply stated the facts without emotion.


#12

I would appreciate purity ratings on products as long as I am allowed to have them and do what I wish with them. I’ve received much benefit and relief (cure if I may be so bold) at low cost from substances the FDA does not endorse as being able to treat, cure, or prevent any illness.

Why anyone would buy something that had some attempt to hold the seller harmless for using as directed is beyond me.


#13

Exactly!!! How you say something is just as important as what you say. After all, you’re dealing with a company that makes its money from making borderline claims. If you say nothing false, and nothing negative (offering an opinion, or saying “I believe”), but only state truthfully what occurred, you should be in the clear if it goes to court.

I have a neighbor who (on very rare occasions) calls me when he has trouble with a bank or hospital because he believes I’ll get it resolved faster than he will. He knows he’ll lose his temper, get flustered, and won’t remember what he wants to say or what he shouldn’t say!

People really should take the very good advice to immediately deal with contract conflicts in writing. It gives you time to organize your thoughts, check that you haven’t misspoken, and even have someone else proofread the note if you need it. If a large amount of money is at stake, it just seems reasonable to take the time. You’ll be sitting on hold for an hour if you call anyway, and a postmark will show that you addressed the issue immediately.


#14

wow…that terms of agreement is majorly effed up. these types of anti consumer practices should be illegal and all disgruntled customers should form together and start a class action lawsuit.

the only thing I can say for this POS company in their defense is their product is called “Gastric Bypass Alternative”, not “Viable Gastric Bypass Alternative” and to be fair, anything is an alternative…hitting yourself in the had with a brick is an alternative…you could put all your money in a pile in the yard and burn it as an alternative to a gastric bypass, doesn’t mean it will help you in any way or be a smart decision, probably still a bit smarter then doing business with this company though.


#15

Yep. The old adage rings as true today as it did in the days of patent medicines: “If alternative medicine worked, it would be called medicine”


#16

It sounds like they are trying to have the government restrict the speech of a website through which they have no prior agreement because that website’s speech activities hurt their business. That sounds like the first amendment to me. I also think gag clauses in product agreements should be illegal and unenforceable, and I think there is a pretty clear difference between an NDA that protects proprietary information and a contract clause that prevents customers from complaining about a fraudulent product.


#17

I very much agree, but what I think doesn’t matter. The law might say I’m wrong.


#18

Here’s a related story about a company called Kleargear. Now, what they did was blatantly fraudulent because they added a clause online after a person bought from them, and then tried to use the altered contract to enforce their demand that a negative online review be removed in 72-hours.

I’m including the discussion because it comes from a legal buff, and he was really pissed at the company as well as very happy to see all the negative press their attempt to sue a complaining customer got them. Here’s Ken White writing at Popehat.

One good thing written into the Popehat article is the correct term (which I was blanking on last night) for this type of clause: “non-disparagement clause”. Important to know, because federal judges are looking at them for employees differently than they do “non-disclosure clauses”. In fact, non-disparagement don’t always hold up, because if a person is simply stating “x happened with y consequences” and not being emotional or personally disparaging, a company can’t limit their right to complain. (They also really can’t prevent a person from being upset.) They also can’t control speech protected by the Civil Rights Act.


#19

“Alternative medicine” is still medicine with all of it’s dangers of expectation and sole reliance.


#20

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