STATES DISTRICT COURT
In the Matter of
FEDERAL TRADE COMMISSION
MOUNTAIN SPRINGS L.L.C., and MAX PEREZ
Attorneys for Plaintiff
Federal Trade Commission
Plaintiff, the Federal Trade Commission ("Commission"), by its undersigned attorney, alleges as follows:
JURISDICTION AND VENUE
1. This is an action under Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), to secure a permanent injunction and other equitable relief, including rescission, restitution and disgorgement, against Defendants' violations of Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52, respecting deceptive acts or practices. This Court has subject matter jurisdiction over Plaintiff's claim pursuant to 28 U.S.C. §§ 1331, 1337(a) and 1345, and 15 U.S.C. §§ 45(a) and 53(b). Venue in this District is proper under 28 U.S.C. § 1391(b) and 15 U.S.C. § 53(b).
2. Plaintiff Commission is an independent agency of the United States Government created by statute (15 U.S.C. § 41 et seq.). The Commission is charged, inter alia, with the enforcement of Sections 5(a) and 12 of the FTC Act, 15 U.S.C.
§§ 45(a) and 52, and is authorized under Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to initiate court proceedings to enjoin violations of the FTC Act and to secure such equitable relief as may be appropriate in each case.
3. Defendant Mountain Springs L.L.C. ("Mountain Springs") is a New York limited liability company. Mountain Springs' principal place of business is located at 125 Park Avenue, 8th Floor, New York, New York. At all times relevant to this complaint, Mountain Springs conducted business in this District.
4. Defendant Max Perez is a manager of Mountain Springs. At all times relevant to this complaint, Max Perez conducted business in this District. Individually or in concert with others, he formulates, directs, or controls the policies, acts or practices of Mountain Springs, including the acts or practices alleged in this complaint.
5. At all times relevant to this complaint, the Defendants maintained a substantial course of trade, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44.
DEFENDANTS' COURSE OF CONDUCT
6. From at least April 1995 until the present, Defendants maintained a substantial course of trade in the sale of una de gato ("cat's claw"), a derivative of the bark of a woody vine (Uncaria tomentosa) of the same name that grows in South America. Defendants sold una de gato under the brand name "Manaxx." Defendants advertised, offered for sale, sold, and distributed Manaxx as a treatment for the prevention of, or cure for, a variety of diseases and conditions. Through the use of advertisements, including testimonials, and telephone sales representations to consumers, the Defendants induced consumers to purchase Manaxx. Manaxx is a "food" and/or "drug" as defined in Section 15 of the FTC Act, 15 U.S.C. § 55.
7. The Defendants represented in television and print advertisements that Manaxx is a "great health breakthrough" that "can do miracles for your health problems." The Defendants have claimed in their advertising that una de gato "has relieved many illnesses in the past and continues to do so for new ones as well"; that una de gato has been "known as a curative since ancient times"; and that una de gato is "a weapon against any immunological problems regardless of their cause."
8. The Defendants have disseminated or caused to be disseminated advertisements containing, among others, the following illustrative statements:
9. In the course of telephone calls with consumers, the Defendants made additional claims regarding una de gato. The script provided to telemarketers states that una de gato is used as a "supplement to improve overall health . . . [i]t also strengthens the immune system." During a call made to (800) 441-4868, a number provided by Defendants to place orders for una de gato, Defendants' agent or representative stated that una de gato prevented diseases from occurring because it strengthened the immune system.
10. In its advertisements Defendants have used testimonials, including the following: "I was taking 'Una de Gato' between '82 and '84. . . the prognosis for my illness was pretty bad but it's been 10 or 12 years now and I'm still here"; "For many years, I could hardly walk because of the discomfort and swelling I had in my leg, and now I walk perfectly"; and "I had skin problems, with a lot of pimples that just would not go away with any remedy, until I started taking Manaxx, and then my skin cleared up in just two weeks."
DEFENDANTS' VIOLATIONS OF THE FTC ACT
11. Sections 5(a) and 12 of the FTC Act, 15 U.S.C. §§ 45(a) and 52, prohibit deceptive acts and practices and the making of false advertisements to induce, or likely to induce, the purchase of "foods" and/or "drugs," respectively, in or affecting commerce.
12. Through the means described in paragraphs 7 through 10, Defendants, individually or in concert with others, have represented, expressly or by implication, that:
13. Through the means described in paragraphs 7 through 10, Defendants, individually or in concert with others, have represented, expressly or by implication, that they possessed and relied upon a reasonable basis that substantiated the representations set forth in paragraph 12, at the time the representations were made. Such representation was, and is, false and misleading. In fact, Defendants did not possess and rely upon a reasonable basis that substantiated the representations set forth in paragraph 12, at the time the representations were made.
14. Through the means described in paragraph 8, Defendants, individually or in concert with others, have represented, expressly or by implication, that clinical and laboratory research demonstrates that una de gato strengthens or reinforces the immune system, effectively treats inflammation, reduces the abnormal irritation of body tissue, and is void of any toxic effects. In fact, clinical and laboratory research does not demonstrate that una de gato strengthens or reinforces the immune system, effectively treats inflammation, reduces the abnormal irritation of body tissue, or is void of any toxic effects. Therefore such representations were, and are, false or misleading.
15. Defendants' representations set forth above were, and are, false or misleading and constitute deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and false advertisements in or affecting commerce, in violation of Section 12 of the FTC Act, 15 U.S.C. § 52.
16. Consumers have suffered substantial injury as a result of Defendants' violations of Sections 5(a) and 12 of the FTC Act, as set forth in paragraphs 6 through 15 above.
THIS COURT'S POWER TO GRANT RELIEF
17. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to issue injunctive and other relief against violations of the FTC Act and, in the exercise of its equitable jurisdiction, to award redress to remedy the injury of consumers, order disgorgement of profits resulting from Defendants' unlawful acts or practices, and issue other ancillary equitable relief.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff requests that this Court:
(1) Enjoin Defendants permanently from violating Sections 5(a) and 12 of the FTC Act in connection with the advertising, offering, sale, distribution, or other promotion of Manaxx, other una de gato products or any food, drug or dietary supplement.
(2) Award such relief as the Court finds necessary to remedy the Defendants' violations of Sections 5(a) and 12 of the FTC Act, including but not limited to disgorgement, rescission of purchases, and refund of money.
(3) Award Plaintiff such other and additional equitable relief as the Court may determine to be proper and just.
Dated: June 24, 1997