FTC Sues Weight Loss Company Roca Labs Over Gagging Customers

You may recall Roca Labs, the "no surgery" weight-loss food supplement company that really hates being criticized — so much so that they entice their consumers1 to agree to a clause that prohibits them from saying anything negative about the company.  Roca Labs is serious about this clause, using it as a basis to sue (or threaten to sue) a number of critics.

Well, for Roca Labs, things just went from bad to the FTC is suing us in the middle of Florida bad.

In its SEO-by-litigation campaign, Roca Labs has sought to intimidate former customers to enforce a dubious "you-can't-criticize-us" clause in their contracts, suing a consumer complaints website for daring to allow mean things to be posted about Roca Labs, suing Marc Randazza — who coincidentally represents the consumer complaints website — for (among other things) joking about someone putting Roca Labs formula in his kids' Halloween candy baskets2, suing a blogger for describing the company as a "fraud," "scam," and "snake oil," suing witnesses who offered evidence against the company, threatening an internet company for hosting a website that said something mildly negative about the company, so on and so forth.  Roca Labs even earned its own Popehat signal.

So how is Roca Labs' campaign going?  Not very well.  Evidence has been proffered suggesting that:

On top of this, Roca Labs is facing a class-action lawsuit in Los Angeles over its practices.

How could this get any worse for Roca Labs?

This "you can stomach our product just as well as we can stomach criticism!" approach has left a sour feeling in the stomach of the Federal Trade Commission, which coughed up a lawsuit against Roca Labs in Florida today.

The complaint alleges that Roca Labs' advertising was deceptive.  [Update:  The FTC has now moved for a temporary restraining order.  The motion is an easier read than the complaint and it is pure brass knuckles: it seeks to curb Roca's use of its gag clause, prohibit the company from intimidating witnesses, and would require early discovery into the company's finances and practices.  "The Court should halt [Roca Labs'] unfair campaign to whitewash their reputation by suppressing purchasers' negative reviews and stories."  Ouch.]

Well, okay, that's putting it too simply.

Essentially, Roca Labs advertised, among other things, that its product was "scientifically proven to have a 90% success rate" and that it was "possible" to lose up to 21 pounds per month.  These claims were backed by a letter from a "Dr. Ross F." — also known as Dr. Ross Finesmith, who had been barred from practicing medicine after pleading guilty to possession of child pornography — which cited and summarized literature that didn't review or study Roca Labs' products, but instead referenced studies of ingredients which were used in Roca Labs' products.  Roca Labs bolstered the impression that its products were super effective by cloaking itself in an aura of scientific research and medical expertise: through its name ("Roca Labs"), references to its "medical team" and "research center", and usage of photos and videos of people wearing lab coats emblazoned with the caduceus symbol (which also appeared in the company's logo).

The FTC also contends that Roca Labs' gag clause — and the company's practice of offering a financial incentive for positive reviews — contributed to these deceptive practices.  Customers could buy the product without a gag clause, but it would cost approximately three times as much, resulting in "99%" of consumers agreeing to the clause, which prohibited essentially any negative commentary about the product.  One iteration of the clause established a $100,000 penalty and threatened consumers with revocation of the 'discount' and subsequent reports to credit bureaus.

This practice, according to the FTC, deprived consumers of "truthful, negative information" which might have deterred would-be customers from buying their products.  Then, relying on this clause, Roca Labs "threatened complaining purchasers who have sought refunds by telling them that they would be subject to liability for extortion or defamation for threatening to post, or posting, truthful negative reviews about the Defendants, their products, or employees[.]"  In some cases, the company disclosed confidential health information in legal filings and to "credit card processors and banks" when customers issued chargebacks.

Further, in lieu of allowing unfiltered customer feedback to inform customers, Roca Labs provided a financial incentive to customers to provide positive reviews and, when that wasn't enough, faked it.  The company operated a website that advertises Roca Labs' product without mentioning that… it's Roca Labs running the site.  So when the site claims that "we challenged the company's claim to a '90% success rate' by checking some of the 654,000 video results we got when searching for 'Youtube Roca Labs'", that's somewhat misleading.  Although not directly stated in the complaint, this is misleading both because the site is operated by Roca Labs and because those positive videos result from Roca's financial incentive for customers to post reviews and its heavyhanded "don't criticize us" clause in its contract.

So, how screwed is Roca Labs?  Probably pretty screwed.  The company has spent untold sums of its money swatting at gnats — individual customers, bloggers, and websites that had the audacity to criticize it — sewing a whirlwind of controversy and media coverage that, no doubt, brought it to the attention of the FTC.  Even were Roca Labs to eek out a victory in any of its myriad lawsuits against its critics, it would be Pyrrhic: the FTC's motion for a temporary restraining order relies pretty heavily on evidence derived from Marc Randazza's efforts in defending against Roca Labs' campaigns, and Roca Labs' own admissions in prosecuting them.  In seeking to silence its critics, Roca Labs has likely dug its own grave.

This is also, to my knowledge, the first time that the FTC has targeted anti-consumer non-disparagement clauses, which have come under increased scrutiny in recent years.  California has banned them (Civil Code section 1670.8) and there is a similar bill — the Consumer Review Freedom Act — pending before Congress that would outlaw them nationally.  Roca Labs is also one of few — if not the only — companies to actually enforce such a clause, and Roca Labs does so with great (and often meritless) frequency, making it an ideal target for the FTC.  That the FTC is asserting that such non-disparagement clauses run afoul of Section 5 is good news for consumer-critics.

And, oh, how sweet the taste of its own 'medicine' is.3

Update:  Roca Labs has entered into a stipulated temporary restraining order with the FTC, agreeing to end enforcement of its non-disparagement clause, among other things.

Postscript by Ken: Adam kindly offered to let me add a note rather than write my own post. Two points for now:

1. Getting sued by the FTC is no joke. If I ran a company I think I'd rather have it charged criminally; the company would at least get something resembling due process. As I've said in the context of telemarketers, I've never seen federal judges defer to anyone like they defer to the FTC. If the FTC decides to seek preliminary relief here (like preliminary injunctions and asset freezes) it will kill Roca Labs dead before they've even taken discovery.

2. I may be wrong, but I think this may be the first time the FTC has sued a company on the theory that its non-disparagement strategy is illegal. I'll research that. If so, it's huge. Even if it's not the first time, the application here shows how the FTC can punish and deter dodgy companies like Roca that try to suppress criticism.

  1. No offense intended.  
  2. Roca Labs still maintains, against all reason on God's good green earth, that Randazza's joke was defamatory  
  3. I reached out to Roca Labs' proprietor, Don Juravin, and their phalanx of lawyers for comment.  I'll be surprised if they respond — they're fond of feigning outrage over my dumb tweets in court filings — but if they do, I'll update this post.  

Last 5 posts by Adam Steinbaugh


  1. That Anonymous Coward says

    Perhaps they got to much silica in the blood stream and it deposited in their thinking bits.
    It is nice to see the FTC finally take some action about these tactics, but the other side of the sword is that well you can go up until this point and we won't bother with it.
    These sorts of clauses are part of a zero sum game of if we fail to give you proper service, you don't get to tell anyone and spoil our reputation. Reputation is earned, but not at the business end of a lawsuit.
    It is far simpler to give better customer service, than to engage in these sorts of tactics. Regular people are well aware many people are dissatisfied for the sake of trying to get more out of companies, and dealing with them in an open fashion without trashing them shows character that is often lacking in business these days.

    Of course this also leads to the question of why we still allow these sorts of unregulated companies to peddle their 'miracle-cures' with no oversight or fact checking until well after the damage is done.

  2. Mikee says

    Dog bless TDR, Taft, and Wilson. Their bipartisan Progressivism may have created a bureaucratic machine, but the consumer protections we enjoy today mean the benefits far outweigh the negatives.

    And I agree with the point you're trying to make, That Anonymous Coward. I wish more people looked at those warnings 'These Claims Have Not Been Approved By the FDA' and 'Not intended to prevent, diagnose, cure or treat any diseases or ailments' as the only truth the products contain. Hopefully some future Progressives will give the FDA some teeth to prevent this nonsensical bullshit. Preventative medicine is far cheaper, and better, than curative medicine anyhow.

  3. SirWired says

    This is nice and all, but anybody with any experience at all with FTC lawsuits knows that the almost 100%-assured outcome is for Roca Labs to agree to a settlement where they Promise to Go Forth and Sin No More. The financial penalty, if any, will consist of whatever loose change they found under the couch and have not yet shipped off-shore. Consumers will receive little, if any, restitution.

    If they get caught selling terrible diet products a second time, they will receive an additional slap on the wrist with a wet noodle via an identical settlement, with the added twist that they will be barred entirely from selling diet products. At no point will they be required to pay any sort of punitive damages, like normal people would if you rob somebody through outright fraud.

    If they get caught a THIRD time (the FTC repeat-offender rate is high enough to develop conclusions here) the FTC will, (despite what will, at this point, have been YEARS of fraud ripping off consumers that would get even some Wall Street Suit several years in a country-club prison) level the life-altering charge of… Contempt of Court. Not mail fraud, not wire fraud, not extortion, just Contempt.

    Kevin Trudeau is, to my knowledge, the ONLY person the FTC has locked up in decades. And it took over FIFTEEN YEARS of CONTINUOUSLY selling worthless crap to credulous consumers for the FTC to accomplish this. (And his infomercial career only started AFTER he had already served time for a Ponzi scheme. Unlike the FTC, the SEC does not f–k around with rinky-dink toothless settlements before sending you to the clink.)

    When this case settles, and it will. I predict the outstanding suits will be dropped, there will be $12k or so in penalties to be used as restitution, and Roca will (likely falsely) promise to not lie about diet products or sue consumers for complaining about them. The same scammers will be back on the market in a few short months and they'll have to get slapped again before there's even a chance they'll stop scamming people.

  4. says

    Well, SirWired, I tend to believe every commenter on the Internet, but in this case… a quick visit to the FTC site left me with a tough decision — to determine who of you two is more credible:

    Prosecutors who partner with the FTC get significant results. In FY 2014, prosecutors:

    – helped initiate 150 indictments or complaints against FTC-related defendants

    – obtained 44 convictions or guilty pleas with an average sentence of more than 40 months

    Since CLU’s launch in 2003, prosecutors have indicted more than 770 FTC-related defendants and their associates.

  5. David Magnus says

    When the FTC uses the words "outrageously deceptive claims" you know it's going to be a fun time. I was surprised by all the typos in their motion though – haha.

  6. SirWired says

    If you look at the FTC press-release archive, you will find that for most, if not all, consumer-protection settlements, the structure is exactly as I have described. (The criminal prosecutions usually come from lottery scams and other outright theft.)

    The slaps on the wrist includes flagrant violations of obvious rules on Credit "Repair", Debt Collection, Business Opportunity Scams, Fraudulent Diet Plans, Telemarketing, Mortgage Relief, Infomercial Fraud (often involving enrolling people in continuous shipment of junk without their consent), etc.

  7. hanmeng says

    speaking of typos, I amused myself greatly trying to visualise "sewing a whirlwind"

    But not "eek out a victory"?

  8. says

    So after one month they can go back to their previous shenanigans? Does this agreement mean that they won't go after me for telling everyone that their weight loss goop killed Kenny?

  9. JTM says

    It doesn't look like anything in the stipulated TRO benefits Roca Labs (and a Google search suggests that stipulated TROs like this aren't uncommon in FTC litigation). Anyone know what the defendant gets out of stipulating to the TRO, rather than making the FTC get it the hard way?

  10. Dan says

    @Mark Wing,

    So after one month they can go back to their previous shenanigans?

    I think the intent is that, within a month, they will have had the hearing on the preliminary injunction. TROs are supposed to be just that–temporary–and are often issued ex parte on an emergency basis, with the court then reviewing argument from both sides, and generally holding a hearing, before deciding on a longer-term injunction. This one was not ex parte, but still follows that general pattern.

  11. lawmedy says

    On the semi-related subject of Popehat's greatest hits: you guys may have come across this already, but Craig Brittain and Chance Trahan are starting up a new venture, Dryvyng (https://twitter.com/dryvyng) which is supposedly a competitor to Uber and Lyft. They're probably violating securities law before even getting off the ground with the classic one-two punch of (1) general solicitation of unregistered securities and (2) wild claims they likely don't have a reasonable basis for (see http://dryvyng.com/pitch/, specifically the revenue and customer projections). I should give them a little credit, though, because they seem to have added the interesting twist of soliciting investment before even getting their goddamn corporation registered (http://ecorp.azcc.gov/Details/Pending?corpId=L20230830). Don't know if there's a post in it for any of the Popehat writers, but I thought I'd note it for you.

  12. Boundless says

    AC: It is nice to see the FTC finally take some action about these tactics, but …

    Be careful of what you wish for. In my view, the prevalence of weight loss scams is a child of government action, which action has directly resulted in the obesity & T2D epidemics.

    If the FTC were to enforce dietary dogma, it would be the mistaken Dietary Guidelines for Americans, and the USDA's MyPlateOfMetabolicSyndrome. See "Death by Food Pyramid" (Minger) or "The Big Fat Surprise" (Teicholz) for the whole sorry story of how we got here. The proposed DGA'2015 actually tried to make some progress in fixing this mess, and is already under political and lobbyist attack.

    This leaves the populace pretty much on our own in puzzling out how to shed or avoid the pounds (and collateral ailments). Most never figure out that the consensus diet is the real problem, and not some failure to "move more and eat less". This makes the more desperate ripe for picking by charlatans and self-deluded cranks.

    Tip-offs to flag programs to avoid, prima facie, include:
    – secret members-only information,
    – special subscription sauces and potions,
    – non-disparagement agreements, and
    – unwillingness to evolve the program with emerging unconfounded science and new discoveries.

    Disclosure: I work for a dissident diet blog.

  13. andrews says

    Prosecutors who partner with the FTC get significant results. In FY 2014, prosecutors:

    Since CLU’s launch in 2003, prosecutors have indicted more than 770 FTC-related defendants and their associates.

    I suppose it would be rude to divide 770 over 12 years to decide if they are toothless. Particularly because we are comparing apples to grapefruits.

    Prosecutors working with FTC info and bringing criminal charges may be effective. For that matter, the FTC may occasionally be effective; the problem is that you have offered no evidence to support this second proposition.

    Settlements of the "go forth and sin no more" variety do little for the wronged consumers, and my view of Federal trade regulation is somewhat colored by what I see with the major banks and the securitized mortgage fraud industry.

  14. andrews says

    Anyone know what the defendant gets out of stipulating to the TRO, rather than making the FTC get it the hard way?

    Saves money. If you do not stipulate, your atty has to go to court to argue against the order, and both you and he know the outcome already. It just means more work for the atty, fighting something he will not win, and I think most attys already have too much work.

    Sometimes the defending side even reaches out. On more than one occasion I have asked the other side to just send a proposed order so we can avoid a hearing. Why should I have to haul my substantial carcass over to the courthouse when we already know the outcome?

  15. Dawn Day says

    BellaVita Labs does the same disreputable things as Roca. They offer "free bottles" of face creme, which becomes a "free trial", which becomes a nearly $100 charge, monthly, auto renewing, with little recourse for the elderly women when they finally realize what happened.