Facts

American Behavioral Research Institute, LLC, d.b.a. Relaxium.com (American Behavioral) was a limited liability company headquartered in Boca Raton, Florida, that manufactured and distributed diet supplement products including Relaxium Sleep that were marketed to California consumers. The People of the State of California brought an action against American Behavioral for violations of the California Business and Professions Code.

PLAINTIFFS' CONTENTIONS: Plaintiffs alleged that defendant made or caused to be made written and oral statements on its products advertisements and packaging throughout California that were untrue and/or misleading with the intent to induce the general public to purchase its products from retail outlets, its websites www.Relaxium.com and www.tryrelaxium.com, and elsewhere. Plaintiffs maintained that defendant made these statements either knowing or possessing the reasonable knowledge that they were untrue or misleading. Further, plaintiffs argued that defendant offered a free gift or trial, and the offer did not include a clear and conspicuous explanation of the price that would be charged after the trial ended nor in the manner in which the subscription or purchasing agreement pricing would change upon conclusion of the trial. Additionally, plaintiffs alleged that defendant failed to present the automatic renewal offer or continuous service offer terms of the free trial in a clear and conspicuous manner before the subscription agreement or automatic renewal offer were fulfilled and charged consumer's credit or debit card without first obtaining the consumer's affirmative consent to the automatic renewal offer or continuous service offer terms. Finally, plaintiffs contended that defendant failed to provide to consumers an acknowledgement that included the automatic renewal offer terms or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that was capable of being retained by the consumer, including the required information and disclosures concerning the free trial as required by the California Business & Professions Code.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions.

Result

By stipulated judgment, the court granted injunctive relief by preventing American Behavioral Research Institute, LLC from making or disseminating any statement regarding any nutritional supplement that was false or misleading or has a tendency or capacity to deceive or mislead; representing expressly or by implication that any nutritional supplement can diagnose, mitigate, treat, cure, or prevent any disease unless the representation is true; or making or disseminating any material representation about the nature, attributes, effects, efficacy, benefits, results, or safety of any nutritional supplement unless it was true and not misleading at the time it was made. The court also imposed civil penalties and costs totaling $925,000.

Other Information

There was no admission by American Behavioral Research Institute, LLC of any liability, and no admission or finding that any of its advertisements were misleading