Fed. Trade Comm'n v. Roca Labs, Inc., 345 F. Supp. 3d 1375

Background

FTC sued Roca Labs entities and principals (Juravin; Whiting) alleging deceptive and unfair advertising, false testimonials, privacy misrepresentations, and use of non-disparagement "gag" clauses in marketing weight‑loss products (Formula, Anti‑Cravings); prelim. injunctions and asset freezes were in place.
Defendants marketed the products online as a "gastric bypass alternative," used medical imagery/terminology, published paid/solicited "success" testimonials and an affiliated site (Gastricbypass.me) without disclosing ownership or payments, and advertised a $480 price while post‑sale paperwork conditioned that price on gag clauses.
FTC alleged seven counts under Sections 5 and 12 of the FTC Act: deceptive weight‑loss claims (including an unsubstantiated 90% success/establishment claim), false/exclusive site representation, undisclosed paid testimonials, privacy misrepresentations (confidentiality of health data), deceptive discounting, and unfairness of gag‑clause practices.
The record included internal testimony, customer declarations, marketing materials, an Roca Labs clinical study (small, flawed), expert reports (FTC experts: obesity/clinical‑trial standards; information systems effect of suppressing reviews), and financial records showing substantial revenues (~$26.6M).
Court granted FTC summary judgment on liability for all counts (I–VII) and denied defendants’ partial summary judgment on Count III (gag clauses). Liability was established against corporate defendants and individually against Juravin and Whiting as controlling actors; damages/disgorgement amount left for supplemental submissions.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are Defendants' weight‑loss and establishment claims deceptive/false (Counts I & II)?	Claims are express, inherently material (health), likely to mislead, and lack competent, reliable scientific substantiation (no valid RCTs; expert testimony that evidence is inadequate).	RCTs not legally required; offered limited studies/articles and an affidavit of a surgeon (Dr. Free) to support claims.	FTC entitled to summary judgment: claims were unsubstantiated/false; defendants produced no competent, reliable clinical evidence.
Did Defendants deceptively present Gastricbypass.me/testimonials (Counts IV & V)?	Defendants failed to disclose ownership and that many testimonials/posts were paid, employee‑generated, or fabricated; these omissions were material and likely to mislead.	Some testimonials reflect genuine past results; site affiliation not dispositive.	FTC entitled to summary judgment: ownership and payment omissions were undisputed and material.
Did Defendants misrepresent privacy/confidentiality of customer health data (Count VI)?	Website promised confidentiality; Defendants disclosed sensitive customer health info to payment processors and in dispute responses.	Disclosures were necessary for payment disputes or the information was publicly available.	FTC entitled to summary judgment: confidentiality promise was false; defendants offered no proof disclosure was necessary or that data were public.
Were discount/price communications deceptive (Count VII)?	Advertising and banner ads created a net impression of a $480 price with no strings; discount conditions and gag clause were buried in hyperlinked T&Cs and not reasonably disclosed.	Customers consented via click‑through; terms were available pre‑purchase.	FTC entitled to summary judgment: net impression was deceptive and the buried disclaimer did not cure it.
Were gag‑clause practices unfair under Section 5 (Count III)?	Suppression of negative truthful reviews and threats/enforcement reduced marketplace information, caused or likely caused substantial injury (economic and informational), not reasonably avoidable, and provided no countervailing benefits.	Gag clauses were contractual (clickwrap) and not illegal; FTC lacked fair notice that intangible or informational harms constitute substantial injury; cost‑benefit analysis required.	FTC entitled to summary judgment: practices were unfair (substantial/likely injury, not reasonably avoidable, no offsetting benefits); fair‑notice and cost‑benefit arguments rejected.
Are Juravin and Whiting individually liable?	They controlled, directed, and participated in the enterprise; funds, operations, and marketing were commingled; they had knowledge and authority.	(Defendants disputed extent of roles/knowledge.)	Court held both individually liable based on common‑enterprise factors and evidence of control/knowledge.
Remedy: Is permanent injunction and disgorgement appropriate and how to calculate?	Injunction warranted due to risk of recurrence; disgorgement measured by unjust gains = net revenues (gross sales minus refunds).	Proposed alternative disgorgement method based on BBB complaints scaled up.	Court ordered permanent injunction; accepted net‑revenue disgorgement measure but found FTC's refund approximation unsupported and required supplemental proof of refunds before fixing amount.

Key Cases Cited

Anderson v. Liberty Lobby, 477 U.S. 242 (establishes summary judgment standard and view of evidence)
United States v. W. T. Grant Co., 345 U.S. 629 (permanent injunction requires cognizable danger of recurrent violation)
FTC v. National Urological Group, Inc., 645 F. Supp. 2d 1167 (false‑advertising/FTC standards for meaning, falsity, and substantiation)
FTC v. Washington Data Resources, Inc., 704 F.3d 1323 (disgorgement measure = net revenue and common‑enterprise analysis)
POM Wonderful LLC v. FTC, 777 F.3d 478 (requirement that establishment claims be supported by adequate scientific proof)
Kraft, Inc. v. FTC, 970 F.2d 311 (express health/safety claims are presumptively material)
Thompson Medical Co. v. FTC, 791 F.2d 189 (advertiser must possess level of proof claimed for establishment claims)
Amy Travel Service, Inc. v. FTC, 875 F.2d 564 (individual liability: knowledge and control standards)
Wyndham Worldwide Corp. v. FTC, 799 F.3d 236 (discussion of unfairness and fair‑notice considerations)