Youngevity International, Corp. v. Smith
3:16-cv-00704
S.D. Cal.Oct 30, 2017Background
- Plaintiffs Youngevity International Corp. and Dr. Joel D. Wallach moved for leave to file a fourth amended complaint to add three individual defendants (Pitcock, Casperson, Randolph) and new claims, including Lanham Act false-advertising allegations and breach-of-loyalty/fiduciary-duty allegations.
- Plaintiffs previously filed a third amended complaint with leave of court; this motion was filed within the court’s scheduling deadline.
- Defendants opposed the motion on procedural grounds (failure to attach 53 exhibits required by Civil Local Rule 15.1), for undue delay, and as futile on the merits.
- The contested substantive allegations chiefly assert false or misleading advertising under Section 43(a) of the Lanham Act relating to: (1) Wakaya’s “Plan to a Grand” earnings claims; (2) Calcium Bentonite Clay Powder safety/lead content; (3) BulaFIT Burn! ingredient labeling; and (4) BulaFIT weight-loss efficacy claims.
- The court excused the local-rule exhibits violation for judicial efficiency, found no undue prejudice or bad faith, and evaluated futility under the Rule 12(b)(6) standard.
- The court granted leave to amend, concluding the proposed Lanham Act claims survive futility review as questions of fact for a jury; Plaintiffs must file the fourth amended complaint with all exhibits within seven days and defendants have 30 days to respond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural deficiency (missing exhibits) | Failure was harmless; documents quoted are in defendants’ possession | Motion should be denied for violating Civil Local Rule 15.1 | Court excused violation for efficiency; no undue prejudice, allowed amendment |
| Undue delay / adding new defendants and claims | Motion timely under scheduling order; no bad faith | Delay/prejudice warrant denial | Court found no bad faith or prejudice; timeliness acceptable |
| Lanham Act — "Plan to a Grand" earnings claims | Earnings claims are false/misleading and actionable | Statements are true or non-actionable puffery/generalities | Court: falsity/misleadingness is a factual question; claim not futile |
| Lanham Act — Product safety/health claims (clay, turmeric, BulaFIT) | Advertising claims are misleading (e.g., "AMAZING health benefits" despite alleged toxic lead) | Some claims reflect labeling disclosure; some challenges invoke other statutes (FTC/SDWA) | Court: Plaintiffs intend Lanham Act claims; disputes present factual issues; not futile |
Key Cases Cited
- Bowles v. Reade, 198 F.3d 752 (9th Cir.) (leave to amend denied for undue prejudice/bad faith/futility framework)
- Bonin v. Calderon, 59 F.3d 815 (9th Cir.) (courts weigh futility more heavily than delay)
- Miller v. Rykoff-Sexton, Inc., 845 F.2d 209 (9th Cir.) (futility test same as Rule 12(b)(6))
- Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038 (9th Cir.) (elements of Lanham Act Section 43(a) false-advertising claim and factual-nature of falsity)
- Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir.) (literal falsity vs. misleading-by-implication analysis under Lanham Act)