Jay Noland’s try to have the Success By Well being preliminary injunction overturned has been denied.
In favor of dissolving the injunction, Noland had argued {that a} but to be heard Supreme Court docket case meant earlier Ninth Circuit rulings might now not be thought of “good legislation”.
As per the October twenty seventh order, the courtroom wrote it had ‘already addressed (and rejected) these arguments in earlier orders.’
This Court docket is certain to observe present Ninth Circuit legislation, which permits the FTC to hunt an asset freeze, and should not disregard that binding precedent primarily based on guesses about future Supreme Court docket selections.
The courtroom additionally upheld it’s earlier findings;
the FTC was more likely to succeed on two completely different theories of legal responsibility: first, that SBH was working as an unlawful pyramid scheme; and second, that “Defendants violated 15 U.S.C. § 45(a) by misrepresenting the earnings potential of SBH associates”
Moreover, the Court docket rejected the Particular person Defendants’ argument “{that a} receiver and an asset freeze are pointless,” discovering that “in depth injunctive reduction is important to guard shoppers from additional hurt.”
The courtroom rejected the Success By Well being defendant’s try to “undermine” the findings.
One argument put forth by the Success By Well being defendants is gross sales quantity is roaring submit Receivership (emphasis mine).
Particular person Defendants can’t depend on proof of prereceivership gross sales progress as their foundation for in search of dissolution or modification of the preliminary injunction.
As for a way SBH has fared for the reason that receivership got here into impact, the Particular person Defendants are incorrect concerning the information.
Within the introduction to their movement, the Particular person Defendants assert that “[p]roduct gross sales are regular, voluminous, and rising.”
Nevertheless, the only proof of post-receivership gross sales progress cited within the movement is the Receiver’s August 2020 standing report.
That report characterised SBH’s product gross sales as “regular if not voluminous” after which offered the precise gross sales figures.
These figures reveal anemic each day gross sales and weak demand for SBH’s merchandise.
As for gross sales for the reason that Receiver resumed gross sales exercise in Could 2020, the FTC has submitted undisputed proof establishing that SBH “offered $66,558 of product through the interval of Could 11 by September 15, 2020,” consisting of “a complete of 212 orders . . . positioned by 120 distinctive prospects.”
This works out to gross sales of solely $524 per day.
The proof, in brief, means that demand for SBH’s merchandise has evaporated for the reason that Receiver eradicated the recruitment incentives that had been in place when the Particular person Defendants had been working SBH.
Each day income from product gross sales has decreased by roughly 94%.
Ouch. You’ll be able to’t argue with chilly exhausting figures.
One attention-grabbing revelation is Noland arguing he in truth is a multi-millionaire, primarily based on the hope he’d get better $45 million by a pending ‘case “on enchantment”‘.
Noland’s case was dismissed in August 2020 by the Ninth Circuit, leaving Noland with a “adverse internet value”. Or at the very least as on the time the FTC filed its lawsuit in opposition to Success By Well being.
Claims a big variety of Success By Well being associates had achieved “monetary freedom” had been additionally rubbished.
10 months into this case, the Particular person Defendants have solely been in a position to establish a handful of associates (once more, out of a universe of greater than 6,500 associates) who profited from retail gross sales and people earnings had been largely within the three- and four-digit vary.
Maybe probably the most disingenuous defenses raised by Noland, was that the FTC going after him for fraud was a race difficulty (emphasis mine).
Throughout the preliminary injunction listening to, the Particular person Defendants sought to question the FTC’s skilled by suggesting she had as soon as written a tutorial article that in contrast multi-level advertising and marketing companies to the Ku Klux Klan.
In response, the FTC’s skilled defined that she hadn’t made such a comparability—as a substitute, a distinct set of educational researchers had as soon as written an article on that matter and she or he had merely been requested questions on their article on sure events.
When requested why she had been requested questions on their article, she acknowledged that some persons are “intrigued” by it.
Considerably remarkably, the Particular person Defendants now proffer this trade as proof that “this case was and is motivated by racial animus” as a result of “Mr. Noland is an African American govt that has achieved what those that are sympathetic with the KKK assume is unattainable or can’t be defined with out fraud.”
They proceed: “Racial outrage has no place within the courtroom and mustn’t have an effect on this courtroom’s judgment.”
This can be a frivolous argument and the Particular person Defendants’ counsel ought to be ashamed for elevating it.
Placing apart the truth that this episode doesn’t even purport to be an instance of a “false or unsubstantiated declare” by the FTC (which is how the Particular person Defendants characterize it of their movement), the FTC’s skilled didn’t write the article in query or make any constructive feedback regarding its substance.
Being requested a query that touches not directly on the KKK doesn’t magically rework the individual being questioned right into a KKK supporter.
Many of the remainder of the arguments the Success By Well being defendants introduced up had been rejected as a result of they didn’t represent “new proof” (a prerequisite for overturning the injunction).
Plenty of that is primarily based on the truth that the proof was both introduced up through the authentic preliminary injunction listening to (and was rejected), or might have been and wasn’t.
In associated information, the Success By Well being’s counterclaims of their reply to the FTC’s grievance had been dominated “futile” and consequently stricken.
Regardless of the courtroom’s reluctance to difficulty any rulings primarily based on the beforehand referenced yet-to-be-heard Supreme Court docket case, Scott Harris, James Noland, Jr, Lina Noland and Thomas Sacca filed for a keep on October twenty first.
Pending a call on that movement, keep tuned…
Replace fifth December 2020 – The courtroom denied the SBH defendant’s keep movement on December third.
On November twenty seventh the SBH defendants filed a discover informing the courtroom that they’ve appealed the preliminary injunction determination, detailed within the article above, within the Ninth Circuit.