Nutraquest Settles N.J.

Nutraquest Settles N.J. Xenadrine Charges

NEWARK, N.J.Nutraquest Inc.,formerly known as Cytodyne Technologies, its owner Robert Chinery and threerelated companies reached a settlement July 11 with the state of New Jerseyregarding marketing and advertising claims made for Xenadrine products. Thesuit, filed in mid-2003, alleged the companies made false and unsubstantiatedweight loss claims for its Xenadrine products, misleading consumers. Under termsof the settlement, the parties will pay a total of $940,000 and agreed to notmake false or misleading claims in advertisements in the future; there was no admission of unlawful conduct by any of thesettling parties.

Nutraquest released a statement noting that the settlementdoes not bar any companies from marketing products for weight loss in thefuture. Although the Attorney Generals office and the Department ofConsumer Affairs monitors and collects consumer complaints, no consumercomplaints were ever filed for any of the products or product advertisements inthe complaint, said Brian J. Molloy, attorney for Nutraquest. On balance, settlementwith the State of New Jersey for less than the litigation costs to defend is,unfortunately, a difficult but sometimes inevitable choice businessmen confrontin todays regulatory environment.

This settlement is the second in the Cytodyne case.Previously, five New Jersey doctors who provided testimonials on Xenadrinessafety and efficacy settled with the state for between $15,500 and $17,500 each.In a statement from the New Jersey Division of Consumer Affairs, Peter C.Harvey, New Jersey attorney general, noted the settlement ensures the defendantscan no longer make unsubstantiated claims in their advertisements. Wereprotecting the publics health and safety by preventing the defendants fromclaiming that a product is safe or effective unless there isscientific evidence to substantiate those statements, he said.

In addition to the financial settlement, the defendants agreedto several marketing stipulations for their future business activities,including not representing that a product alone can cause weight loss withoutthe need for diet or exercise; not misrepresenting the scientific evidence onthe biochemical mechanism, safety or efficacy; not misrepresenting clinicalresults; and not selling a weight loss product without stating that consumersshould first consult with a health care professional and read the product label.