Usana Gets SLAPPed Down

May. 8.08 | About: USANA Health (USNA)

Usana Health Sciences (NYSE:USNA) is a -- forgive the redundancy -- sleazy Utah company in the nutritional supplement business. As sleazy Utah companies are wont to do, it reacted to criticism by suing the criticizer, Barry Minkow of the Fraud Discovery Institute.

Minkow had prepared an extensive report describing the company's frailities. Well, that certainly would not do. Usana sued, and that great defender of corporate sleaze, Judd Bagley of corporate sleaze palace Overstock.com, chimed in with a typically nauseating mud-sling attack.

So I am delighted to report that today Usana was ordered to pay attorney fees to Minkow under the SLAPP statutes, which punish suers who use the legal system to silence critics.

I can't find a working link to the article -- it has vanished for some reason from the Salt Lake Tribune website -- so here's the Associated Press account of the good news:

The Associated Press
Article Last Updated: 05/07/2008 12:43:10 PM MDT
Posted: 12:44 PM- Vitamin maker USANA Health Sciences Inc. must pay a critic of the multilevel marketing industry who was forced to defend himself against a company lawsuit.
Federal Magistrate Samuel Alba decided Wednesday that USANA owes $142,510 in attorney fees to a San Diego investigator, Barry Minkow, and his Fraud Discovery Institute.
Alba's order came after U.S. District Judge Tena Campbell ruled on March 3 that USANA violated California's anti-SLAPP (Strategic Lawsuit Against Public Participation) law for suing Minkow for fair criticism.
Minkow has assailed USANA for its network marketing business model, once-soaring share price, and series of flaps involving the credentials of top executives and sales associates.
Minkow served eight years in prison for stock fraud before starting the Fraud Discovery Institute. He came out with his first critical report on USANA in February 2007 when he bought "put" options on USANA's stock in a bet the price would fall.
USANA sued him for defamation and stock manipulation, but dropped the defamation claim last summer. It still has one claim pending, for securities manipulation.
USANA and its Chicago-based public relations firm did not immediately return calls for comment.

Congratulations, Barry, and keep up the good work.