Usana Gets SLAPPed Down

Usana Health Sciences (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.

Comments

[THUMPHREY]

SLAPPs are no laughing matter. Especially when they are using statutes outside of public issues format and individual v individual. Glad this person SLAPPedBACK....

[gofer]

This company has sleazy officers, questionable business practices,
and their share value has lot 50% of it's value in the last year.
This company's in serious trouble.

[thank you,Usana!]

Usana Health Sciences is the best thing that has happened to my family both physically and financially. They are the best products we have ever used which our lab results prove every year...not to mention a better quality of life. The only thing sleazy about the business plan are the people like you and Minkow writing about it. You both obviously don't really know anything about it or how it works. I've read the article in which Minkow describes it. It couldn't be more incorrect. I thought good journalism required good investigative reporting. Dr. Wentz has a PHD in cell immunology and microbiology, has contributed much to society. Oh, by the way, did I mention that he wasn't in prison, either? So go ahead and jump on the band wagon of an ex-con, Mr. Weiss. It seems that you are not very wise, after all. Stocks go up and stocks go down. Usana's intergrity always remains steadfast. Maybe you should try the products. Get the fog out of your brain!

[gofer]

Oh, did I mention that USANA has paid posters to beat their own sleazy drums?