As my readers already know, Medifast is on the hunt for anyone who would dare to say something less than flattering about the company. I’m being sued, along with others, for having a low opinion of Medifast’s Take Shape For Life (TSFL) division. Shame on me for voicing my negative opinion of a multi-level marketing scheme, and Medifast will MAKE ME PAY for daring to oppose them.

I am happy to report, however, that I’m not the only one who questions Medifast’s business model. Last week an article was posted at Fool.com about the amount of short selling activity around Medifast. Short selling is a bet that a company’s stock price will fall, and some like short selling overvalued companies.

It was reported that Medifast has a current short interest of 18.8%, which is said to be high. More than a 5% short interest is often said to be a warning sign that there is something wrong at a company. The writer of the article looked at Medifast’s current ratio, and deemed it very strong. He found that Medifast’s free cash flow has been trailing earnings, but did not deem this a problem with this company. Finally, the author looked at the company’s PEG ratio and determined that it is within line with the company’s expected growth.

What could explain the high instance of shorting Medifast, then? The author says it’s possible investors feel the company is overestimating its growth potential.

In general, the author also says that financial “…red flags like accelerating revenue recognition, aggressive acquisitions to hide underlying financial weakness, and changes in reporting methods can only be spotted by carefully analyzing the notes companies bury deep in their filings.”

In the case of Medifast, its growth is almost solely because of growth in the multi-level marketing Take Shape for Life division. Could this be the problem hidden in the financials? I believe so. Aggressive growth in MLMs is difficult to sustain because it requires a constant stream of recruiting of new distributors into the system.

Medifast has a questionable product with limited appeal. It is a super low calorie plan, made up of mostly powdered foods… just add water!

Sure, diet foods are in high demand, but I don’t think Medifast has one that is all that attractive to most consumers. MLMs use the product as the hook to bring in distributors, although in my research, I have found that the products in MLMs are usually of marginal quality and they truly take a back seat to the sale of the opportunity. (i.e. MLMs are selling the recruiting aspect much more than they’re really trying to sell a product to third-party consumers.)

The predicted growth of the company is closely tied to the ability of TSFL to continue to recruit new coaches at a continued high rate. I don’t think that’s going to happen.

Usana had legitimate business operations set up in Hong Kong, which does not have laws prohibiting multi-level marketing activities. It was alleged that Usana was using the Hong Kong employees to get access to people from mainland China, and show them how to circumvent the laws to participate in MLM.

Oddly enough, Usana’s business in Hong Kong went absolute gangbusters. To the point where it was obvious that something odd was going on. A simple look at the number of active Usana associates per population of any given country shows that things are amiss in Hong Kong.  Depending on the country, you might see one distributor for every one thousand to ten thousand residents of the country. In Hong Kong, however, you see one distributor for every 135 residents.

Looks a little fishy, doesn’t it? And it would seem to give some credence to the allegation that residents of China are being signed up as distributors in Hong Kong. What other explanation could there be for such an astronomically high rate of distributors to residents?

Usana has denied that it was trying to do business in China via Hong Kong.

But now it seems  that Usana has found a legitimate point of entry into China. The company recently purchased BabyCare Ltd., based in Beijing, for  $45 million in cash and 400,000 shares of company stock. And so Usana would seem to be getting around the multi-level marketing rules in China…

You see, China allows “direct selling,” but not MLM. Most MLMs in the United States and abroad like to refer to their business models as “direct selling” (implying that distributors sell the product directly to the customers). This focus on the sale of the product is an attempt to disguise the real business of these companies, which is recruiting new distributors (and recruiting multiple levels of people to sell overpriced  products gives us the “multi” in multi-level marketing).

In China, direct selling is allowed, but there is a strict licensing requirement. There are apparently only 25 such licenses in Beijing, and now Usana has one of them through BabyCare. The company intends to integrate its nutritional products into BabyCare’s lines as soon as they are approved by regulators.

While Usana may still have to be careful with how they structure a compensation plan in China, what really counts is that they’re officially in.

How desperate was Usana to get a foothold in China?  Usana paid $62,716,000 to acquire this company.

And this is a company with only $15 million in annual net sales and $19 million in total assets. The company has not been profitable.

Almost $63 million for an unprofitable company with relatively small annual sales. It looks like that direct selling license is worth tens of millions of dollars to Usana. Congratulations to them. They finally can do business legally in China, and they don’t have to funnel people through Hong Kong anymore!

Medifast General Counsel Michael Tanczyn, Esq. at the deposition of Sam Antar. (click to enlarge)

I am currently on the receiving end of a SLAPP suit, thanks to my good friends at Medifast (NYSE:MED) and their scam-like pyramid-like multi-level marketing division Take Shape For Life (TSFL).

SLAPP = Strategic Lawsuit Against Public Participation

It goes like this… Someone criticizes your company. You get mad. You decide to use your millions or billions of dollars to shut them up. But more importantly, it shuts up anyone else who would dare to criticize you or your company, lest they should also be on the receiving end of a lawsuit they can’t afford to fight.

The case bringing attention to SLAPP suits today involves real estate developer H. Walker Royall, who got mad about a book written on one of his projects. He sued Carla Main, the author, and her publisher, a guy who wrote a blurb praising the book, someone who reviewed the book, and the newspaper that printed the review.

The article about this crazy lawsuit does an excellent job of explaining SLAPP suits and why more legislation protecting those sued is necessary:

SLAPP plaintiffs use the court system to bury opponents in a crush of legal fees and paperwork of Bleak House proportions. They are not about winning damages. They usually don’t expect to be successful, and their targets often don’t have the money to defend the case. For the wealthy like Royall, and corporations equipped with teams of lawyers and swollen legal budgets, the cost-benefit analysis is easy: Foot the expense of a lawsuit through whatever means available — usually a defamation or libel claim — and enjoy the benefit of intimidating current and future critics into silence.

Anti-SLAPP motions in cases such as this generally stop the litigation process all together and force the plaintiff to prove a probability of prevailing – - before the enormous costs of the discovery process begin. In Texas (where this suit is), however, this type of motion isn’t available and the defendant is left to deal with all the legal expenses immediately.

Not many states have anti-SLAPP laws. That’s why a federal anti-SLAPP law would make sense.

In California, where Medifast filed suit against me and my co-defendants, anti-SLAPP motions are supposed to stop the process immediately. In my case, however, the judge made the unfortunate decision of allowing Medifast to conduct discovery before responding to our motion, as the law requires.

What’s so amusing about this is the fact that Medifast asked the court to allow discovery because they couldn’t possibly respond to our motion (i.e. prove their case the way the law requires) without first doing discovery.

Hello! This is the whole point of anti-SLAPP legislation…. to force plaintiffs to know what they’re doing before they file suit against an innocent defendant.  In this case, Medifast alleges defamation… that the defendants said untrue things about the company. The defendants did, indeed, discuss facts and figures about Medifast and their TSFL “coaches.” And pray tell, who is in the best position to know if those facts and figures are true or false? Medifast, of course.

Nonetheless, Medifast successfully argued to the judge that it had to conduct expensive and time-consuming discovery against me before they’d know if they could actually prove their case.

I already know the answer to the question: Medifast can’t prove their case against me because they have no case against me. Everything I wrote about the company was either:

a. A simple reprint of what other authors wrote about the company, posted on my site to give consumers a chance to read it and draw their own conclusions.

b. Absolutely true.

c. A statement of opinion protected under the First Amendment of the United States Constitution.

To make things interesting, Medifast added in allegations of some vast conspiracy between the defendants to harm the company.

I know the answer to that question too: I was not involved in any conspiracy. Working with colleagues on a project of mutual interest does not automatically create a conspiracy. Medifast has zero evidence of my involvement in any conspiracy because no such evidence exists or ever existed. There is no conspiracy.

And now that Medifast has had the benefit of discovery, and has seen from more than a thousand pages of documents I produced that there is neither a conspiracy, nor any defamation, they should quickly drop me from their suit, right?

Wrong. They have to make sure that no one dares to speak out about Medifast and criticize its business model again. The only way to do that is to continue to drown the defendants in legal fees and the burdensome process of litigation. That will teach us a lesson… and everyone else, too!

None of the MLMs want us saying anything bad about the companies, especially if it’s true and might harm their recruiting efforts.

No, this is not Mona Vie's site. No, MonaVie doesn't endorse or approve me writing about them. In fact, they'll probably get mad that I'm mentioning them. I don't like MonaVie.

We’ve seen MonaVie threaten a blogger. Attorney Gerry Nehra threatened bloggers on behalf of ShopToEarn and Shop To Earth. Critics of Medifast (parent of Take Shape for Life) are being sued by the company in order to get them to shut up. Usana Health Sciences sued Barry Minkow to try to shut him up, and went down in flames.

This time, Mona Vie is threatening Ted Nuyten, who runs businessforhome.org. A week ago, Ted picked up on a May article from this site, and published an article of his own regarding MonaVie’s revenue figures. My article carefully stated that the information was unverified and from an anonymous source.  Ted’s article offers the same disclaimer, and Ted wrote:

Monavie does not publish updated actual distributor earnings anymore (Last one is from 2008-2009) which is not a good sign. Therefore this figures could be reliable and could be the 4 weeks revenue from somewhere around February – April 2010. More reports are coming in that Monavie’s revenue is under heavy pressure.

In 2009 Monavie’s revenue has been around $785 million, based on this figures 2010 revenue will be around  $600 million a 20% – 25 % decline.  The USA is the Nr. 1 market with 76 %, followed by Japan 9%, Canada 8%, and Australia 2%. Japan is growing fast. The decline in revenue for the USA is shocking…

And…. in run the lawyers.

Now it’s clear that all this guy did was pretty up the numbers provided by the anonymous source and calculate some other numbers based on the information from the source. And again, he provided a clear disclaimer about the source and the inability to verify the data.

But MonaVie is pissed off, so their lawyers sent Ted a nasty letter. In my opinion, it’s also factually inaccurate. Shame on them for trying to scare a blogger with lies about defamation and interference with business relationships. He did no such thing.

Here’s the letter from Strong & Hanni Law Firm on behalf of Mona Vie:

Strong & Hanni Law Firm

Mr. Ted w. Nuyten

Re: Defamation, Disparagement and Intentional Interference with Economic Relations of MonaVie

Dear Mr. Nuyten,

Our firm represents and is general counsel for Monavie LLC (“Monavie”). It has been brought to MonaVie’s attention that you, through the website, http://www.businessforhome.org/2010/08/monavie-revenue-2010-under-heavy-pressure/, have made, or have caused to be made, defamatory and disparaging publications about MonaVie and its business to MonaVie’s existing and potential distributors and customers. Not only are these statement in violation and contravention of established defamation and business disparagement laws, they clearly constitute intentional interference with MonaVie’s existing and potential economic relationships. As such, while MonaVie respects individuals’ rights to express their opinions, it will not tolerate this type of blatant and deceiving attack on it or its business.

Specifically, MonaVie has learned that you have conceived, created, endorsed, and/or caused to be published to existing and potential distributors and customers of MonaVie content on the webpage, http://www.businessforhome.org/2010/08/monavie-revenue-2010-under-heavy-pressure/, which contains statements and figures improperly and incorrectly suggesting that MonaVie is no longer a viable business, that “Mona[V]ie’s revenue is under heavy pressure,” and that the “decline in [MonaVie’s] revenue is shocking.” It is apparent in the statements and figures posted on the webpage listed above were made, caused to be made, and/or endorsed by you with knowledge that they were false and with knowledge that they would affect ongoing business relationships and prospective business relationships between MonaVie and its distributors and customers. Moreover, and with knowledge of these falsities, you have caused the statements and figures to be published to existing and potential distributors and customers of MonaVie through your posting of the same on the internet, via the webpage listed above, with the intent that they interfere with the business relationships of MonaVie. As a result of your willful and improper publication, MonaVie has been injured in its profession, trade, and business and the statements and figures have acted to tarnish MonaVie’s credit, integrity, and products and interfere with its current and prospective business relationships. Your actions, as detailed herein, are in clear violation of the law.

In light of these recent events, and irrespective of whether or not MonaVie decides to pursue further legal action against you for damages resulting from the disparaging, defamatory, and interfering statements and figures posted on the webpage, http://www.businessforhome.org/2010/08/monavie-revenue-2010-under-heavy-pressure/, MonaVie demands that you immediately take the following measures. First, you must cease making or posting any additional disparaging, defamatory, or interfering statements or figures about MonaVie or its business. Second, within forty-eight (48) hours of your receipt of this letter, you must make a public statement, posted on the website discussed above, making clear to viewers of the website, to MonaVie’s existing and potential distributors and customers, and to the general public, that you have both (a) published improper and incorrect statements and figures regarding the financial condition and viability of MonaVie’s business as a going concern and (b) that such statements and figures were and are false and unsupported by fact. Third, and lastly, you must provide MonaVie with written evidence of this public statement immediately upon your posting of the same on the website discussed above.

Please govern yourself accordingly.

Very truly yours,

STRONG & HANNI, P.C.
Graden P. Jackson

So it would appear that a young associate with too much time on his hands spent some time “researching” this issue and cutting and pasting from form letters, so a partner could sign the letter.

I can’t imagine that sending a letter such as this is okay under any bar association code of ethics. Again, Ted made it clear that the information he was printing was from a source that could not be verified. This lawyer’s statements that Ted knew this information was false, and that he intended to interfere with Mona Vie’s business relationships are obviously ludicrous.

MonaVie’s threats and demands are crazy. Ted has offered to correct any incorrect figures, and even to say that his figures were wrong if MonaVie will represent to him that this is the case. He has also offered to allow MonaVie to publish a statement on his site.

This isn’t the first time MonaVie has sent its lawyers after bloggers who criticize the company. It is important that we stand up to these companies. We (bloggers and consumers) have every right to discuss MLM companies and publish our findings and our opinions, even if they are negative. It is especially important to publish negative findings because MLMs are so good at hiding the negative information. People searching for information on multi-level marketing companies can often only find the good spin put out by the companies and their loyal representatives. The “other side” needs to continue to have a voice, and cannot be scared off by these inappropriate threats.

• Associates in Hong Kong have increased by 300% in the last three years, when the rest of the territories have seen decreases.
• Hong Kong has 1 associate for every 135 citizens. The market is either completely saturated or completely fabricated. Watchdog draws the conclusion that the associate count for Hong Kong more likely includes recruits from mainland China (where recruiting for MLMs is illegal).
• Associate counts in almost every territory have gone down over the last three years, but because of the way USANA presents the numbers in its SEC filings, it’s nearly impossible to see this.
• Something funny is going on the Philippines. During 2009, USANA was stating in its quarterly filings that they added 5,000, 5,000, 6,000, and 4,000 new associates there, for a total of 20,000 new associates in that territory in 2009. Yet the current associate count in the Philippines is 7,000.

Read all the details here: USANA’s Active Associate Per Territory, Evidence of Illegal Recruiting in Mainland China, and Misleading Philippines Associate Figures.<

Lost money? Yes, MLM is all about losing money. They use a product as a “front” to hide this money transfer and make the scheme appear to comply with the law. But the products are of dubious quality, and significantly overpriced. MLMs aren’t really selling a product, they’re selling an “opportunity,” one in which almost everyone loses.

Here are some highlights from the episode:

They talked about Pure Romance, a sex toy company.

Then there was ManCave, a company selling meat and grilling products, with inflated prices and little profit to be had by the guys selling it.

Zrii is another magic juice company, with a pathetic representative who has been working more than full-time for it and has only financial losses and no real future to show for it.

My colleague, Robert FitzPatrick, provided the expert commentary for this show, and did a marvelous job!

The MLM game is all about recruitment, and here’ a look into a recruiting attempt.

So whose fault is it when someone fails at MLM? Is it the fault of the person, or the system?

Now the news is that the powers that be at United First Financial are shopping the company to private equity groups. Of course, they don’t want anyone to know…. especially not their sales force.  The ship is sinking quickly, and the owners are trying to offload the company before there is nothing left to sell.

Here’s the note that recently went to upper management at U1st Financial:

I know you’ve already met with Sorensen Group, but we still need them to sign the attached NDA.  In fact each private equity / venture capital buyer that you talk to needs to sign this NDA.

Any leak to the field that the company is going to be sold will be devastating.  We do not want anyone, including potential buyers discussing this.

Thanks.

Rex H. Huang

General Counsel

United First Financial, LLC

Of course, NDA means non-disclosure agreement. And the Sorenson Group he refers to is likely this company:  http://www.sorensongm.com.

UPDATE: Donald E. Wallace, President/General Counsel of Sorenson Management Services, L.L.C. at 4393 Riverboat Road, Suite 450 in Salt Lake City, Utah 84123 says that the company he works for is not the company referenced by United First Financial in their email about the non-disclosure agreement.

I wonder if these private equity groups are doing any research on United First to see what they company is really selling? Surely they’d want to know how the product fails to help consumers, despite all efforts to convince people to ignore the hard numbers.

With the explosion in social networking and business conducted online, it’s easier than ever for a thief to steal someone’s identity.

To fight that, prosecutors are taking a more aggressive approach in how they use Wisconsin’s identity theft laws.

“I think the reason behind that is because the implications of identity theft in the Internet age are so much greater,” said Milwaukee County District Attorney John T. Chisholm. “I’ve known some prosecutors who have been victimized themselves and it can take years to restore credit.”

But defense attorneys argue that in some instances, misappropriation of identity laws are too broadly used in place of lesser theft charges. A violation of Wis. Stat. sec. 943.201 to include unauthorized use of an individual’s personal identifying information or documents is a Class H felony punishable by up to a $10,000 fine, six years in jail, or both.

Waukesha criminal defense attorney Matthew H. Huppertz said that the punishment may not always fit the crime.

Prior to the rise in identity theft awareness, he said a case where someone swipes a credit card and charges $100 at a store would often result in a misdemeanor theft charge where the offender would pay restitution and a fine.

Now the same crime may result in a felony charge and be pleaded down to a misdemeanor with a more serious sentencing recommendation.

“I think the law is giving prosecutors added leverage,” said Huppertz, of Huppertz & Dorow SC.  “The days where an 18-year-old kid takes dad’s credit card, goes out and charges something and we can make that go away are not happening much anymore.”

Milwaukee attorney William J. Reddin has also noticed an expanded use of identity theft laws to include things like signing someone else’s name on a check.

In some cases, clients are unaware of the potential that even their one-time action could result in a felony, said Reddin, of Reddin, Singer & Govin LLP.

“Some less serious crimes are now charged as identity theft that otherwise would not have been before,” he said. “As a result I think clients probably don’t understand how serious some things are and even signing someone else’s name to a check is form of identity theft.”

But that isn’t always the case.

Even though the statute is broad, Dane County District Attorney Brian Blanchard said isolated instances, such as where someone gives a false name or birth date to police, likely wouldn’t be charged as a felony.

He said his office evaluates intent by an offender and damage to a victim, monetary or otherwise, when determining whether a crime warrants felony charges. However, there could be more opportunities to apply the identity theft statute given the rise in people sharing information online.

“We haven’t seen a ton yet, but I think we might see more people falling into that,” Blanchard said. “If someone has done an Internet search and picked a victim out, to me that is felonious.”

Unique situations are also popping up, such as a case recently referred to Blanchard’s office which involved a man from Michigan who stole the face and body of a Wisconsin man to use on a singles website.

Fraud investigator Tracy L. Coenen, of Sequence Inc. (http://www.sequence-inc.com/) in Milwaukee, said in her experience, people don’t always realize what types of information can put them at risk of identity theft, especially online.

A common security question for online accounts is asking for the accountholder’s mother’s maiden name. If that person has their mother as a friend on Facebook, and she’s using her maiden name in her username, it can lead to problems.

“For Internet thieves, it can be pretty easy to put two and two together,” Coenen said.

Chisholm said that the ease of stealing somebody’s identity means prosecutors must be more vigilant nowadays.

“It’s not just a simple swipe of $100 out of my wallet,” Chisholm said. “It’s much more akin to the feeling people get when their home is broken into.”

Too bad users aren’t actually using the software anymore, according to the below.

A little more info: There have been approximately 30,500 Money Merge Accounts sold. UFirst recorded the unique users who logged into their version 3 and version 4 MMA accounts from January through April of this year. Here are their findings:

v3:
Jan 953
Feb 896
Mar 891
Apr 787

v4:
Jan 7534
Feb 7328
Mar 7401
Apr 6968

Though sales are slowly increasing by approximately 200 per month, logins are declining by about 188 per month. Assuming new clients at least login during their first month, that means approximately 400 people are abandoning the MMA, every month.

In April, when UFirst had approximately 30,000 paid or paying MMA customers, there were only 7755 unique logins. That’s only 26% of their clients. There is one inescapable fact to extract from this:

Almost 75% of MMA users have abandoned the product.

Please don’t waste your $3,500 on this useless software.

Medifast General Counsel Michael Tanczyn, Esq. at the deposition of Sam Antar. (click to enlarge)

Earlier this year, Medifast (NYSE: MED) filed a $270 million lawsuit against Barry Minkow, me, and several other defendants for what it has alleged are false statements and a conspiracy to damage the stock price of the company. This lawsuit is nothing more than the typical big company suing a critic to shut her up. Medifast has far more resources than any of the defendants, and the company was hoping that by suing us, we’d shut up about the company’s multi-level marketing division Take Shape For Life (TSFL).

Because the lawsuit was filed in California, the defendants were immediately able to file anti-SLAPP motions.  (SLAPP = Strategic Lawsuit Against Public Participation) Under the California law which authorizes this, the burden immediately falls on Medifast to prove that it has a probability of winning its case against us.

This is where the Medifast case is supposed to get good. We say we’ve told the truth about the company and/or expressed our opinions as protected under the First Amendment. Medifast then has to prove that we lied about them and they can win their case against us.

The whole point of the anti-SLAPP process is to stop big companies from abusing the legal system to get people to shut up. Big companies like Medifast sue people because they know the people can’t afford ongoing legal fees and will likely just stop talking about the company, even if the critics are right. The anti-SLAPP legislation is supposed to force Medifast to prove its case early on, saving the defendants legal fees if Medifast is filing a frivolous suit to harass and bankrupt the defendants.

In this case, Medifast got a gift from the court. They are supposed to prove their case immediately. In this instance, they cannot prove their case, so they resorted to alternate tactics, and the judge is allowing it. Medifast has even been busy lying to the court, but hasn’t been held to account for this yet.

What can’t Medifast prove? The defendants basically proved three key things after an analysis of Medifast’s SEC filings and other publicly available information:

1. The growth of Medifast as a company is based almost solely on the multi-level marketing division TSFL (Take Shape For Life)
2. TSFL is an endless chain recruiting scheme which relies on the continuous recruitment of new health coaches  in order to stay alive
3. Health coaches with TSFL make almost no money (but of course, you wouldn’t know that unless you went through Medifast’s misleading and confusing disclosures and were aware of how they have manipulated the numbers)

All three of these things are absolutely true, and Medifast knows it. Therefore, they have no case against the defendants.

The first report by the defendants about Medifast and TSFL was publicly released more than a year prior to this lawsuit being filed. In that year, Medifast never once pointed to a specific statement made by the defendants and explained or proved what was false about it. The closest they ever came was an allegation that defendant William Lobdell lied about Medifast insiders selling $6 million worth of stock in November and December 2009, which the company says is refuted by their SEC filings. According to Lobdell, however, the SEC filings completely support his assertion about insider sales of stock.

But its no fun for Medifast to have to follow the law and argue the anti-SLAPP motions immediately. How can they punish and harass the defendants and cost them tens of thousands of dollars each in legal fees if they have no case?

Instead of proceeding with the case as the anti-SLAPP legislation requires, Medifast claimed it needed to do discovery. Look at the above three points. If any of them are false, who has in their possession the data to show exactly that? Medifast, of course. They have the information to prove or disprove the above statements, but they don’t want to move to that part of the litigation because they lose there.

Instead, Medifast asked the judge to allow them to do discovery. And the judge granted it. The judge granted “limited” discovery, but the process really isn’t limited at all. It’s as if the case is proceeding without the anti-SLAPP motions, because Medifast has been able to do every bit of discovery that it would do in the absence of anti-SLAPP motions.

What does this mean? Medifast is making this as difficult, time consuming, burdensome, and costly as possible for all the defendants. They are intentionally causing each of us to incur tens of thousands of dollars of legal fees, in the hopes that we will be unable to do our real jobs or to afford the cost of continued litigation and settle with them.

In my case, Medifast decided that producing the documents I had in my possession related to Medifast was not enough. They demanded a forensic analysis of my computer to try to recover deleted emails and documents that were deleted long before the lawsuit was filed. Nothing was deleted improperly, and Medifast knows this. Yet, they demanded this expensive and time-consuming process to be undertaken to place a great financial burden on me. They made silly demands that were aimed at increasing the cost and burden of this process, too.

We ultimately had my computer looked at and produced whatever could be recovered, because we don’t want to give Medifast a chance to go in front of the judge and distract the judge from the real issue.  The real issue is the three points above and whether they’re true or false. We don’t want Medifast to spend time arguing about discovery issues when we should get to the real issues that Medifast should have to argue.

Yet Medifast is still delaying the process and trying to punish the defendants for daring to criticize the company. Medifast was given 90 days to conduct discovery, and now they want 30  more days. This is simply another delay tactic, designed to cost the defendants more time and more money.

What has Medifast done in the last 90 days? They’ve done things like depose the ever-important Sam Antar. Yes, he is such a key to their case, that he’s not listed as a defendant. He’s merely a blogger who is friends with some of the defendants. He’s written about Medifast on his blog. And so Medifast has spent hours and hours harassing him.

Wait! What about the defendants? Shouldn’t Medifast be worried about deposing them? Wasn’t that the whole point of this discovery process? I have heard not one peep about deposing me. Yep. Deposing Sam Antar is far more important. So important that now Medifast wants to extend discovery so that they can do depositions of the actual defendants.

Again, let me remind you that the whole point of the anti-SLAPP motions is to stop the process. It is to protect the defendants so they aren’t incurring tens of thousands of dollars of legal fees and hours and hours of time related to a frivolous lawsuit. Yet nothing has stopped. Medifast is like Girls Gone Wild, demanding all sorts of documents and enlarging time frames and generally being a bully with the blessing of the judge.

It’s easy to see what Medifast is doing. They’re delaying arguing the real issues because they will lose on the facts. And as a result, they’re also delaying having to provide any discovery themselves. They know what happens if they’re forced to turn over data and documents: it will be proven that the defendants told the truth. And we know that the longer Medifast goes without having to produce information themselves, the greater the chance that they are destroying and altering documentation.

How willing do you think Medifast will be to take the every single computer of every single employee to a computer forensic firm and have them examined for deleted documentation? I doubt they’ll want to do that, but they expect the defendants to do it.

The games need to stop. This litigation needs to proceed under the anti-SLAPP legislation in California. Enough games. Enough burden on the defendants. Someone (the judge, maybe?) needs to make Medifast prove its case the way the law intended them to prove it.