Neora has moved to dismiss the FTC’s pyramid scheme lawsuit against it.

The company argues the FTC’s lawsuit should be dismissed, owing to it filing a “duplicative” lawsuit first in Illinois.

In the alternative, Neora wants the FTC’s New Jersey lawsuit moved to Illinois or Texas.

In their filed December 23rd response, the FTC argues that their case is not a duplicate of Neora’s own action.

The regulator also argues moving the case to Illinois or Texas is not proper.

This is based on Signum Bioscience and Signum Nutralogix being based out of New Jersey.

Both Signum companies are prominently referenced in FTC’s complaint in connection to unsubstantiated health claims.

The FTC also points out that Neora has no offices or facilities in Illinois. Texas as a second choice doesn’t override the FTC’s choice as a plaintiff to file in New Jersey.

Neora’s misrepresentations were made in every district in the country, as well as in at least a dozen foreign countries.

As such, no single district can be said to be the single district in which Neora’s claims arose.

And while Neora offer(s) internally contradictory arguments in support of their preference for two other districts, they do not cite a single relevant occurrence in either district.

Neora’s founder, Jeff Olson, resides in Florida.

As part of their ongoing investigation into Neora (then Nerium), the FTC engaged in settlement negotiations with the defendants.

Those negotiations saw Neora’s attorneys attempt to persuade FTC Commissioners not to file their lawsuit.

Neora purportedly told the FTC that

public filing of the recommended complaint would have catastrophic consequences for its business.

The FTC did manage to strike a settlement with Signum, however no agreement was able to be reached with Neora.

On October 29th, the FTC’s Commissioners voted unanimously to approve filing of the Neora lawsuit.

In an unusual move, Neora was given a heads up of the vote and pending lawsuit. The FTC also agreed to delay filing for up to a week, to give Neora another chance to settle.

Instead of pursuing settlement, Neora raced to court to file their Illinois lawsuit against the FTC.

Part of Neora’s lawsuit is a request for declaratory judgement, which relies on the “first-filed rule”.

By taking advantage of the notice and extra time the FTC gave them to negotiate settlement, Neora argues that its lawsuit, filed before the FTC’s, should take precedence.

The FTC argues their case is not a duplicate and that Neora’s lawsuit ‘was merely an attempt to preempt the filing of the second case’.

This, the FTC claims, is something courts routinely reject under the first-filed rule.

One additional tidbit we learn from the FTC’s response is that the regulator began investigating Neora back in 2016.

FTC staff has been investigating and engaged with Defendants since June 2016, when the FTC sent a Civil Investigative Demand (“CID”) to Neora, requesting various information, documents, and data relating to Neora’s marketing of dietary supplements and sale of its business opportunity.

The FTC states that Neora dragged its feet on production for “more than two years”.

In fact, to this day, Neora has never provided the Commission with its required final certification that it has fully complied with the CID.

The FTC filed a Motion to Dismiss Neora’s lawsuit against in late December.

The FTC expects that Neora’s Illinois lawsuit will shortly be dismissed for lack of subject matter jurisdiction in accordance with decades of precedent both in the Supreme Court and the Seventh Circuit.

A hearing on the FTC’s motion has been scheduled for May 20th.

With respect to the FTC v. Neora lawsuit, Neora filed its reply to the FTC’s opposition on December 30th.

As of yet there has been no further action related to the motion on the case docket.


Update 15th August 2020 – Neora’s motion to dismiss has been denied. They did however prevail on getting the case moved to Texas.