What happened to Visalus? (explained)
Late last year we reported on Visalus appearing to be sold off to Pruvit.
The transaction was strange, absent not even a simple press-release to announce the transaction.
Following a tip-off from a reader, BehindMLM has learned a whopping $925 million judgment was likely behind Visalus’ downfall.
Mid 2019 a federal jury awarded $925 million in damages. The case was filed by class-plaintiffs, one of which was a former Visalus distributor, on behalf of roughly 800,000 people.
The case itself pertained to allegations Visalus ‘made 1,850,436 unlawful automated calls’. In other words, Visalus was busted harassing people via telemarketing.
The damage amount was calculated based on a $500 penalty per illegal call made. This is the minimum statutory penalty as per the Telephone Consumer Protection Act (TCPA).
In response to the jury’s findings, one of Visalus’ attorneys put this spin on it;
The statement that there was a $925[MM] damages award is not true. Rather, the verdict was a special form where the jury answered questions.
Again, it was not a damages award and the judge has reserved ruling on damage issues for future briefs and hearings.
Ultimately however the $925 million dollar judgment against Visalus stood.
Since April 2019 Visalus has repeatedly tried to have the $925 million dollar judgment adjusted down.
As reported by the National Law Review, their latest attempt in August 2020 was denied on “constitutional grounds”.
ViSalus suggests that the Court reduce damages from $500 per call to no more than $1 per call.
The Court declines to conclude that ViSalus’s aggregate damages award should be reduced simply because ViSalus committed almost two million violations of the TCPA.
ViSalus’s understanding of the limitations on damages imposed by due process implies that a constitutional penalty for a single violation becomes unconstitutional if the defendant commits the violation enough times.
As discussed above, that proposition is at odds with the Supreme Court’s decision in Williams and would effectively immunize illegal conduct if a defendant’s bad acts crossed a certain threshold.
Not really sure why Visalus thought arguing that because they’d breached the TCPA so many times they deserved a lesser penalty, but that’s what they presented to the court.
The jury found that ViSalus committed a stratospheric number of TCPA violations.
It is no surprise that the TCPA’s constitutionally-valid minimum penalty of $500 for each violation has catapulted ViSalus’s penalty into the mesosphere
Obviously a $925 million judgment against any MLM company is a big deal, and I believe this is why the company hitched itself to Pruvit.
Out of curiosity I went looking to see if either Pruvit or Visalus had addressed the nature of the relationship between the two companies. Sadly it appears they haven’t.
The best I found was some Visalus distributors claiming a “partnership” with Pruvit. For now, Visalus continues to operate as a stand-alone company through their “Vi” website.
Pending a formal announcement detailing transparency between Visalus and Pruvit, unfortunately we’ll have to leave it there.
Update 6th April 2023 – Following partial granting of an appeal in late 2022 (with respect to the $925 million awarded in damages), Visalus has filed a writ of certiorari with the Supreme Court.