Youngevity accuse Wakaya’s Todd Smith of witness tampering
The beef between Youngevity and Wakaya Perfection continues to intensify.
In a September 12th filing, Youngevity filed a motion requesting sanctions for witness tampering.
Rick Anson, formerly Vice President of Wakaya Perfection, owns LiveWell LLC and Nutra-Life Inc.
Through these companies Anson was supplying Wakaya Perfection with various products.
Youngevity filed suit against Wakaya Perfection in April, 2016. This was followed up by a second lawsuit in November, alleging unfair competition due to false labeling on LiveWell’s filtration products.
Five days after that second lawsuit was filed on November 10th, Joel Wallach, Founder of Youngevity, visited LiveWell’s manufacturing facility in Idaho.
The day after that
Anson emailed Wakaya’s owner, Todd Smith, stating, “I hope to strengthen our relationship and move sales of the Bula Bottle and supplements forward for all parties.”
Wakaya Perfection allege this was ‘in response to what would be a highly improper request by Wallach for Anson to obtain confidential information from Wakaya‘.
In that email, Anson asked Smith for an update about “[p]ublic lawsuits from Youngevity and the Prop 65 California listing Wakaya Perfection and others and the fact that the suit lists licensed technology.”
At that time Wakaya Perfection had yet to be served the Prop 65 complaint, so Wakaya Perfection allege the only way Anson could have found out about it was through Wallach.
As part of discovery in the ongoing case, Wakaya Perfection has asked for email communication between Wallach and Anson during this time.
Youngevity refused, citing “common interest” privilege. Nothing suss.
Late November / early December 2016 seems to be the time Anson, while still working as a corporate executive at Wakaya, turned full mole for Youngevity.
On November 30th Todd Smith, owner of Wakaya Perfection, forwarded Youngevity’s Prop 65 lawsuit to Anson via email.
On December 8th Anson forwarded the email, which Smith claims was “privileged communication between members of the Wakaya executive
team about ongoing litigation” to Wallach.
During the same time period, Wakaya Perfection allege Anson was
working with Youngevity’s executives and litigation counsel, preparing a Notice of Default alleging that Wakaya had breached its agreements with him and LiveWell.
On December 16th Anson served the Notice of Default on Wakaya Perfection.
Wakaya claim the notice “mirrored the allegations in Youngevity’s lawsuits”, strongly implying that Anson had been ‘working with Youngevity’s executives and litigation counsel‘.
Todd Smith responded to Anson’s notice via email:
Got your letter. Let’s talk and work things out. Soon!
Also, by way of advice. You had better ensure that this letter remains confidential.
You have made some very serious allegations which if publicized would make you liable for defamation and libel.
Your claims are false.
You do not at this stage have judicial immunity.
You leak anything like this letter to anyone and I can’t protect you. Be careful.
Smith claims his email was ‘nothing more than Smith’s attempt to warn an employee to be careful in disseminating false statements about the company‘.
Having brought Anson forward as a witness, Youngevity claim Smith was witness tampering.
Wakaya Perfection had until January 16th to remedy the Notice of Default. They didn’t and so the agreements were effectively terminated.
A few weeks later on February 1st, Anson entered into a consulting and royalty agreement with Youngevity.
After the agreements were signed, Youngevity amended their Prop 65 complaint against Wakaya Perfection to remove any allegations related to LiveWell’s products.
Anson was then appointed Vice President of Youngevity.
Legal? Maybe. Ethical? Go no.
I get a strong sense of Anson playing both sides and Youngevity strategically capitalizing on his flip-flopping.
If it was all done in the open there’d be no foul play, but this wall happening in secret – until the relevant documents were filed and agreements signed.
When you have to conduct business under the cover of darkness, usually you’re up to something you shouldn’t be.
And here’s where things get even more murky.
In addition to water filtration bottles, LiveWell had been supplying Wakaya Perfection with a complimentary supplement called “LuvCaps”.
LuvCaps basically sit at the top of the water bottles and inject “libido enhancement” into the water (bow-chika-wowow etc.).
Anyway so after LiveWell cut them off, Wakaya perfection attempted to source an alternative.
That lead to laboratory testing of the supplement, revealing it contained an ‘unauthorized ingredient that had not been disclosed to Wakaya‘.
As a result, Wakaya had to recall the incorrectly labeled LuvCaps that had been supplied by LiveWell, at considerable expense and inconvenience.
Another supplier named in Youngevity’s Prop 65 lawsuit was the Great American Clay Company, co-owned by David Smith.
As part of the litigation between Youngevity and Wakaya, David Smith was to be deposed.
The parties attempted to negotiate a date, with Youngevity putting forth a date ‘that was extremely inconvenient for Wakaya‘.
Upon contacting Lynn Jenkins, the other co-owner of the Great American Clay Company, Todd Smith was purportedly told ‘he and David Smith were
generally available for depositions.‘
As a result, Todd Smith texted David Smith and Lynn Jenkins, Great American Clay Company’s other owner, on June 15 to clarify and confirm their availability for depositions.
Here’s the text Todd Smith sent;
Hello David and Lyn- can we get on the phone asap today?
YGY is pushing for a deposition date and we need to do some scheduling.
Please let me know when we can talk. Thanks!!
According to Wakaya, David Smith’s response saw him accuse Todd Smith ‘f “badgering him”.
David Smith referred the matter to his legal team, which Todd Smith claims was “puzzling”…
until he learned in the subsequent weeks that David Smith had been in contact with and was cooperating with Youngevity.
Youngevity are accusing Todd Smith of threatening David Smith and attempting to influence his testimony.
Todd Smith maintains he sent the text ‘only to assist with scheduling
depositions … in hopes of finding a deposition date that would work for everyone involved‘.
Two former Wakaya suppliers now working with Youngevity. Hmm.
Thus far though I’m not seeing any evidence of witness tampering, which if you remember is what Youngevity are pushing for.
The day before Rick Anson’s scheduled deposition, Todd Smith alleges he
he learned for the first time that Anson had been emailing information to Wallach and had been communicating with Youngevity’s counsel about the lawsuits and the Notice of Default.
This prompted the following text from Smith to Anson;
Hello Rick – I hope you arrived in AZ safely.
As you prepare your thoughts for tomorrow, please realize that I know what the magic ingredient is to the LuvCap you supplied to us. Not on the label though.
I wonder if Clay and others are aware.
Not a good thing legally for someone of Clay’s reputation.
See you in the morning. 😉 Shhhhhhhhh!
Now within the context of this being sent the day before Anson’s deposition, it’s pretty hard not to look at it as an attempt to silence a witness.
Hell, I’d even opine it’s an open attempt at blackmail. I mean really, how else are you supposed to read “See you in the morning. 😉 Shhhhhhhhh!”
According to Wakaya Perfection,
the “Shhhhhhhhhh!” was not referencing Anson’s deposition testimony the next morning but instead Anson and LiveWell’s silence about the “secret” LuvCaps ingredient.
Yeah I’m not buying it. Coupled with “I wonder if Claw and the others are aware” and talk of their reputation, it’s clear Smith intended to dangle this over Anson’s head.
The timing of the text no other purpose than to influence Anson’s testimony.
I mean there’s a million other ways to convey disapproval at non-disclosure of agreements.
Wording communication to make it sound like blackmail isn’t something that just happens unintentionally.
In any event, Wakaya Perfection claim
Anson testified the next day that the text message had no impact on his deposition testimony.
To me that doesn’t justify Smith’s text. Rather it shows Anson wasn’t perturbed by it.
Upon informing his attorneys he’d sent the text, they sought to remove Smith from Anson’s testimony and issue an apology on his behalf.
During a break in the deposition, Smith’s attorenys told Anson
And just at the outset I wanted to say, having had the opportunity to speak with my client, Mr. Smith, about the text that was sent this morning, he would like to apologize for that.
His intent wasn’t to threaten or intimidate.
Smith followed up with an apology text sent to Anson directly a few hours later.
Dear Rick- I hope your flight back to Boise was uneventful and safe.
I am sorry for the text I sent you late last night.
I should not have sent it and apologize for any distress I may have caused you.
I had spent the day in another deposition and reading the many emails you and Steve [Wallach, Youngevity’s CEO] sent back and forth this last year and then travelling to Phoenix I was tired and out of sorts and should not have been texting anyone- especially not you.
Again, I am sorry for any stress or nervousness I may have caused you. Todd
Smith maintains he
immediately regretted sending the text message—not because it was illegal or a threat, but because it was emotional and not well-considered.
Despite the text purportedly not having an effect on Anson’s deposition, he’s conveyed through his attorneys that he very much interpreted Smith’s text
as an intimidation tactic meant to alter his testimony, Mr. Smith committed witness tampering.
We therefore demand that you agree to exclude Mr. Smith from any future deposition of any Youngevity employee or distributor.
Youngevity will also ask Judge Burkhardt to refer Mr. Smith to the United States District Attorney for criminal prosecution for his violation 18 U.S.C. Section 1512(b).
In addition, to act as a deterrent to put an end to the Wakaya parties’ pattern of witness intimidation, we demand that Mr. Smith pay for all costs and fees incurred in Mr. Anson’s deposition.
That was July 12th, with Smith sitting out depositions under threat of them not taking place if he was in attendance.
Youngevity initially revealed its intent to file a witness tampering motion and was given permission to do so by August 4th.
On August 4th they announced they wouldn’t be filing the motion during a telephonic conference.
Despite expressly representing to Judge Burkhardt that it was no longer seeking sanctions for witness tampering, Youngevity surprisingly submitted this Motion on August 8, and therein asks Judge Moskowitz to decide the issue and impose sanctions pursuant to the Court’s inherent powers.
The sanctions Youngevity are seeking include penal sanctions, dismissals, default judgments, contempt orders and attorneys’ fees.
Wakaya Perfection maintains Smith did not act in bad faith but rather recklessness.
If found to be the case then Youngevity’s witness tampering motion hold no merit.
Wakaya Perfection’s response to Youngevity’s witness tampering motion was filed on September 15th.
In a response filed on September 22nd, Youngevity claim
Wakaya admits that Todd Smith intended to alter Rick Anson’s testimony through Todd Smith’s text messages to Anson, conceding that “Todd Smith intended to prevent further improper disclosures of Wakaya’s confidential information. . . .”
The purpose and effect of Todd Smith’s phone calls, emails, and texts to key witnesses is clear:
Todd Smith endeavored to influence key witnesses and their testimony at depositions.
As per the case docket as of September 28th, Judge Burkhardt has yet to rule on the matter.