Recap: Hi-Tech Pharma Sues ALLMAX for Amino Spiking

The supplement industry has been ABLAZE lately with a litany of lawsuits, none more engrossing than the tumultuous JYM vs BB.com saga. But today we take a break from that soap opera to address one of the most serious issues the industry had this decade — amino acid spiking in protein powders!

ALLMAX Nutrition Lawsuit

Earlier this summer, ALLMAX was served with a second lawsuit regarding amino acid spiking. This one’s interesting because it involves the RICO statute

Hi-Tech Pharmaceuticals has made a name for itself as the lone wolf in the industry willing to take on the likes of the Feds, but this latest lawsuit isn’t tackling the G-Men. Instead, Hi-Tech has this time decided to take a bite out of the ‘unfair competition’ as they unleashed their army of high-powered attorneys on their fellow supplement companies who may have been caught allegedly deceiving consumers.

This is slightly older news, but given the gravity of the situation, we needed to make sure we had an article on it so that we can keep it up to date as the case progresses.

Earlier in 2016, Hi-Tech filed a lawsuit against a major industry competitor in ALLMAX Nutrition for amino spiking.[1] This isn’t unfamiliar territory for the brand though, as it has also filed suits against MusclePharm’s Iron Mass protein products as well as several Iovate (MuscleTech) proteins.

Click here to download the Hi-Tech vs. ALLMAX lawsuit PDF

RICO to the Rescue?!

You’re probably wondering how in the world is Hi-Tech suing another company in the industry for amino spiking when it really doesn’t affect Hi-Tech at all whether another company is ripping off consumers.

As it turns out, Hi-Tech can sue their brethren courtesy of the same statutes the Feds used in the 80s and 90s to crack the New York Mob — the RICO Act!

What is the RICO Act?

The Racketeer Influenced and Corrupt Organizations (RICO) Act provides:

“for persons who engage in a ‘pattern of racketeering activity’ or ‘collection of an unlawful debt’ and who have a specified relationship to an ‘enterprise’ that affects interstate or foreign commerce. Under the RICO statute, ‘racketeering activity’ includes state offenses involving murder, robbery, extortion, and several other serious offenses, punishable by imprisonment for more than one year, and more than one hundred serious federal offenses including extortion, interstate theft, narcotics violations, mail fraud, securities fraud, currency reporting violations, certain immigration offenses, and terrorism related offenses.”[2]

Basically, it allows the leaders of a “syndicate” (or company) to be brought to court for the crimes they ordered or “assisted” in committing. So, while the owners of AllMax may not have swapped the real whey protein from free-form aminos (if allegations are true), they could have ordered the proverbial “code red,” and thus under RICO, they may be held accountable.

Why is Spiking such a big deal?

When done in a manner where cheap amino acids with less biological benefits replace whole proteins, amino acid spiking is deceptive to the consumer. It should be noted that certain forms of such spiking may be “legal” by the FDA, but that doesn’t mean it’s legal per other laws such as the Lanham act or the RICO act. Consumers who paid a premium price for a product they’re assuming is complete protein, but they end up getting something of lower biological quality and lesser value. It was done en masse in 2013-2014 since the wholesale price of whey protein was (and still is) significantly higher than that of free-form amino acids and other nitrogen-containing amino acids.

If this is all confusing to you, then you can read our amino acid spiking blog post from a couple of years back that explains it all.

Specifics of the Lawsuit

ALLMAX HexaPro Ingredients

This ingredient label was taken directly from page 7 of the earlier class action complaint

Hi-Tech filed suit in a Georgia federal court on June 1, 2016 alleging that AllMax artificially inflated the protein content in their protein products and then lied to consumers about the true content, thus, violating federal competition and state consumer protection laws. The lawsuits also alleges violations of the RICO Act and protein spiking allegations in AllMax’s protein supplements.

The lawsuit specifically calls out Allmax’s Ultra-Premium 6-Protein Blend HexaPro for “misleading” consumers and drawing their “attention away from the significant amount of free form amino acids and nonprotein ingredients in the protein powder.”[1]

It’s important to note that there was already a class-action lawsuit filed against ALLMAX for HexaPro, but this new suit seems to take things even further with the RICO statute.

Some of the highlights from the suit:

  • allege that Allmax and its CEO Michael Kichuk engaged in a plot to knowingly defraud consumers as to the protein powder’s content, quality, characteristics, and/or ingredients in regards to AllMax’s Ultra-Premium 6 Protein Blend HexaPro, thus violating the Lanham Act,
  • AllMax states there are 25g of protein per serving in HexaPro, when tests allegedly revealed that there were actually 17.914g per serving[1]
  • As a result of the inflated count, consumers may have been enticed to purchase AllMax’s protein instead of Hi-Tech’s NitroPro® product, which we are to assume was not spiked and thus had either higher prices or lower profit margins,
  • “Hi-Tech has suffered both an ascertainable economic loss of money and reputational injury by the diversion of business from Hi-Tech to Defendants and the loss of goodwill in HiTech’s product”[1]

Hi-Tech issued a press release on June 3, 2016 in which they state:

“In furtherance of this scheme, Iovate and Allmax used the Internet to disseminate its false product claims to consumers across the United States, and to enable consumers to purchase Iovate and AllMax’s products online. They also used the U.S. Mail and/or other interstate carriers to ship the products to consumers throughout the United States in violation of 18 U.S.C. Section 1341.” The court documents further state, “Defendants have conspired to conduct and participate in the conduct of the affairs of the enterprise through a pattern of racketeering activity. That conduct constitutes conspiracy to violate Racketeer Influenced and Corrupt Organizations (RICO) 18 U.S.C. Section 1962(c), in violation of 18 U.S.C. Section 1962(d).”[3]

Looking back: The Lanham Act Cases Were a Win for the Industry

Fact is, protein pots wder quality in 2016 is better than in 2014, much thanks to these Lanham Act lawsuits.

While this may look like Hi-Tech’s attempt to take down its competition, there’s a bigger picture here that some may be missing. Hi-Tech is going after those companies who they claim were willingly and knowingly defrauding consumers and is showing that this type of behavior will not be tolerated in the industry.

Yes, Hi-Tech does certainly stand to gain some from a competitor’s downfall, but in the end, the real winner is the consumer. Fact is, protein powder quality in 2016 is better than in 2014, much thanks to these Lanham Act lawsuits.

The everyday Joe Bodybuilder doesn’t have the time, funds, or legal acumen to take these amino-spikers down, but Hi-Tech and their team sure do! The early 2010s were a complete and total disaster for protein consumers, and sadly to say, the threats of these lawsuits have cleaned things up more than any government enforcement action ever has.

The big picture here is that, the days of companies getting away with spiked proteins is dwindling fast because of lawsuits like these. If the Feds don’t come knocking on your door, you can be damn sure that Hi-Tech will!

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References

  1. https://www.docdroid.net/JbDx6Nk/hi-tech-pharma-vs-allmax-20160601.pdf.html
  2. https://www.docdroid.net/YgNfLIE/rico-act.pdf.html
  3. http://www.prnewswire.com/news-releases/hi-tech-pharmaceuticals-files-lawsuits-against-iovate-and-allmax-over-racketeer-influenced-and-corrupt-organizations-rico-and-protein-spiking-allegations-300279267.html
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