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Schulman Bhattacharya Prevails After Filing California Federal Court Action—Major Internet Commerce Companies Yield to Demand to Block On-Line Sales Transactions for VSL#3 Product

Apr 11

In Schulman Bhattacharya’s ongoing battle over the VSL#3 probiotic product, the Firm successfully resolved a contentious dispute between its client, ExeGi Pharma, LLC, and a group of companies in California that were facilitating the processing of online sales transactions for VSL#3.  The e-commerce companies in question are Nexternal Solutions, Inc., True Commerce, Inc., and HighJump Software, Inc.  Last November, the Firm prevailed before a jury in Maryland federal court and then obtained a judgment holding that the VSL#3 product was being falsely advertised by Alfasigma USA, Inc., the product’s distributor.  The advertising in question falsely claimed that the product currently being sold as VSL#3 is the same, in composition and efficacy, as the original formula invented by renowned scientist Dr. Claudio De Simone, when in actuality VSL#3 ceased to contain Professor De Simone’s proprietary formulation beginning in June 2016.  The jury awarded $15 million in damages to ExeGi and against Alfasigma on the false advertising claim. 

Since the November judgment, Alfasigma has refused to correct its false advertising.  Accordingly, the Firm contacted Nexternal and its affiliate e-commerce companies and demanded that they cease all cooperation with Alfasigma in facilitating online sales of the offending VSL#3 product.  The e-commerce companies hired litigation counsel and refused to halt their service to VSL#3, claiming that they were not responsible for Alfasigma’s false advertising of VSL#3.  The Firm protested and asked that the companies reconsider their position.  They refused.  The Firm then filed a 71-page six-count complaint against the companies in the U.S. District Court for the Southern District of California, laying out a formidable case for why under both California and federal law the companies were directly liable for enabling Alfasigma’s false advertising.  Several days after notifying the companies of our case, they fully capitulated by halting all service in support of the falsely advertised VSL#3 product.

Professor Claudio De Simone, inventor of the original probiotic formulation no longer contained in VSL#3, stated:  “I am very pleased that Nexternal, True Commerce, and HighJump have finally done the right thing by terminating all cooperation with Alfasigma and halting all online sales of the VSL#3 product until such time as Alfasigma corrects its false advertising of the product.  We will not permit Alfasigma, or anyone else, to falsely represent to the public that they are selling the same original probiotic formulation that I invented more than 20 years ago and that has successfully undergone more than 60 clinical trials around the world.  I and my partners at ExeGi will continue aggressively to pursue legal action against any company or person assisting Alfasigma in perpetrating this serious fraud on patients and their doctors.  My formula is available in the United States only through ExeGi Pharma under the brand name Visbiome.”

Our case filed in the Southern District of California is styled ExeGi Pharma, LLC v. True Commerce, Inc. et al., Case No. 3:19-cv-00611-AJB-MSB.  The Complaint may be viewed by clicking here.

The Schulman Bhattacharya team handling the VSL litigation is led by partners Jeremy W. Schulman and Jeffrey S. Gavenman, assisted by partner Koushik Bhattacharya and associates Sabina Schiller, Sandra Schiller, and Jessica Bustamante.