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Jury returns verdict against AdvoCare

Dallas Business Journal - by Joyce Tsai Staff writer

Monday, August 31, 2009

A Dallas County jury recently awarded $1.9 million in damages against Carrollton, Texas-based AdvoCare International LP after finding it engaged in deceptive trade practices and unfairly canceled agreements with two of its distributors.

AdvoCare, which is a multilevel marketer of nutritional supplements and skin-care products, unfairly canceled agreements with distributors Bruce and Teresa Badgett of Arlington, the district court jury found.

According to the Badgetts' lawsuit, the two were active and profitable marketers of AdvoCare products for more than a dozen years before their distributorship was canceled by the company in 2006 "based upon vague and trumped-up charges."

The Badgetts alleged that AdvoCare management misappropriated profit streams developed and earned by them to benefit AdvoCare management and other distributors instead, according to court documents.

The jury found that AdvoCare engaged in false, misleading or deceptive practices that damaged the Badgetts and that the termination provisions of the distributor contract with AdvoCare were unconscionable, according to court documents.

The verdict will help to ensure that "other people don't get in the situation where they spend years of their life developing a multilevel sales network, only to have it taken away from them by AdvoCare," said Ted Anderson of Kilgore & Kilgore in Dallas, who was the trial counsel for the Bagdetts.

However, AdvoCare still denies the Bagdetts' claims, said C. Brenton Kugler of Scheef & Stone LLP in Dallas, the attorney representing AdvoCare. Since the recorded judgment on the case will not be handed down until October, it's not yet final - and AdvoCare plans to appeal the decision if it is finalized, he said.

AdvoCare is planning to appeal based on the fact that the plaintiffs are not customers and therefore don't fit the statutory definition necessary to be covered the Texas Deceptive Trade Practices Act, he said.

"We don't think it'll stand," Kugler said. "We feel very comfortable with our chances on appeal."

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