Nu Skin International is seeking dismissal of a $75 million lawsuit filed against it in San Francisco, saying the suit is full of numerous unfounded allegations.
Calling the class-action complaint "inflammatory, misleading and inaccurate," John D. Shuff, an attorney hired by the company, filed a motion Monday to strike the suit in U.S. District Court.A hearing on the matter is set for Oct. 30.
Shuff said the company did not see the suit coming. "I think they were rather shocked by it," he said.
Nu Skin vice president Steven J. Lund said the company is prepared to vigorously defend its business practices.
The complaint filed in August by the law firm Lieff, Cabraser & Heimann on behalf of a former Nu Skin distributor alleges the Provo-based company operates a pyramid scheme. Patricia Arata, Watsonville, Calif., claims she lost $4,000 as an independent dealer of the company's personal-care products.
The suit claims Nu Skin violated federal securities and racketeering laws, and accuses it of false advertising, fraud and unfair business practices.
"The lawsuit is a mishmash of characterizations and accusations against the company not supported by the facts, including the claim that Nu Skin is a pyramid scheme," Lund said in a written statement. "These allegations are absolutely untrue."
Nu Skin takes exception to the assertion that a cease-and-desist order was filed against the company in Michigan. It calls the suit's claim that Nu Skin founder Blake M. Roney was involved in the defunct Cambridge Diet Plan erroneous.
Although Roney may not have been associated with Cambridge, Nu Skin vice president for corporate services Sandie N. Tillotson and top distributor Clara McDermott were. The suit names McDermott but not Tillotson. The suit claims Nu Skin is "essentially a clone" of Cambridge.
"If Arata's statements were not protected within a lawsuit, Nu Skin would consider bringing libel action for the scandalous remarks included in the complaint," said Shuff, an attorney with Robins, Kaplan, Miller and Ciresi in San Francisco.
Shuff said Nu Skin, which expects $500 million in product sales this year, is not a pyramid scam.
"Try getting a refund for your purchases from a pyramid operation; Nu Skin's return and refund policy is among the most liberal anywhere," he said.
Lund said Nu Skin has received "minimal" complaints from its more than 100,000 independent distributors in the United States, Canada and Hong Kong.