Sunrider and the Law (1992)
Stephen Barrett, M.D.
On March 30, 1992, in Phoenix, Arizona, an 8-person jury concluded that Sunrider Corporation had violated Arizona’s racketeering laws. The plaintiff in the case, Debi A. Boling, had charged that Sunrider products had caused her to become very ill. She had also accused the company of making misrepresentations to induce people to buy its products. According to testimony in the case, Ms. Boling had taken products recommended by a local masseuse to reduce the amount of fat on her legs. Soon afterward, she began to lose large amounts of hair from her head, her teeth became discolored, and she experienced severe nausea. To win her case, Ms. Boling had to prove that she had been injured by a criminal act done with fraudulent intent for financial gain. After hearing testimony over a 3-month period, the jury awarded her $650,000—$50,000 for actual damages, which were tripled under the racketeering law, plus an additional $500,000 for punitive damages.
“The Sunrider Story”
Sunrider sells its products through multilevel marketing. This set-up (also called network marketing) is a form of person-to-person sales in which independent distributors sell products and also attempt to turn customers into distributors who will do the same. When enough distributors have been enrolled in a recruiter’s “downline,” that recruiter is eligible to collect a percentage of their sales. Becoming a Sunrider distributor is easy and requires no expert knowledge of health or nutrition. It merely involves completing a one-page application and spending a few dollars for a distributor kit that includes a sales manual, product literature, order forms, and a subscription to the company’s magazine.
Sunrider began operations in December 1982 in Orem, Utah, and moved its headquarters to Torrance, California, in July 1987. Its board chairman and president is Tei Fu Chen, who was also the company’s co-founder. Before Ms. Boling filed suit, the company’s sales pitch glorified the manner in which Chen supposedly learned how to make its formulas and used them to overcome serious obstacles.
According to “The Sunrider Story,” ancient Chinese temple priests who were leading developers of the martial arts had discovered special plant and herb combinations for increased endurance, energy and mental alertness and also had discovered a balm to expedite healing of torn or bruised muscles. Chen’s great-grandfather was able to obtain manuscripts containing the secrets of 5,000 years of research and became a prominent herbal physician. He and Chen’s father began teaching them to Chen during his eighth year. Chen subsequently became a Taiwanese National Kung Fu champion, a medical doctor (in Taiwan), a licensed pharmacist (in the U.S.), a biochemist, and a “world renowned nutritionist.”
„At the age of twenty,” the story continues, “he became a Senior Research Scientist. He then spent 15 years in continued research, testing the principles taught in the manuscripts according to modern science and technology. . . . As a young man, Dr. Chen was physically weak. He was small, underweight and overpowered by physical allergies and illness. His own story of transformation was adequate proof of the legitimacy of the secrets on the pages of the manuscripts.”
While preparing for the trial, Ms. Boling and her attorney, A. Melvin McDonald, learned that the story described above was a complete fabrication. Chen’s father, Yung Yeuan Chen, said in an affidavit that his son was not born into poverty and was not a weak and sickly child. Chen’s father also denied having any knowledge that Chen spent much time with his grandfather, studied herbal manuscripts while he was growing up, or was a national kung fu champion. (During a deposition, Chen claimed he had been a champion but had thrown away his medals and “couldn’t remember” the specific location where the tournament was held.) Additional information obtained during depositions made it clear that Chen had never been a licensed pharmacist and was not a medical doctor or a “world renowned nutritionist.” In fact, when asked to name the B-vitamins or to say how many D-vitamins there are, he refused to do so and said he would have to look up the information. Nor could he provide or identify any ancient (or even very old) document from which any Sunrider formula was derived. Nor could he provide any basis for saying that he ever was a “senior research scientist.” (He was merely a teaching assistant who helped set up lab experiments and grade papers.)
Dubious Claims for Products
During 1987 I obtained and analyzed Sunrider distributor kits and product literature spanning most of the period from 1982 through 1987. At the time, the company had three product lines: Kandesn, Vitalite, and Sunergy.
Kandesn, a group of skin-care products, was said to combine the finest herbal ingredients with the “Essence of Pearl” using ancient formulas to create products that enhance the health and beauty of the skin” and to “nourish the body … from within and without.”
The Vitalite program was said to provide “high energy level, manageable appetite, mental alertness, sustained well-being, effective metabolic pace, emotional stability, balance in body systems, and efficient cleansing processes.” It included supplement capsules, meal-substitute drinks that contained powdered protein and herbs, an herbal beverage, a vegetable soup mix, high-fiber cookies, and other low-calorie snacks. In 1987, kits containing a complete 2-week supply of Vitalite products wholesaled for $149.95.
The Sunergy line was composed of “whole food concentrates,” herbs, and supplements. The concentrates were said to support, nourish, strengthen, enhance, and/or stimulate various organs or body functions. The herbs were promoted with various claims that they could help nourish, cleanse, purify and/or balance the body, increase hormone production, or enhance the power of the body. The supplements were Energy Plus (to provide energy and alertness), a stress formula (“to help the body resist the stresses of daily living”), and Metabalance 44 (said to include 15 vitamins despite the fact that only 13 exist for humans and the product contained only 12).
According to a notice in the company’s bimonthly magazine, Sunwriter, “The Sunrider philosophy does not focus on disease, treatment, or cure. . . . We are concerned with providing the body with the nutrition it needs to perform its miraculous functions. If the body needs to be healed, it has all the necessary equipment and procedures to accomplish the task, if it is given the essential nutrition. The Sunrider Corporation does not attempt to respond to specific illnesses. . . . Prescribing treatment for disease is contrary to Sunrider philosophy to treat the body as a whole and give it the strength to heal itself. Instead of trying a specific treatment for a specific ailment, Dr. Chen recommends the use of eight products in the Sunpack which address specific nutritional needs of the body.”
Despite this disclaimer, Sunwriter invited distributors to submit letters and articles about how they were helped with health problems and offered a free $145 Sunpack for those that were published. Most issues contained testimonials about weight-loss-including one claiming a loss of 67.5 pounds in 59 daysâand many contain success stories involving serious disease. Readers have reported that arthritis, ulcers, high blood pressure, lupus erythematosis, shingles, emphysema and pancreatitis have been helped, and one article even suggests that the products enabled a man to be removed from a kidney machine!
Although some Sunrider publications stated that “a good nutritional program does not eliminate the need for health professionals,” others implied that Sunergy products are superior to prescribed medications: “When you introduce a chemical substitute for an ailing organ or body system, that organ or system atrophies. The substitute may make a person feel better, but that feeling is nothing more than an ‘illusion of health.’ The organ or body system is still sick.” But Sunrider products can “restore the body’s capacity to regulate itself.” The company claimed that “nearly the entire medical philosophy is based on substitution,” whereas Sunrider worked by “regeneration” According to a Sunrider cassette tape, there are plant combinations that will “support the genetic control of the body in all of the different body areas,” and Sunrider products are “system-specific concentrated regenerative whole foods.
The August 1989 issue of Longevity magazine described how the parents of a 4-year-old girl with an inoperable brain tumor had put her on a $900-a-month Sunrider regimen with the hope of curing the cancer. When the tumor went into remission (following radiation therapy), Sunrider distributors began telling prospective clients that their products had cured it. Although the child died of her disease several months later, the parents continued to receive phone calls from families of cancer patients inquiring about the “cure.”
Government Intervention:
Too Little, Too Late
In 1983, the FDA ordered Sunrider to stop claiming that its Nutrien Concentrate was adequate and effective to “produce energy, long life, and lasting health” and that Calli Tea was “designed for health and beauty” and helps the user to be “slender, energetic, and full of life.” During 1984, the FDA obtained an injunction prohibiting Sunrider from marketing an unapproved sweetener extracted from the herb Stevia rebaudiana and sent the company a regulatory letter telling it to stop making more than 50 explicit claims that four of the products in its Sunpack—Assimilaid, Lifestream, Prime Again, and Concold (later marketed as Conco)âcould benefit specific organs or were adequate and effective against various disease conditions.
Although these claims were stopped, Sunrider continued to make many illegal claims. In 1987, for example, Calli tea was said to enhance the power of the mind, heighten the ability to concentrate, and help body cleansing systems operate efficiently to reduce toxic waste and eliminate cholesterol and dangerous fatty substances. Conco was said to “nourish the body’s ability to avoid and overcome illnesses.” And Lifestream was said to enhance the vital performance of circulatory and cardiovascular systems.
In 1989, the Los Angeles District Attorney obtained a consent agreement forbidding Sunrider from making false claims or representing that its products have any effect on diseases or medical conditions. The company admitted no wrongdoing but agreed to pay a total of $175,000 in penalties. The agreement applied only to claims made within California. A few months later, I obtained another distributor kit directly from company headquarters. It contained an audiotape of testimonials from distributors who described how Sunrider products had cured them of serious diseases. This time the product literature described Calli as “a herb food beverage believed by ancient priests to provide the nourishment needed for proper cleansing of the body and enhancement of mental powers.” Conco was said to contain “herb foods . . . believed to supply nutrition to help the body promote and sustain its natural health state.” And the ingredients in Lifestream were said to “nutritionally support” the circulatory and cardiovascular systems. Despite government pestering, Sunrider grossed about $90 million in 1990.
This type of regulatory history is not unusual. Multilevel companies that market health products typically begin with the most blatant therapeutic claims they think they can get away with. Each time a government enforcement agency protests, the company will withdraw or tone down just enough claims to avoid a courtroom confrontation. However, if the original sales push has been effective, the company will have established a base of distributors who believe in the products and don’t need official company literature to sell them. They use their own testimonials and print their own “unofficial” flyers. The distributor through whom I ordered my Sunrider kit in 1990, for example, telephoned regularly from Texas to tell me how Sunrider products had helped him and members of his family with arthritis and several other health problems.
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This article was originally published in the Fall 1992 issue of Priorities, the magazine of the American Council on Science and Health.
This article was posted on December 18, 2010.
original informations: http://www.mlmwatch.org/04C/Sunrider/law.html