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Advocare Loses Million Dollar Suit in Dallas

Dallas Jury Returns $1.9 Million Verdict Against Nutritional Supplement Provider AdvoCare

A Dallas jury has awarded a $1.9 million verdict against AdvoCare International L.P., a Carrollton, Texas-based multi-level marketer and supplier of nutritional supplements and skincare products. Following a two-week trial in Dallas County’s 191st District Court, jurors found that the company violated the Texas Deceptive Trade Practices Act by engaging in an unconscionable action by canceling agreements with distributors Bruce and Teresa Badgett of Arlington.

Plaintiff Bruce Badgett says he hopes the verdict will prevent others from falling victim to AdvoCare’s business practices.

“I hope this verdict sends a message to AdvoCare to think twice before unilaterally terminating distributors and keeping the benefits of a distributor’s sales network for itself,” says Mr. Badgett. “They destroyed our business, and may destroy their own business if fundamental changes in management practices are not made.”

The Badgetts were active and profitable marketers of AdvoCare products for more than 12 years before their distributorship was suddenly canceled by the company in 2006, according to the lawsuit. Jurors heard how AdvoCare management funneled business relationships to themselves and other distributors “who were unjustly enriched with misappropriated profit streams developed and earned by” the Badgetts.

“The Badgetts perhaps were victims of their success, leading to a vendetta against them by AdvoCare officials,” says attorney Ted Anderson of Kilgore & Kilgore, trial counsel for the Badgett family. “The company refused to make the changes in its marketing and business structures that would meet the accountability demands of my clients and ultimately benefit every AdvoCare distributor and customer.”

AdvoCare, which reported revenues of more than $80 million in 2008, is also under scrutiny following an American Arbitration Association ruling earlier this year, finding that the company provided a contaminated supplement to world-class swimmer Jessica Hardy, costing her a spot on the U.S. Olympic team. AdvoCare and Ms. Hardy have pending lawsuits to decide whether the AAA ruling will be upheld.

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