Success by Health’s bid to overturn summary judgment via a motion for reconsideration has been denied.

The FTC was
granted liability summary judgment
against Success by Health in September.

In their motion for reconsideration, the SBH defendants focused their attention on VOZ Travel.

The FTC maintains
VOZ Travel was a pyramid scheme
because it had no retail products.

VOZ Travel affiliates paid a fee, which qualified them to earn on recruited affiliates who also paid a fee.

The SBH defendants argue VOZ Travel wasn’t a pyramid scheme because

VOZ Travel packs were a legitimate product line that was about to launch at the time the FTC initiated this action and obtained the temporary restraining order.

It is the FTC itself that caused the VOZ Travel pack not to launch, preventing the product line from reaching consumers.

In support of this the SBH defendants tendered an email sent to their merchant vendor, which they assert proves they had a product contract.

Additionally the SBH defendants took issue with the FTC’s expert, Dr. Bosley, allegedly conducting
‘“no analysis” as to VOZ Travel.’

Submitted declarations from SBH affiliates were also cited, with the defendants claiming the declarations “explicitly list the VOZ Travel product.”

Finally the SBH defendants brought up their desire to relaunch VOZ Travel without MLM, as a demonstration that it wasn’t a pyramid scheme.

The court rejected all of the SBH defendant’s arguments.

As a general matter, the court found the SBH defendant’s motion
‘does not come close to satisfying LRCiv 7.2(g)’s standard for reconsideration.’

The Individual Defendants do not cite any new evidence or new legal authorities.

Instead, they simply attempt to offer new arguments in defense of the VOZ Travel program that they failed to raise in their response to the FTC’s summary judgment motion.

This is impermissible.

With respect to the email communication, the court shut down its submission as per FRCP Rule 56.

In granting liability summary judgment, the court relied on

extensive evidence suggesting that the Individual Defendants’ statements regarding the VOZ Travel program were “a complete fabrication,” that “[t]here was nothing,” that “SBM and Advantage Services both terminated the entities’ contract with each other” before the issuance of the TRO, and that the Individual Defendants “had not retained a new vendor as of the entry of the TRO.”

In their response to the FTC’s motion, the Individual Defendants failed to respond to the FTC’s proffered evidence on these points.

Because SBH failed to address the evidence, the court accepted it as undisputed (Rule 56(e)(2)).

The Court was entitled to rely on this undisputed evidence for purposes of its summary judgment analysis, and the Individual Defendants cannot obtain reconsideration of the summary judgment order by belatedly proffering evidence that was always available to them in an effort to create factual disputes.

In other words, you can challenge

🤖 Quick Answer

What was the outcome of Success by Health's motion for reconsideration?
Success by Health's motion for reconsideration to overturn the FTC's summary judgment was denied. The company had challenged the judgment by arguing that VOZ Travel, a component of their business model, constituted a legitimate product line rather than a pyramid scheme, claiming the FTC's actions prevented its launch.

Why did the FTC consider VOZ Travel a pyramid scheme?
The FTC classified VOZ Travel as a pyramid scheme because it lacked retail products. Affiliates paid fees to participate and earned commissions primarily through recruiting other affiliates who also paid fees, rather than from legitimate retail sales to consumers.

What was Success by Health's defense regarding VOZ Travel?
Success by Health argued VOZ Travel was not a pyramid scheme because the VOZ Travel product packs represented a legitimate product line scheduled for launch. The company contended that the

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