The proposed class action detailed on this page was ordered to be handled through binding arbitration by U.S. District Judge Marilyn L. Huff on September 22, 2020. The 10-page order granting the motion to compel arbitration and denying the defendants’ motion to dismiss as moot can be found here.
A proposed class action alleges that although the parties behind Cel MD claim the products can cure hair loss and skin problems, the products are in truth “nothing more than modern snake oil.” The 146-page lawsuit says that while consumers are told the products’ “plant stem cells” can work wonders, those same plant stem cells are “dead or have been destroyed” as a result of their processing and cannot benefit hair or skin.
“Much of the marketing of these products amounts to science fiction,” the case out of California district court alleges.
According to the suit, the defendants—Altitude Ads Limited, Blooming Investments Limited, Amplify Limited and two individuals—purport that Cel MD’s “plant stem cells” can work wonders for hair loss and skin issues, touting the skin cream and shampoo and conditioner’s “scientifically proven” and “patented and expertly refined” formulas. The reality, the lawsuit claims, is that the plant stem cells in Cel MD products have been turned to extract, meaning they are not living after being processed in a manner that kills off the cells. Despite the futuristic method with which the defendants claim Cel MD can cure hair loss and skin woes, the parties are “at best growing plant biomass as part of a common manufacturing technique,” the case says.
Alleging violations of the Racketeer Influenced and Corrupt Organizations Act, the lawsuit claims the defendants have knowingly engaged in “pervasive dishonesty” with regard to how they’ve advertised Cel MD. Per the case, the defendants have used the “MD” in the products’ names to their advantage, as ordinary consumers are more likely to believe the companies that make such are doctors or a medical practice. In California, the case says, it is unlawful to use the initials “MD” without being a licensed medical doctor.
As the case tells it, the defendants are as far from being doctors as it gets. The “MD” in the products' name, the suit says, stands for Moldova, the country from which the defendants purchased their website’s domain name. From the complaint:
“The Cel MD Defendants are not a medical practice. They are an advertising agency that launched its own proprietary products. Yet online, they pose as doctors, frequently giving medical advice to cancer patients and individuals who have suffered hair loss from serious medical procedures such as chemotherapy or brain surgery. And that medical advice is invariably to try Cel MD’s products."
Further, the case says the defendants have photoshopped their products onto pictures of beauty bloggers and models while falsely claiming that those individuals have endorsed Cel MD. Additionally, the defendants have gone so far as to pass off photos of their own employees, including one of the defendants, or from the internet as “customer photos,” while falsely claiming Cel MD has FDA approval, among other stories. On social media, the case goes on, the defendants have hidden or deleted negative comments on their Facebook ads.
“They have told science fiction tales of operating a human stem cell cloning facility, or having developed ‘super skin,’ ‘super bacteria,’ and ‘super biotin,” the case says. “They claimed their products have FDA approvals, when in fact they do not. They utilize fake timers on their website which purport to limit the availability of discounts, when in fact those timers do nothing whatsoever.”
Perhaps the most galling, the lawsuit says, is that the defendants “have long been aware” certain ingredients in Cel MD products can cause some to experience allergic reactions. Citing reports of scalp burns, rashes, hair loss and other side effects, the suit charges that rather than issue warnings to customers, the defendants instead actively targeted those with hair loss from serious medical issues, including brain surgery or cancer.
“With no medical expertise, no knowledge of how their products could cause severe allergic reactions, the Cel MD Defendants went ahead and recommended them anyway,” according to the suit.
The lawsuit looks to cover both a nationwide and California-only class of consumers who, within the applicable statute of limitations period until the date notice of the case is sent out, bought a Cel MD product.