i 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

TIMOTHY KERRIGAN, LORI MIKOVICH 

and RYAN M. VALLI, individually, and on 

behalf of all others similarly situated, 

Plaintiffs, 

v. 

VISALUS, INC., a corporation, et al., 

Defendants. 

Case No. 2:14-cv-12693-MFL-DRG

Hon. Matthew F. Leitman 

DEFENDANTS ROBERT GOERGEN, SR. AND TODD GOERGEN'S 

MOTION TO DISMISS COUNT I OF THIRD AMENDED COMPLAINT 

Defendants Robert Goergen, Sr. and Todd Goergen (the "Goergens") hereby 

move to dismiss Count I of Plaintiffs' Third Amended Complaint ("TAC") 

pursuant to Federal Rule of Civil Procedure 12(b)(6) for the reasons set forth in the 

attached Memorandum of Points and Authorities. 

Pursuant to Local Rule 7.1 and the Court's Order on Status Conference (Doc. 

167), on May 5, 2017, the Goergens provided Plaintiffs with a detailed letter 

identifying all grounds under which they planned to seek dismissal of Count I in 

the TAC. In response, Plaintiffs did not seek the Court's leave to file an amended 

complaint. Plaintiffs did not even respond to the Goergens' letter until June 15, 

2017 at 3:49 p.m. eastern standard time, approximately 24 hours from when the 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7115 Filed 06/16/17 Page 1 of 19
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Goergens' motion to dismiss was due to the Court. In that letter, Plaintiffs offered 

for the first time to amend their complaint to address the issues that the Goergens 

had raised in their meet and confer letter more than 40 days earlier. Plaintiffs' 

dilatory response did not comply with the Court’s requirement for a good faith, 

robust meet and confer process. 

WHEREFORE, the Goergens respectfully move the Court to dismiss Count 

I of the TAC, as against them, with prejudice, pursuant to Federal Rule of Civil 

Procedure 12(b)(6). 

Dated: June 16, 2017 

Respectfully submitted, 

HONIGMAN MILLER SCHWARTZ AND 

COHN LLP 

/s/Nicholas B. Gorga 

Nicholas B. Gorga (P72297) 

Andrew W. Clark (P79165) 

660 Woodward Avenue 

2290 First National Building 

Detroit, MI 48226-3506 

Telephone Number: (313) 465-7640 

Fax Number: (313) 465-7641 

ngorga@honigman.com 

aclark@honigman.com 

and 

QUARLES & BRADY LLP 

Kevin D. Quigley (AZ Bar #015972) 

Edward A. Salanga (AZ Bar #020654) 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7116 Filed 06/16/17 Page 2 of 19
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Brian A. Howie (AZ Bar #026021) 

Michael S. Catlett (AZ Bar #025238) 

All Admitted to Practice in ED MI 

2 North Central Avenue 

Renaissance One 

Phoenix, AZ 85004 

Telephone Number: (602) 229.5200 

kevin.quigley@quarles.com 

edward.salanga@quarles.com 

brian.howie@quarles.com 

michael.catlett@quarles.com 

Attorneys for Defendants ViSalus, Inc., Ryan 

Blair, Blake Mallen, Robert Goergen, Sr., 

and Todd Goergen 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7117 Filed 06/16/17 Page 3 of 19
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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

TIMOTHY KERRIGAN, LORI MIKOVICH 

and RYAN M. VALLI, individually, and on 

behalf of all others similarly situated, 

Plaintiffs, 

v. 

VISALUS, INC., a corporation, et al., 

Defendants. 

Case No. 2:14-cv-12693-MFL-DRG

Hon. Matthew F. Leitman 

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF 

DEFENDANTS ROBERT GOERGEN, SR. AND TODD GOERGEN'S 

MOTION TO DISMISS COUNT I OF THE THIRD AMENDED 

COMPLAINT 

Defendants Robert Goergen, Sr. and Todd Goergen (the "Goergens") submit 

this Memorandum of Points and Authorities in support of their Motion to Dismiss 

Count I of the Third Amended Complaint pursuant to Federal Rule of Civil 

Procedure 12(b)(6).

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7118 Filed 06/16/17 Page 4 of 19
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TABLE OF CONTENTS 

TABLE OF CONTENTS ........................................................................................... v

TABLE OF AUTHORITIES ................................................................................... vi

STATEMENT OF ISSUES PRESENTED............................................................... ii

CONTROLLING OR MOST APPROPRIATE AUTHORITIES ........................... iii

INTRODUCTION ..................................................................................................... 1

PLAINTIFFS FAIL TO PLEAD PREDICATE ACTS IN FURTHERANCE 

OF A SCHEME TO DEFRAUD. .............................................................................. 2

A. Plaintiffs Again Fail To Plead At Least Two Predicate 

 Acts By Robert Goergen, Sr. ........................................................................... 4

B. Plaintiffs Again Fail To Plead At Least Two Predicate 

 Acts by Todd Goergen. ................................................................................... 6

CONCLUSION .......................................................................................................... 9 

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TABLE OF AUTHORITIES 

Cases 

Heinrich v. Waiting Angels Adoption Servs., Inc.,

 668 F.3d 393 (6th Cir. 2012) .................................................................................. 2 

Pereira v. United States, 

 347 U.S. 1 (1954) ................................................................................................... 2 

Tellabs, Inc. v. Makor Issues & Rights, Ltd.,

551 U.S. 308 (2007) ................................................................................................ 3 

United States v. Castile, 

 795 F.2d 1273 (6th Cir. 1986) ................................................................................ 2 

United States v. Kent,

608 F.2d 542 (5th Cir. 1979) .................................................................................. 3 

United States v. Maze, 

 414 U.S. 395 (1974) ............................................................................................... 2 

Rules 

Federal Rule of Civil Procedure 12(b)(6) ................................................................. 3

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STATEMENT OF ISSUES PRESENTED 

1. In Count I, does the Third Amended Complaint state a valid RICO Section 

1962(c) claim against Robert Goergen, Sr. and/or Todd Goergen? 

The Goergens' Answer: No. 

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CONTROLLING OR MOST APPROPRIATE AUTHORITIES 

Regarding "causal requirement" of RICO claim (Count I) 

Heinrich v. Waiting Angels Adoption Servs., Inc., 

 668 F.3d 393 (6th Cir. 2012) 

Pereira v. United States,

 347 U.S. 1 (1954). 

Regarding "furtherance requirement" of RICO claim (Count I)

United States v. Maze, 

 414 U.S. 395, 399 (1974). 

United States v. Castile,

 795 F.2d 1273 (6th Cir. 1986) 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7122 Filed 06/16/17 Page 8 of 19
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INTRODUCTION 

Plaintiffs' Third Amended Complaint (the "TAC") attempts to re-plead a 

Section 1962(c) claim against the Goergens that the Court has previously 

dismissed—twice. Most recently, the Court dismissed the claim because Plaintiffs 

failed to allege that the Goergens personally committed two RICO predicate acts. 

(Doc. 75 at 8.) Plaintiffs take another bite at the apple in the TAC, but still fall 

short of setting forth facts plausibly establishing that each of the Goergens 

committed at least two RICO predicate acts. 

In the TAC, Plaintiffs attempt to cure their deficient predicate acts 

allegations solely by reference to certain documents ViSalus produced in this case. 

There are two reasons why these documents fail to plausibly establish that each of 

the Goergens committed at least two predicate acts. First, the documents do not 

show that the Goergens personally used the mails and/or wires or caused others to 

do so. In fact, none of the documents are emails sent by the Goergens or are 

documents purporting to have been mailed by them or on their behalf. Second, 

even if the Goergens transmitted the documents by mail and/or wire (which they 

did not), the identified documents were not "in furtherance" of the alleged RICO 

scheme. Because Plaintiffs have again failed to properly plead predicate acts, the 

Goergens respectfully request that the Court again dismiss Count I, as against 

them, with prejudice. 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7123 Filed 06/16/17 Page 9 of 19
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PLAINTIFFS FAIL TO PLEAD PREDICATE ACTS IN FURTHERANCE 

OF A SCHEME TO DEFRAUD. 

As the Court has previously held, to assert a Section 1962(c) claim, 

Plaintiffs must allege that each Defendant "actually committed two predicate acts" 

in furtherance of a scheme to defraud. (Doc. 74 at 8 (quoting Doc. 54 at 48)). For 

mail or wire fraud, then, "a defendant must, among other things, actually use the 

mails or wires and/or cause another to use the mails or wires." (Doc. 74 at 9 (citing 

Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 404 (6th Cir. 

2012).) A defendant "causes" the mails to be used where he "does an act with 

knowledge that the use of the mails will follow in the ordinary course of business, 

or where such use can reasonably be foreseen, even though not actually intended" 

(hereinafter, the "causal requirement"). Pereira v. United States, 347 U.S. 1, 8-

9 (1954). 

It is not enough, however, for a defendant to simply use, or cause another to 

use, the mails or wires. To serve as a RICO predicate act, a mailing or wire must 

also be "sufficiently closely related to the scheme." United States v. Maze, 414 

U.S. 395, 399 (1974). Thus, the scheme's completion or the prevention of its 

detection must have depended in some way on the mailing or wire (hereinafter, the 

"furtherance requirement"). United States v. Castile, 795 F.2d 1273, 1278 (6th Cir. 

1986) (dependence test "requires that the thing mailed was an integral part of 

execution of the scheme so that the use of the mails was in this way 'incident to an 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7124 Filed 06/16/17 Page 10 of 19
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essential part of the scheme'" (quoting United States v. Kent, 608 F.2d 542, 546 

(5th Cir. 1979)); see also Doc. 75 at 11 (dismissing RICO claim against Todd 

Goergen for failure to satisfy the causal requirement and the furtherance 

requirement). 

Here, in attempting to allege predicate acts by the Goergens, the TAC 

generally references various documents that ViSalus has produced in discovery. 

(TAC ¶ 201, pp. 123–26.) Even a cursory review of those documents reveals that 

none of them (let alone at least two of them for Todd and at least two of them for 

Robert, Sr.) were sent or transmitted by either of the Goergens.1 Moreover, none 

of them supports that either Todd Goergen or Robert Goergen, Sr. caused the 

document to be sent or transmitted. 

Furthermore, Defendants have not set forth facts plausibly establishing that 

any of the documents were "an integral part of execution of the scheme." Castile, 

608 F.2d at 1278. According to the TAC, the alleged pyramid scheme existed 

before any of the documents were even created. (See, e.g., TAC ¶ 16 ("ViSalus 

originally incorporated in 2005 . . . ."); ¶ 5 ("The ViSalus pyramid scheme operated 

for a number of years. In 2008 the scheme almost collapsed . . . .") And the TAC 

otherwise fails to explain how the alleged scheme's completion or the prevention of 

1

 When ruling on Rule 12(b)(6) motions to dismiss, "courts must consider the 

complaint in its entirety, as well as . . . documents incorporated into the complaint 

by reference." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 

(2007).

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7125 Filed 06/16/17 Page 11 of 19
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its detection depended on any of the purported wires or mailings attributed to the 

Goergens in the TAC. For these reasons, Count I fails as to them yet again. 

A. Plaintiffs Again Fail To Plead At Least Two Predicate Acts By 

Robert Goergen, Sr. 

None of the five documents that Plaintiffs list as supporting mail and/or wire 

fraud by Robert Goergen Sr. constitutes a RICO predicate act. 

VISALUS094794-95 (attached as Exhibit "A") 

This email chain from November 2009 appears to be discussing whether 

ViSalus' parent company, Blyth, would approve some minor changes to ViSalus' 

Compensation Plan. The email chain does not satisfy the causal requirement: 

Robert Goergen Sr. did not send or receive any of the emails in the chain—he is 

merely carbon copied—and the TAC does not include any allegations plausibly 

demonstrating that he caused the emails to be sent. Plaintiffs also do not include 

any allegations explaining how the email chain satisfies the furtherance 

requirement. For example, Plaintiffs do not allege that any of the changes to the 

Compensation Plan discussed in the email chain were actually implemented or 

explain how those changes perpetuated the alleged pyramid scheme, which 

Plaintiffs themselves allege began in 2005, four years prior to the email chain. 

(See, e.g., TAC ¶ 16 ("ViSalus originally incorporated in 2005 . . . ."); ¶ 5 ("The 

ViSalus pyramid scheme operated for a number of years. In 2008 the scheme 

almost collapsed . . . .").) 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7126 Filed 06/16/17 Page 12 of 19
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VISALUS038293-94 (attached as Exhibit "B") 

This email chain from August 2010 appears to be summarizing follow-up 

items from a monthly call between Robert Goergen, Jr. (of Blyth),2 John Purdy (of 

ViSalus), and John Tolmie (of ViSalus) (none of whom are defendants). The TAC 

lacks any allegation that Robert Goergen, Sr. participated in the call referenced in 

the email chain, and it is not apparent that he did so from the email chain itself. 

Critically, Robert Goergen, Sr. did not send or receive any emails in the chain 

(again, he was merely carbon copied) and the TAC does not include any 

allegations plausibly demonstrating that he caused the emails to be 

sent. Moreover, the TAC does not explain how the monthly call or the email chain 

discussing it furthered an essential part of the alleged scheme. 

VISALUS037790-91 (attached as Exhibit "C") 

This email chain from April 2009 appears to relate to the recruitment of 

several IPs from "ytb." Robert Goergen Sr. did not send any emails in this chain 

and the TAC does not include any allegations plausibly demonstrating that he 

caused the emails to be sent. Furthermore, the TAC does not explain how the 

alleged scheme depended in any way upon the information transmitted in this 

specific email chain, including whether the "ex-ytb members" discussed in the 

email chain ever joined as ViSalus promoters. 

2

 Robert Goergen, Jr. is the son of Robert Goergen, Sr. and is not a defendant in 

this case. 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7127 Filed 06/16/17 Page 13 of 19
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JOINDER AGREEMENT

Without referencing any Bates numbers or attaching any documents, the 

TAC suggests that Robert Goergen, Sr. was involved with a "Joinder Agreement." 

Plaintiffs do not allege that the "Joinder Agreement" passed through the mails 

and/or wires, much less demonstrate that Robert Goergen, Sr. caused it to do so. 

The TAC does not explain the purpose of the "Joinder Agreement," nor identify the 

participants thereof, nor explain how the "Joinder Agreement" satisfies the 

furtherance requirement. 

VISALUS009401-97 (attached as Exhibit "D") 

This document is a "Recapitalization Agreement" dated September 2014. 

There is no allegation or indication that the Agreement was sent through the mails 

or wires, or that if it was, that the sending was caused by Robert Goergen Sr. 

Additionally, there is no explanation in the TAC of how the Recapitalization 

Agreement furthered the alleged scheme. 

B. Plaintiffs Again Fail To Plead At Least Two Predicate Acts by 

Todd Goergen. 

The four documents that Plaintiffs claim show mail or wire fraud by Todd 

Goergen are similarly insufficient. 

VISALUS107771 (attached as Exhibit "E") 

This November 2010 email chain consists of a message from Ryan Blair to 

Todd Goergen, forwarding an email from John Purdy to Ryan Blair and John 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7128 Filed 06/16/17 Page 14 of 19
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Tolmie. Mr. Purdy's email appears to summarize potential compensation options 

for Nick Sarnicola. The email chain does not satisfy the causal requirement: Todd 

Goergen did not send any emails in the chain and neither the TAC nor the email 

chain itself support that he caused either email to be sent. Also, the TAC does not 

explain whether the compensation discussed in the email was actually received by 

Mr. Sarnicola or how, if implemented, such compensation perpetuated the alleged 

pyramid scheme. And the TAC does not otherwise explain how the email chain 

regarding ideas for Mr. Sarnicola's compensation was integral to executing the 

scheme or otherwise satisfies the furtherance requirement. 

VISALUS001706-07 (attached as Exhibit "F") 

This document is an email dated September 20, 2011 from Jonathan Shapiro 

to several people, including Todd Goergen. The TAC does not include any 

allegations plausibly demonstrating that Todd Goergen caused the email to be sent. 

In the email, Mr. Shapiro discusses the parameters of a "Founders Fund" that Nick 

Sarnicola, Ryan Blair, Blake Mallen, and Ropart Asset Management would create 

to "invest in companies that create innovation in the direct sales industry" and 

discusses the Founder's Fund's first two investments, in Fragmob, LLC and Award 

Leasing Company, LLC. The email does not mention ViSalus or any plan to use 

the Founder's Fund in conjunction with ViSalus business, and the TAC does not 

otherwise explain how this specific email satisfies the furtherance requirement. 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7129 Filed 06/16/17 Page 15 of 19
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VISALUS002539 (attached as Exhibit "G") 

This document is an email dated January 31, 2011 from Tyler Schuessler (of 

Blyth) to John Purdy, Ryan Blair, John Tolmie, and Blake Mallen. Todd Goergen 

is merely carbon-copied on the email, and the TAC does not include any allegation 

plausibly demonstrating that he caused it to be sent. Moreover, the email attaches 

a draft Form 8K document that Ms. Schuessler explains ViSalus could use to 

publicly disclose the number and rank of ViSalus distributors. Plaintiffs do not set 

forth facts plausibly establishing that the Form 8K was ever actually used. In fact, 

Ms. Schuessler indicates in the email that a Form 8K "could be done monthly, 

quarterly, or not at all" (emphasis added). Plaintiffs do not otherwise include facts 

explaining how the draft 8K or the email attaching it satisfy the furtherance 

requirement. 

VISALUS003348 (attached as Exhibit "H") 

This document appears to be a draft letter from Ryan Blair to Nick Sarnicola 

regarding the awarding of units in Hashtag One, LLC, which became a defendant 

in this case with the filing of the TAC. The draft letter is unsigned and lacks a 

valid mailing address. There is no indication that it was ever sent by anyone—by 

mail or otherwise. And even if it were sent by mail or wire, the TAC does not 

include any allegations plausibly demonstrating that Todd Goergen caused the 

transmission. Additionally, because there is no indication the letter was ever sent 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7130 Filed 06/16/17 Page 16 of 19
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(and the TAC does not contain any allegations to the contrary), it is implausible 

that this communication furthered the scheme or prevented its detection. 

CONCLUSION 

Plaintiffs have now had several opportunities to plead—and re-plead—their 

Section 1962(c) claim against the Goergens. In the TAC, Plaintiffs attempt to 

brand Todd and Robert Goergen, Sr. as federal racketeers without identifying a 

single communication transmitted by the Goergens, let alone any such 

communications that furthered the alleged fraudulent scheme. Plaintiffs have now 

failed three times to correct the deficiencies in their RICO claim against the 

Goergens—and failed to take any action when the Goergens alerted Plaintiffs to 

the deficiencies in the TAC as part of the Court's required conferral process.3

Accordingly, the Court should dismiss with prejudice Count I of the TAC as to 

Defendants Robert Goergen, Sr. and Todd Goergen. 

3

 Instead, Plaintiffs waited until 24 hours before the Goergens' motion to dismiss 

was due, on June 15, 2017 at 3:49 p.m., to write to the Goergens, not to defend the 

alleged predicate acts listed in the TAC, but to offer to amend the TAC to include 

additional predicate acts (thereby implicitly admitting that the current acts are 

insufficient). Plaintiffs, having ignored the Court's clear admonition that they were 

proceeding at their own risk if they did not meaningfully participate in the meet 

and confer process or otherwise seek leave to amend, should not be permitted to 

rely on materials outside the pleadings in responding to the Goergens' motion to 

dismiss and should not be granted leave to amend to add additional materials. 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7131 Filed 06/16/17 Page 17 of 19
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Dated: June 16, 2017 Respectfully submitted, 

By: /s/Nicholas B. Gorga 

Attorney for the ViSalus Defendant8s 

QUARLES & BRADY LLP 

Kevin D. Quigley (AZ Bar #015972) 

Edward A. Salanga (AZ Bar #020654) 

Brian A. Howie (AZ Bar #026021) 

Michael S. Catlett (AZ Bar #025238) 

All Admitted to Practice in ED MI 

2 North Central Avenue 

Renaissance One 

Phoenix, AZ 85004 

Telephone Number: (602) 229.5200 

kevin.quigley@quarles.com 

edward.salanga@quarles.com 

brian.howie@quarles.com

michael.catlett@quarles.com 

HONIGMAN MILLER SCHWARTZ 

AND COHN LLP 

Nicholas B. Gorga (P72297) 

Andrew W. Clark (P79165) 

660 Woodward Avenue 

2290 First National Building 

Detroit, MI 48226-3506 

Telephone Number: (313) 465-7640 

Fax Number: (313) 465-7641 

ngorga@honigman.com 

aclark@honigman.com 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7132 Filed 06/16/17 Page 18 of 19
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CERTIFICATE OF SERVICE 

I hereby certify that on June 16, 2017, I electronically filed the foregoing 

document with the Clerk of the Court using the ECF system which will send 

notification of such filing to all counsel of record. 

By: /s/Andrew W. Clark 

Attorney for the ViSalus Defendants 

24902982.1 

Case 2:14-cv-12693-MFL-DRG ECF No. 169, PageID.7133 Filed 06/16/17 Page 19 of 19