Threats of lawsuit target SF liquor stores for selling Viagra copycat

Liquor stores and other small mom-and-pop shops citywide are receiving letters threatening lawsuits for selling Rhino 7 Platinum 5000, a male sexual-enhancement supplement similar to Viagra.

Rhino 7, which features an explosion behind a photo of a charging Rhinoceros on its packaging and promises “TIME, SIZE, STAMINA” in bold letters, was the subject of a U.S. Food and Drug Administration warning in September.

In a laboratory analysis of the supplement, the FDA found it contained a “hidden” ingredient: sildenafil, the active ingredient in Viagra.

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Following the FDA announcement, Rhino 7 was recalled by its manufacturer, Gadget Island Inc., in October 2017 because the undisclosed active ingredients “may cause a significant drop in blood pressure that may be life-threatening” to people with cardiac problems.

Capitalizing on the recall, a rival male-enhancement company, Outlaw Laboratory, began sending letters in February to small markets in San Francisco threatening to sue if they did not settle for $9,765 and pull the male-enhancement drug from store shelves, the San Francisco Examiner has learned.

“The Illicit Products are illegal to sell and subject your company to legal action for racketeering and unfair business practices,” the letter reads. “We estimate that you are liable for over $100,000 if we prosecute this matter to a jury trial.”

San Francisco shops like Fred’s Liquor on Valencia Street and Fida Market on Mission Street received the letters. Attorneys told the Examiner more than two dozen shops around The City received the ultimatum.

Fearing the threatened liability, many store owners have already settled for undisclosed amounts, according to attorneys representing the shops.

Others are critical of Outlaw Laboratory and accuse them of “picking on” the weakest member of the supply chain: small business-owners.

“They say the item is illegal. To me, this is a new modern way of hold up, without a gun,” said Fuad Ateyeh, the 44-year proprietor of Fred’s Liquor in the Mission District.
“Some stores cannot afford the $10,000,” he said, saying he fears for his fellow shop owners. “If it was illegal, the wholesalers wouldn’t sell them.”

Miriam Zouzounis, a member of the San Francisco Small Businesses Commission and board member of the Arab American Grocers Association, said The City needs to come to the aid of small businesses.

“There are resources that are supposed to be going to immigrant businesses,” she said, but so far city officials haven’t lent a helping hand. “Statements showing solidarity only go so far. We asked for something to be done.”

Rhino 7 was the subject of a U.S. Food and Drug Administration warning in September. (Courtesy photo)

Zouzounis said stores in Oakland were threatened with lawsuits from the same company.
Indeed, Beilal Chatila, an Oakland-based attorney, said more than 100 stores across Northern California received those settlement notices.

The Examiner was unable to independently verify that claim, and Outlaw Laboratory’s attorneys did not respond to press inquiries.

Chatila represents 18 shops threatened with lawsuits by Outlaw Laboratory, most of which are in San Francisco.

“They’re pretty much going across the country and suing anyone in the stream of commerce selling these counterfeit male enhancement pills,” Chatila said. “Relying on a statute that doesn’t require the merchant to know the product was counterfeit.”

Some stores have said they will not settle, and some who believe the lawsuit threats are “scams” are choosing not to respond — potentially leaving them in default with courts, Chatila said.

But store owners who opt not to settle may owe far more money in the long run.
“The statute itself allows up to $100,000 in damages,” he said. “That would devastate a small business for sure.”

Outlaw Laboratory is also suing wholesalers who distribute Rhino 7, including Al-Eryani Wholesale Inc., Sam’s Universal Wholesale Inc., D/B/A Samco Wholesale Inc. in Northern District Court.

“Defendants are engaged in a massive covert scheme to distribute and sell illegal ‘male enhancement’ pills containing undisclosed pharmaceuticals to the general public,” Outlaw Laboratory alleges in its complaint filed in late February.

The supplement company alleged Rhino 7 and other similar products prevented consumers from purchasing their own male enhancement product, TriSteel, which Outlaw Laboratory said is “all natural.”

Joe Fitzgerald Rodriguez
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