<p style="text-align: justify;">The matter of <a href="https://www.njcourts.gov/attorneys/assets/opinions/appellate/published/a0379-20.pdf?c=pR0"><em>Yoel Romero v. Gold Star Distribution, LLC</em></a> arose out of the sale of a dietary supplement manufactured and distributed by Gold Star. Romero is an MMA fighter who competed in the UFC, the highest level of competition in the MMA. He is also a former world champion freestyle wrestler who won a silver medal at the 2000 Olympic Games.</p>
<p style="text-align: justify;">Gold Star is a dietary supplement company whose president is Steven Hankin. According to plaintiff, he consumed one of Gold Star’s products called “SHED RX”. He relied on Gold Star’s representation that the product was free of any substances banned by the World Anti-Doping Agency (WADA). Romero made a diligent inquiry with the company to ensure that the supplement did not contain any ibutamoren (a growth hormone) which is banned by WADA.
Nonetheless, Romero tested positive for ibutamoren (which was the first and only time he tested positive for substances banned by WADA) and was suspended from the UFC at a time when he was a prime contender for the UFC middleweight title. In filing suit against Gold Star, Romero claimed he was denied prize money for such a high-profile fight, as well as other promising career opportunities and damage to his reputation.</p>
<p style="text-align: justify;">Gold Star’s president evaded service of process, and, eventually, the court entered default as to liability against Gold Star and Final Judgment by Default against Gold Star. The trial court awarded $3,150,00 for lost wages and income, $3,000,000 for reputational damages, and $3,000,000 for infliction of emotional distress. In addition, the trial court trebled all three categories of damages pursuant to New Jersey’s Consumer Fraud Act, culminating in an award of $27,450,000.</p>
<p style="text-align: justify;">Gold Star’s president thereafter quickly attempted to vacate default judgment. His attempt failed, and the Court upheld most of the trial court’s damages. However, the court refused to treble Romero’s $3,000,000 emotional distress award pursuant to case law holding that non-economic damages are not subject to trebling in consumer fraud actions. The court also remanded to the trial court with regard to the $3,000,000 for reputational damages and left open the question of whether such damages should be trebled under the Consumer Fraud Act.</p>
<p style="text-align: justify;">The lesson to be learned here is that if you are sued, you cannot stick your head in the sand. The New Jersey courts, despite liberal standards governing motions to vacate entries of default and default judgments, will uphold one-sided default judgment awards if the defendant deliberately ignores the lawsuit.</p>
<p style="text-align: justify;">Thanks to Mike Noblett for his contribution to this post. If you have any questions or comments, please contact <a href="mailto:email@example.com">Colleen Hayes</a>.</p>