Professional Documents
Culture Documents
(JURY DEMANDED)
v.
PARTIES
1.
State of Utah.
2.
Nu Lite Sales, LLC, (Nu Lite) is a Utah limited liability company with its
principal place of business in Utah County, State of Utah. Ms. Craig, and Nu Lite Sales, LLC,
are sometimes herein referred to collectively as Plaintiffs.
3.
Provo City, (Provo City) is a city located in Utah County and is a municipality
organized under the statutes of the State of Utah. The Provo Police Department is a subdivision
or department of the government of Provo City and all references to Provo Police Department
include Provo City and vice versa.
4.
Utah and is also a detective police officer, who at all times relevant to the allegations in this
Complaint, acted as a representative of Provo City.
5.
At all times relevant to this matter, Provo City acted through and by its employees
including Officer Gibson. All actions of Provo City as alleged herein were actions performed by
the employees of Provo City and were authorized by Provo City.
6.
business in the State of Utah. Nu Skins principal place of business is in Provo, Utah. Lisa
Killpack (Ms. Killpack) is an individual who is a resident of the State of Utah and who at all
times relevant to the allegations in this Complaint, acted as an employee of and acted as a
representative and on behalf of Nu Skin.
JURISDICTION AND VENUE
7.
This action is authorized and instituted pursuant to 42 U.S.C. 1983, 1985 and
1988 and Utah law. Jurisdiction is invoked pursuant to 28 U.S.C. 1331, 1337 and 1343.
8.
Venue is proper pursuant to 28 U.S.C. 1391(b) with this Court as all acts took
place within the jurisdiction of the United States District Court of Utah.
BACKGROUND
9.
Plaintiff, Elizabeth Craig is a resident of Orem, Utah, a mother and wife, who
before the events described in this Complaint, was actively engaged in establishing a growing
career as a motivational speaker and author. She had been Miss Utah as a young woman and
was establishing a reputation as a credible role model for young women in the Utah LDS
community and in the broader LDS community as well. Craig in the year 2009, began a business
called Nu Lite Sales, LLC, with business partner, Brady Harper (Mr. Harper) and had been
coordinating the sale of donated Nu Skin products and other products from other sources for
profit for her company and for the use of and donation to Scott Lazerson (Mr. Lazerson) and a
non-profit 501(c)(3) foundation known as the Interface Foundation (Interface) run by Mr.
Lazerson.
10.
Nu Lite Sales, LLC was a new business run out of the homes of Ms. Craig and
Mr. Harper using storage units to store donated Nu Skin products before they were sold, donated
or otherwise converted to cash for use in their business and for use by Mr. Lazerson and his
charity.
11.
Nu Skin has its main offices in Provo City and is a powerful corporate citizen
having recently completed a multimillion dollar corporate office building and business center in
downtown Provo.
12.
Nu Skin is engaged in the manufacture, distribution and sales of health and beauty
goes to great effort to reduce and eliminate any sale of Nu Skin product outside of its multi-level
marketing distribution scheme, which sales Nu Skin refers to as Product Diversion.
14.
On information and belief, Nu Skin channels Dump Product through its Employee
In about 2007, Mr. Lazerson organized the non-profit Interface for legitimate
charitable purposes. Beginning in approximately April 2009 and continuing through at least
January 2010, Nu Skin, through its employees donated many truckloads of Dump Product to
Interface. All of the donations made by Nu Skin to Interface were made during regular business
hours from the Nu Skin Employee Store with the knowledge, consent, and assistance of Nu Skin
employees that had or appeared to have the authority to dispose of the Nu Skin product.
17.
In order to help pay the expenses of the Foundation and be able to donate to those
in impoverished conditions a far greater benefit than high-end cosmetic and beauty products
would or could provide, Mr. Lazerson and Interface sought to turn such products into cash,
which Interface would use for charitable purposes, including paying the administrative and
operating expenses of Interface including compensation to Mr. Lazerson.
18.
Because Interface did not have the resources to sell high-end cosmetic and beauty
products, Interface provided such products to Nu Lite so that Nu Lite could then sell such
products through various on-line auction sites. Nu Lite agreed to sell the products, which Nu
Lite and its managers understood had been generously donated to Interface by Nu Skin, and to
return a portion of the proceeds of such sales to Interface.
19.
substantial amount of Dump Product to Nu Lite, together with title to that Dump Product
(collectively, the Nu Lite Property), with the understanding and agreement that Nu Lite would
sell the Nu Lite Property, for instance, on various auction sites.
20.
sales on eBay and other auction sites and began an investigation into so-called Product Diversion
by Nu Lite. Eventually a number of Nu Skin employees were involved in this investigation.
21.
On information and belief, Provo City and Nu Skin had no information or even
an indication, at that time or ever since, that any of the Nu Lite Property that Nu Lite was selling
through on-line auction sites had been stolen. Instead, on information and belief, motivated by a
desire to stop so-called Product Diversion, Ms. Killpack, Mr. Keith Wride (Mr. Wride) another
employee of Nu Skin, contacted the Provo Police Department and accused Ms. Craig and Mr.
Harper, a co-owner with Ms. Craig of Nu Lite, of trafficking in stolen goods the very goods
that Nu Skin had previously donated to Interface and Interface had provided to Nu Lite for sale,
knowing that they were selling those products, knowing that the products were not stolen,
knowing Mr. Lazerson had obtained the product from Nu Skins own distribution center in Provo
having already talked to the employees who had given it to Mr. Lazerson.
22.
Nu Skin, through Ms. Killpack, sent Mr. Wride to locate and set up private
surveillance of storage units she believed Nu Lite was using to store Nu Lite property. Mr.
Wride then engaged in private surveillance of the storage units for several days without the
consent or knowledge of the Plaintiffs.
23.
On information and belief, around this same time, an employee at Nu Skin called
Mr. Lazerson and told him Nu Skin had a lot of additional product to donate to him and asked
him to come and pick it up. Mr. Lazerson contacted Ms. Craig and Ms. Craig arranged to have a
truck go to Nu Skins facility to pick up product.
24.
could track it and find out where it was being sold as a part of their efforts to stop product
diversion.
25.
Before any search warrant was issued, Ms. Killpack told Officer Gibson that two
Nu Skin employees at the distribution center had provided information that the Nu Lite Property
was stolen property and had come from Nu Skins distribution center. In reality, Ms. Killpack
had learned from the two Nu Skin employees that they had freely given the product to Lazerson
and that it was not stolen.
26.
volume of Dump Product to Nu Lite and, knowing that it was donated to Lazerson, informed the
Provo City Police Department that the product was stolen.
27.
Officer Gibson said in a Utah State Court hearing on September 5, 2012, that Nu
Skins lawyers were with Ms. Killpack and Mr. Wride when they gave the information described
in paragraph 26 Officer Gibson which he used to then apply for a search warrant.
28.
On information and belief, despite having no evidence that a theft had occurred
and knowing that a substantial amount of product had just been donated to Lazerson, Ms.
Killpack acting on behalf of and with actual authority of Nu Skin, informed the Provo Police
Department in her initial report and later for the purpose of the search warrant, that the Nu Lite
Property in the storage units had been stolen from Nu Skin even though she knew at the time it
had been given freely by Nu Skin employees to Mr. Lazerson.
29.
On information and believe, at the time they contacted the Provo Police
Department, Ms. Killpack, Mr. Wride, Nu Skins unnamed attorneys, and Nu Skin knew that the
Nu Lite Property had been freely given to Interface by Nu Skin through its employees in the Nu
Skin Employee Store.
30.
Moreover, on information and belief, at the time of the execution of the search
warrant, Ms. Killpack and Mr. Wride were present and recognized that the Nu Lite Property was
in boxes labeled to identify it as Dump Product and that it had been provided through the
Employee Store.
31.
and did not do an independent, thorough investigation if it did any investigation at all.
34.
Based upon Ms. Killpacks, Mr. Wrides, and Nu Skins accusation, the Provo
Police Department obtained the search warrant for the storage units that Nu Lite had rented for
the purpose of storing the Nu Lite Property and preparing it for sale.
35.
The storage units were locked with locks and keys and were exclusively in the
The Plaintiffs had an expectation of privacy in the Storage Units and treated the
37.
A search warrant based on the same information provided by Ms. Killpack, Mr.
Wride and Nu Skin was executed by the Provo City Police Department on the private residence
of Ms. Craig in Orem, Utah where she had an expectation of privacy.
38.
Following execution of the search warrant on the Storage Units and Ms. Craigs
home, the Provo Police Department wrongfully arrested Ms. Craig and Mr. Harper, and based
upon information from Provo Police Department, the Utah County Attorneys Office charged
Ms. Craig and Mr. Harper with a variety of crimes associated with their possession and sale of
the Nu Skin Dump Product.
pattern of unlawful activity, a 1st degree felony; 2) theft by receiving stolen property, a first
degree felony; 3) money laundering, a 1st degree felony; and 4) unlawfully selling or dealing
with articles bearing registered trademarks, a class B misdemeanor. The first three charges were
filed with gang enhancements.
39.
Provo Police Department caused Ms. Craig and Mr. Harper to each spend a night
The local newspaper the Daily Herald published a report on February 20, 2010,
"They observed Nu Skin boxes being removed from a vehicle and being loaded into
one of the storage units," he said.
Siufanua said Nu Skin learned two current employees and one past employee were
involved in the thefts and were selling the products on eBay and Amazon.com. They
brought the case to Provo police, who served a search warrant on the storage units
and found more than 400 boxes of Nu Skin products, totaling more than $500,000.
Additionally, Captain Cliff Argyle of the Provo City Police Department was quoted on the Salt
Lake Tribune on February 25, 2010, making similar false statements about the Plaintiffs.
41.
Because Ms. Craig is a former Miss Utah and enjoyed a career as a motivational
speaker for various programs of Brigham Young University and Deseret Book, Ms. Craigs
arrest generated substantial media interest. Most, if not all, of the local and state-wide media
outlets published reports about her arrest, many of which are still available in on-line editions.
Coverage by the media extended beyond the state of Utah or even the mountain west region of
the United States and reached at least as far away as India.
42.
Ms. Craig was vilified in the media and compared to Bernard Madoff and Enron.
43.
Ms. Craig was told by various church leaders that because of the arrest and the
information in the false press reports that she was no longer welcome to speak to certain youth
groups in her church.
44.
As a result of Ms. Craigs arrest, the negative publicity and her loss of reputation,
Brigham Young University cancelled all of Ms. Craigs pending appearances, and Deseret Book
ceased selling any products associated with Ms. Craig, causing Ms. Craig substantial loss of
income and reputation.
45.
Since the time of the newspaper article and the arrest Ms. Craig has continued to
suffer loss of income, cancelled appearances, embarrassment, harassment, and poor treatment by
members and leaders of her church.
46.
Ms. Craig has suffered severe emotional distress and anguish since the time of
Ms. Craigs reputation was tarnished beyond repair and continues to be tarnished
to this day.
48.
As a result of her arrest and the charges filed against her Ms. Craig was required
to retain attorneys to defend herself against the criminal charges which cost her tens of thousands
of dollars in attorneys fees.
49.
Following a preliminary hearing, the District Court refused to bind the matter
over for trial, finding that the state lacked probable cause to prosecute Ms. Craig, Mr. Harper or
Nu Lite because there was no evidence that the Nu Lite Property had been stolen. In Judge
McDades words, the State of Utah introduced not one bit of evidence that the Nu Lite
Property had been stolen. All four charges were dismissed on December 6, 2010.
50.
That decision was not appealed and has now become final.
51.
Provo City failed to return the Nu Lite Property back to the Plaintiffs. In fact, the
Provo City Police Department did not make any attempt whatsoever to determine any rights that
Plaintiffs may have or may have had in the Nu Lite Property.
52.
Provo Police Department failed to give notice to Nu Lite that it intended to deliver
Officials of the Provo Police Department, including but not necessarily limited to
Officer Gibson, caused the Provo Police Department to deliver the Nu Lite Property to Nu Skin
and did so without any notice whatsoever to Plaintiffs.
54.
Gibson shortly after the seizure of the Nu Lite Property and the arrest of the Plaintiffs, in
February of 2010 and in collusion with Nu Skin employee, Ms. Killpack, gave the Nu Lite
Property valued by Nu Skin at over $1 Million Dollars, to Nu Skin. This was done in spite of the
information given to Officer Gibson by Nu Skin employees in his interviews, that Nu Skin had
donated the property to Lazerson, and prior to any determination, whether judicial or
administrative, civil or criminal, that the Plaintiffs did or did not have had a property interest in
the Nu Lite Property.
55.
Notwithstanding the judges ruling that there was not one bit of evidence the
property was stolen, the Nu Lite Property was never returned to Plaintiffs and Plaintiffs have not
received from Provo City so much as a receipt, or an acknowledgment that they had an interest in
the Nu Lite Property or that they had a right to at least attempt to prove they had an interest in
the Nu Lite Property. Despite the courts finding that there was no probable cause to believe the
Nu Lite Property removed from Nu Lites storage units had been stolen, Provo City has not
attempted to return any of the Nu Lite Property to the Plaintiffs and has failed to take any
reasonable steps to assure that Nu Lites property interests were protected.
56.
Provo Police Department seized Nu Lites records, a computer and some office
equipment and supplies (Nu Lite Office Equipment) while executing the search warrants, none
of which has ever been returned to Plaintiffs even to this day after requests by Plaintiffs and their
counsel to do so.
57.
On information and belief, Office Gibson, the Provo City Police Department and
Provo City did everything Nu Skin employees instructed them to do through this entire sad and
embarrassing affair rather than perform their duties to the public and Plaintiffs as required by
their policy, Utah statutes and the constitution.
58.
Ms. Killpack represented to the court under oath during Craigs and Harpers
preliminary hearing that the Nu Lite Property removed from the storage units had a wholesale
value exceeding $1.1 million and a retail value 30-40% higher than that.
59.
Nu Skin received the Nu Lite Property from Officer Gibson in February of 2010,
did not return it to Nu Lite, and on information and belief, caused it to be destroyed shortly
thereafter, thereby preventing Plaintiffs from ever being able to recover the Nu Lite Property.
60.
No hearing was ever held by Provo City regarding the ownership or disposition of
Provo City has a policy enacted by ordnance that states in pertinent part: The
Police Department by and through its sworn officers, shall be responsible for protecting the
rights of persons and property [and] training sworn personnel. Section 2.10.140(1), Police
Department, Municipal Administrative Code (enacted 1985-12, Am 2010-06).
62.
Provo City has an additional policy enacted by ordinance that states in pertinent
part that the Chief of Police shall be responsible to hold and dispose of all lost or stolen
property that comes into the possession of the Police Department in accordance with the
requirements of Utah Code Title 77 Chapter 24 Section 9.01.040, Provo City Code.
63.
Utah Code Title 77 Chapter 24 sets out legal obligations of the Provo City Police
Utah Code 77-24-1.5 imposes a duty on peace officers to hold all property in safe
custody until it is used as evidence or if not, returned to the owner following state law.
65.
Provo City, Officer Gibson and the other officers involved in this matter failed to
recognize the well established constitutional rights that Plaintiffs had in the Nu Lite property.
66.
Provo City, Officer Gibson and other involved officers failed to keep the Nu Lite
property in safe custody, failed to exercise due diligence in attempting to notify the rightful
owner that the Nu Lite property was to be returned, failed to release the Nu Lite property to its
lawful owner, and generally failed to follow either Provo City Policy or state statutes in their
handling of the Plaintiffs Nu Lite property.
67.
On information and belief, Plaintiffs allege that the total failure of Officer Gibson
and other involved officers to follow Provo City policy, state statutes, the state constitution, and
the United States Constitution in honoring the property rights of the Plaintiffs in the Nu Lite
property was because Provo City had failed to train Officer Gibson and other involved officers
adequately for them to be able to recognize their duty and to perform their duty under law.
68.
On information and belief, Plaintiffs allege that Provo City failed to train any of
its police officers to follow Provo City policy, state statutes and the United States Constitution in
honoring the liberty rights including the right to a constitutionally protected liberty interest to be
free from wrongful arrest, detention, prosecution and other rights. Provo City failed to train
them adequately for them to be able to recognize their duty and to perform their duty under law.
69.
Provo City, by failing to properly train its officers regarding property rights and
liberty rights of citizens or in the alternative, having no policy at all, or by performing inadequate
training, demonstrates a deliberate indifference to the rights of Plaintiffs in the Nu Lite property
and a deliberate indifference to the liberty and other constitutional rights of citizens of the State
of Utah and of the United States.
70.
The loss of Plaintiffs rights in the Nu Lite Property was a direct result of Provo
City not training or teaching its employees what to do with disposition of property seized by the
police. Had Gibson and other officers known how to treat the Nu Lite Property in accordance
with Provos policy, state statute, and constitutional law, the Plaintiffs would not have been
deprived of their property.
71.
As a consequence, the Nu Lite property was destroyed and the Plaintiffs lost the
The loss of Plaintiff, Elizabeth Craigs liberty interest in being free from wrongful
arrest, search and seizure, detention, prosecution and other rights was a direct result of Provo
City not training or teaching its employees how to properly investigate, evaluate citizen claims
and investigate those claims prior to filing criminal charges, and how not succumb to undue
political pressure from influential citizens and businesses which may be using the criminal
system to further their civil purposes, and to distinguish between criminal and civil claims, and
obtain proper advice and counsel regarding filing such charges.
73.
Complaint.
74.
Plaintiffs had a property interest in the Nu Lite Property that was seized by Provo
City and Officer Gibson on or after February 11, 2010. Plaintiffs also have a property interest in
the Nu Lite Office Equipment, the computer and other office equipment, records and supplies
seized by Provo City Police Department.
75.
Plaintiff, Ms. Craig has a constitutionally protected liberty interest in being free
76.
Provo City is liable for the deprivation of Plaintiffs Fourth Amendment Rights in
that it failed to adequately train its officers as to what constitutes probable cause for a search
warrant sufficient to engage in searches and seizures, resulting in a search and seizure even after
Officer Gibson was informed by employees at the Nu Skin Distribution Center that they had
donated the product to Lazerson.
77.
judgment and not to apply for and obtain a warrant and execute the warrant, or search the
Plaintiffs premises and persons and seize their property based solely on the word of so-called
security personnel, Ms. Killpack and Mr. Wride.
78.
Provo City failed to train its police officers to properly investigate criminal
allegations brought by businesses and employees of businesses against other citizens and to
distinguish between civil claims and criminal claims.
79.
protection by delivering to Nu Skin, no questions asked, the Nu Lite Property. Provo Citys
policy regarding returning property alleged to be stolen but later found not to be stolen is
inadequate to protect the property interest of persons similarly situated to the Plaintiffs who do
receive their property or who do have a hearing to determine whether they have a property
interest in property seized under a warrant.
80.
Provo City acted under color of state law depriving Plaintiffs of their property
interest and Elizabeth Craigs liberty interests and is thus liable to Plaintiffs for purposes of 42
U.S.C. 1983.
81.
behalf of other persons similarly situated who do receive back their property seized by a warrant
or who do receive the right to a hearing to determine their right to or the existence of their
property right in property seized from them pursuant to a warrant.
82.
Provo City is liable for the deprivation of the property interest of Plaintiffs in the
Nu Lite Property, in that it failed to properly train Officer Gibson and other police officers
regarding its policy, if it had one, and failed to properly train Officer Gibson and other police
officers regarding citizen rights to receive their property after seizure and/or citizen rights to
have a hearing or some kind of administrative or judicial determination of their property rights
where there is a competing claim to property rights in seized property.
83.
Provo City is further liable for failing to train Officer Gibson and other police
officers to recognize that public officials and police officers should not value the rights and word
of powerful corporate citizens over the rights of less powerful citizens who happen to have been
accused, in this case falsely, of a crime.
84.
Provo City failed to train Officer Gibson and other police officers to follow state
statutes and constitutional requirements or to provide a clear and understandable City ordinance
governing the disposition of property belonging to a person from whom it was seized. Had
Provo City properly trained its police officers, Plaintiffs would not have been deprived of their
property.
85.
Provo City acted under color of law in carrying out its respective official
responsibilities in depriving Plaintiffs of their property interest in the Nu Lite Property and the
Nu Lite Office Equipment.
86.
and Fourteenth Amendment rights, Plaintiffs were deprived of property without due process and
were not given equal protection of the law in protecting their property interest entitling them to
damages in an amount to be proved at trial but at least $1,100,000.00.
87.
and Fourteenth Amendment rights, Plaintiffs suffered financial loss in an amount to be proved at
trial but at least $1,100,000.
88.
B.
Compensatory and consequential damages for the various violations set forth above,
for losses sustained by Plaintiffs in sums to be proven at trial;
C.
D.
E.
Attorneys fees and costs of this action, including expert witness fees as provided in
42 U.S.C Sec. 1988.
JURY DEMAND
Plaintiffs demand a jury trial.
Dated this 20th day of November, 2014.
FILLMORE SPENCER LLC
_s/Mark D. Stubbs_______________
Mark D. Stubbs
Barnard N. Madsen
Matthew R. Howell
FIRST AMENDED COMPLAINT - 17
CERTIFICATE OF SERVICE
I hereby certify that on the 20th day of November, 2014, copies of the FIRST AMENDED
COMPLAINT were served upon the following via the courts electronic filing system or U.S.
mail:
Robert West
Brian Jones
Gary D. Millward
Provo City Attorneys Office
P.O. Box 1849
Provo, Utah 84603
/s/Bonnie E. Williams
Paralegal